Evolving board dynamics: Tan Sri Jamaludin Ibrahim and Ahila Ganesan discuss boardroom leadership

Ahila emphasises how the business environment is constantly changing, likening it to the weather, and suggests it may even be moving faster as the world shifts from a shareholder economy to a stakeholder economy.

She highlights the integral role of ESG in modern board responsibilities: “ESG encompasses risk management and business viability. It’s not just about compliance; it’s about creating enterprise value. The social aspect, especially talent retention, is often overlooked but crucial.”

Jamaludin also reaffirms the social aspect, saying that many people tend to get ESG wrong when talking about it.

“In fact, if you look at 90 per cent of the discussions surrounding ESG, they focus solely on the ‘E’ part. I can understand the focus and reason behind it; people have been neglecting the environment, and there are implications to that. But then again, equating business sustainability with only ESG and equating ESG solely with the environment, is not right,” Jamaludin says, adding that we must also consider talent and business sustainability when discussing how corporations should operate. 

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However, this evolution comes with its own set of challenges and Ahila shares some of her experiences as a younger leader. “The biggest challenge is changing mindsets. Convincing people that business sustainability is beneficial for long-term returns is a slow process.”

She adds that regulatory support helps, but it’s a gradual change. “It always starts with people trying to comply. A business doesn’t go from zero to a hundred overnight. So you need the building blocks, and then you go to the next level. ‘Okay, now that I’ve complied and see the benefits, let’s try looking at it from the perspective of trying to embed it into our organisation.’ Ultimately, you want it to come to a point where it is business as usual—it is not something that you think about; it is something your organisation naturally does,” she says.

The integration of younger members into boards is still a work in progress. Ahila pointed out the prevalent perception that board members should be older. “Assuming they have the skill sets and prerequisites to be part of the board, generally, I do find that the perception still exists that people need to be older to be part of the board—much older, in fact. And if you look at the state of things, on average, board members are 50 to 60 years old,” she says.

But is that trend changing?

“I think there’s a big push to try to make that transition, but it’s not happening yet. It’s still quite slow. The big challenge is perception. Does that person in their 30s or 40s have the skill sets to do it? Do they have the time to commit to being on a board? Especially if you’re an executive, do you have the time to do it? And if you are a non-executive board member, would there be a conflict of interest?” Ahila says

On that regard, Jamaludin stressed the importance of diversity in boardrooms.

“Diversity in age, gender, skills, and backgrounds is crucial. It brings different perspectives and helps in finding the best solutions. There is no right or wrong to this, but there is also resistance to [the idea of a] a 50 to 60-year-old [executive], with decades of experience, [being advised] by someone younger than him on how to run a business. It’s pretty tough. [While there is no definitive answer,] there is a thing called reverse mentoring, and sometimes it works. But most executives still find it [challenging], especially here in Asia,” he surmises. 

Considering the rapid growth and transformation in the modern corporate world, apart from an emphasis on diversity in boardrooms, Jamaludin adds that board members themselves also need to stay ahead by building agility and improving themselves.

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“That’s critical, and it’s tough. We’re in a highly competitive environment, and sometimes decisions have to be made the very next day. We have to regroup very fast and make decisions now. Another aspect is being digitally aware and savvy. Everything now incorporates technology and digital elements. You don’t have to be an expert, but you need to recognise [its importance]. With the vast amount of data available, we must utilise the tools we have to analyse it and help organisations operate effectively,” he adds.

As a younger leader, Ahila agrees and emphasises that this approach has been around for decades.

“If you look at any business case of companies that have gone bust, it’s because they were not agile and risk takers. This is something that keeps happening; that’s the nature of business. I think agility is something that is very difficult to achieve because the minute you form a board, you start looking at governance. You start putting in guardrails and become risk averse. The bigger the company, the harder you can fall, and so you become more cautious. So it’s always important that board members realise that. Again, the board provides oversight and strategy—the big picture, if you will.”

She adds, “I also think the most critical thing for board members to realise is that they don’t know everything. Nobody knows everything! You can only make decisions based on the information that you have, but make sure the information that you have is correct. You’ve asked the right questions and dug in enough before you make those decisions.”

Despite the challenges, Jamaludin advises business leaders to rely on prioritisation, understanding that they cannot do everything. “You prioritise knowing fully well that you cannot do everything,” he concludes.

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