UK: Beam yourself up to the boardroom.

UK: Beam yourself up to the boardroom. - Beam yourself up to the boardroom - How will company decisions be taken in 2020 if technology and globalisation keep racing ahead? Matthew Lynn looks in on a directors' meeting.

by MATTHEW LYNN.
Last Updated: 31 Aug 2010

Beam yourself up to the boardroom - How will company decisions be taken in 2020 if technology and globalisation keep racing ahead? Matthew Lynn looks in on a directors' meeting.

The date: 9 January 2020, and the chairman is preparing himself for the general board meeting with some sense of trepidation. The site chosen for the gathering is board.com, a virtual meeting house, where electronic images of his colleagues will be transmitted from the various parts of the world where they are based.

Once a year, however, the chairman has tried to have what his younger staffers refer to dismissively as 'flesh time' - a meeting where the board gathers physically in the same room - but increasingly this is regarded as an eccentricity within the organisation; he isn't sure this tradition will survive much longer. Many of his colleagues now refuse to fly anywhere, given the number of accidents caused by congested skies.

Another factor that makes the very notion of a 'flesh' meeting even more anachronistic is that one of the current non-executive directors is technically dead - his contributions to the board's discussions being made by way of a computer programme which simulates his thought processes.

One by one, the directors take their places at the electronic boardroom unit. The finance director, as usual, is punctual. From the moment the entire finance department was contracted out to Andersen-Coopers, that side of the organisation has been extremely diligent. And, of course, since the company moved its official domicile to the Granada Sun Valley orbiting space station, it no longer pays earth taxes, nor has to follow tedious earth-based accounting standards - enabling the group to slim down the size of the finance department considerably.

The corporate therapist is the next to log in. The chairman tries to recall when it was that the company's human resources manager actually became corporate therapist, but it escapes him. In any event, her appearance is followed by that of the marketing director, who seems to have escaped the trend for renamed executive positions. Next to log in is the company philosopher, who, as far as the chairman could tell, had never made a meeting on time in the three years he had been on the board. Then came the chief executive and the chief information officer.

Luke Johnson, chairman of PizzaExpress-Coca-Cola Corp, is the first of the non-executives to appear, then Peter Mandelson, the distinguished former chancellor. Debra Packer, chairperson of News Corp, beams apologies from Australia. The chief executive opens discussions with a quick update of the company's progress in the main markets of the world. Business in Russia, as usual, is booming; for nearly 10 years this subsidiary has seemed to pile on sales and profits effortlessly within an economy growing at almost 10% a year. The Far East, too, seems to have recovered quicker than anyone expected from the crash of 2017, and is now growing strongly again. Europe, however, is still feeling the effects of France's sudden decision to pull out of the euro and reintroduce the franc. The United States remains stuck in depression, with the cost of converting the official language to Spanish running so high it has drained life from the economy.

Two main items are on the agenda this morning. One is the proposal to clone the group's star salesman, since it is now acceptable, under the new rules of the UN Charter on Cloning, for corporations to clone key staff - providing it can be shown that it is impossible to find an original person who is equally capable. The second big issue is a proposal to ban the serving of meat in the company canteens. Both, it seems to the chairman, are likely to involve long and probably boring contributions from the company philosopher. Still, for the sake of another couple of billion euros, he can make it through the next few hours.

Fantasy? Yes and no. The only thing that can be said with any certainty about the future is that it probably won't turn out to be anything like we expect. It is also the case that any attempt at looking ahead will tell us more about our current concerns than it will about the next 20 years. Do you remember those 1950s sci-fi films with Russians thinly disguised a bug-eyed monsters? Even so, it is sometimes worth raising our sights from the day-to-day whirl of events, and pausing long enough to wonder where we are going. There are some long-term trends at work that are going to radically alter the company and the board of 20 years from now. One obvious trend is technology. Twenty years ago you would probably have guessed the personal computer would be big in business, and you would have been right. Now we can guess that genetic engineering and the internet are going to be pretty big as well. What is difficult is guessing their precise impact.

We may never get to the stage of cloning key staff. Then again, why not? Some countries, perhaps even most, will ban human cloning, but what will there be to prevent companies using offshore centres to duplicate key staff? Banks will be tempted to clone their star traders, advertising agencies their best creative people, and drugs companies their best scientists. Those kind of skills are hard to find, and companies are already going to a lot of trouble to nurture them. There is no reason to think cloning won't be one option companies will consider.

Another important technology will be the internet. We are already starting to see its impact on retailing and the media, but in time it is likely to usher in a revolution in the way organisations are structured. Companies inevitably will be more global and will draw board members from around the world. If the technology exists to hold virtual meetings in cyberspace, it is more likely to be used when board members are scattered round the globe than when they are all based within a couple of miles of the City of London. A lot more of the company's activities will take place in the nebulous realms of virtual meeting rooms, and activities such as sales, marketing and human resources will be changed completely once we are all online.

Basing a company off-planet may sound far-fetched, but again, why not? About 60% of the world's money is now held offshore, so moving the legal domicile to a microchip on a space station need not be too big a move. There would be no more taxes to pay. No more complying with codes of governance. No more worrying about EU regulations. If it seems unlikely, you have to remember that the dynamic of capitalism is restless competition. Once one company moves off-planet and stops paying taxes, it will have a big competitive advantage over its rivals - lower costs will mean it is able to charge much lower prices for better-quality products. That will prove a strong incentive for the rest to follow suit.

The point is not that any of these particular predictions may come true, but to accept that the future may be radically different from anything we can foresee right now. The 20th century witnessed rapid and accelerating change. The 21st century will surely be no different. And technology is not the only area where we will see radical change. Society as well as science moves on. Twenty years ago we might not have thought it normal to find women or black people in senior positions within companies. It still isn't, in truth, but in 20 years' time it may well be. We should expect the board of the future to represent a much wider cross section of the community than it does today.

That is not just because our own society will be even more multicultural - although that is part of the story - but it is also because the company will be more global. Just as in 20 years the notion of a British currency may seem quaint and old-fashioned, so too might the notion of a British company. The companies of 2020 may well be incorporated under European law and operate worldwide, while being quoted on several stock exchanges. That will involve creating a board that represents a far greater range of interests than is normal on the standard company board of today.

The demands that will be placed on the company will change as well. In 1980, we probably would not have predicted that shareholder value would have been the phrase repeated most tediously by company chairmen. That will probably not be the case in 2020. The fad for downsizing, cost-cutting and relentlessly focusing on what the share price does in the next three weeks will have burnt itself out by then. What will replace it? Peering that far into the future is probably just guesswork, but chances are companies will focus much more on human capital and technology. Those are going to be the scarce resources of the next century. Capital, by contrast, will probably be plentiful - and that will reduce the power that capital markets have over companies. Forget studying shareholder-value strategies. To get ahead in the next decade it will probably be more important to know about genetics. One thing we can be sure of is that we will have a new bunch of management fads to think about - as in the pop business, it is in the nature of the fad industry to keep coming up with something new. We might well see a reaction against the obsession we have today with openness and transparency, for example. The board of 2020 might well think they have a right to keep their salaries and share options private, and the rest of the world can mind its own business. Just as plausibly, the board might well not exist in the form we think of it today. Companies are already starting to work in looser associations and networks, bringing together groups of people and resources for different tasks and projects. The board may well become more of a fluid network, managing a particular project. It may not have a set membership, but the members may change according to the subject being discussed. And it might even be the case that the management pyramid becomes so flat the board won't be at the summit of the company any longer. Perhaps by 2020, only the trainees will be on the board. Everyone else will be busy getting on with their work.

It is probably just a legacy of our tradition of Western rationalism, but our tendency is to think the future will inevitably be better than the past. Thus we like to think the board of the future will be a wiser, more diverse, more sensitive organisation than the typical board of today. That might not be so, of course. It could be that the typical board of 2020 will be run by a bunch of foul-mouthed, bad-tempered, old, white guys, dressed in cheap brown suits, who will spend their entire time discussing how to buy factories, asset-strip them and shut them down - trading under the name GreedySwine.com. It may not be much too look forward to, but is perhaps just as plausible as any of the other scenarios.

RICHARD O'BRIEN, Global Business Network

The people on the board of the future could be much more varied. We might even see much more varied structures, and a much wider set of relationships. We could have global standards of corporate governance, and global boards with a much broader set of interests.

There will be new types of issues to examine. For example, companies may have to look at climatic change, or new technology. We may well have younger, more active boards. You also have to ask whether people will still want to be on the board in the future. Hierarchies are already getting much flatter. You will still need something to give direction to an organisation, and places where people can discuss things and think. But we might not call it a board.

IAN LAWSON, director of leadership, The Industrial Society

There is a shift from business being just about achieving certain results. In future it will be much more value-centred. It will be about leaders who are good at developing people. Our role models all tend to be heroic, very much centred around individuals. The business leaders of 2020 will need to inspire people much more - not just give orders. Boards will need to pay a lot more attention to values and ethics than they do today. There will need to be more channels of communication, and more emphasis on bringing people together. There will be different skills, and a more flexible approach to working. Command and control works when things are not changing much, but in the future the pace of change will be rapid.

JOHN ELKINGTON, chairman, SustainAbility

By 2020, I would expect the virtuality trend to have had a profound impact on where - and how - strategic decisions are made by and in companies. Some issues which would once have been reserved for board-level discussion will cascade through companies and business organisations, with online feedback from internal (and often also external) stakeholders. We believe that boards will have to address what we call the triple bottom line (TBL) of sustainable development. This focuses not simply on financial performance and targets, but on the broader economic, social and environmental impacts caused - and value added - by companies. One potential result of this trend will be that there will be striking reconfigurations of corporate departments to help companies deal with the emerging agenda. Companies such as Nike, where the chief executive has publicly embraced the triple bottom line, may well find that addressing the TBL agenda through traditional structures of community relations, public affairs, environmental policy, or investor relations doesn't work well. We should expect new forms of integration - and new departmental and accountability configurations.

Some people might expect more Gen-X, Gen-Y and N-Gen (Net Generation) folk to be shooting up onto boards, as they have a better feel for where markets and the general business environment might be headed. I think this will happen, but I also think that the greying trend will ensure that the grey-hairs will also continue to be strongly represented. Given the way that softer, values-driven issues are becoming more important, it seems likely that more executives will make it to boards via non-traditional routes. And the range of external stakeholder interests represented among non-execs will very likely widen among major multinationals.

GILL RINGLAND, author of 'Scenario Planning - Managing for the Future', and senior strategist at ICL

By 2020 the professional-services firms will be taking the lead over many of the sectors we see today, so let us take this as a model. A board will need to reflect the networking nature of the business world - it will need to be truly international, with many contacts, to reflect the global nature of both large and small companies. The board will also need to understand valuations and sources of value - to be at ease with the distinctions between brand, relationships, processes and infrastructure, and individual capability levels. Third, by 2020 we will see a very different age distribution in Europe. In much of continental Europe the working population will be historically small compared with those in retirement. Retirement ages may be lifted, and this would clearly affect the composition of boards.

HOW TO GET ON THE BOARD OF 2020

1. Develop new skills, such as genetic engineering, internet marketing, or corporate ethics

2. Learn how to communicate effectively to new audiences and through new media - if you don't know how to process 300 e-mails a day, learn now

3. Network effectively - get involved with human and environmental rights groups. Companies will need links with those kinds of organisations

4. Learn an extra five languages - the board of the future will be global, and it will need people who can think and act across different cultures

5. Buy a smart suit and get a decent haircut - companies will change a lot, but the board will still be a conservative place.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today