TRANSFORMATIONAL DIRECTORSHIP: FOUR PILLARS, TEN PRACTICES

By: Dr. Ramon Segismundo, FICD

Fellow

Institute of Corporate Directors

This is the second of a series of 3 articles for the Institute of Corporate Directors (ICD) on advancing Governance Excellence across the private, public, and nonprofits sectors in the Philippines.  

This article is anchored on the Singapore Institute of Directors (SID) Transformational Directorship Conference 2025 last September 11 and the additional insights of this writer. With the SID event coinciding with the Global Network of Directors Inc. meetings, the conference was attended by Chair Dick Du-Baladad, Vice Chair Ida Tiongson, President Bing Matoto, Treasurer Catherine Hufana-Ang and yours truly.

Riding on the theme “Transformational Directorship: Purpose, Practice, Performance, Progress,” the event tackled a host of overarching business challenges such as climate change, geopolitics, trade, and demographic shifts as it aims to empower boards to transform, adapt, and create lasting stakeholder value.  In today's evolving nature of directorship, leadership is not only just about oversight, but by insight, influence, and impact. 

The pursuit of governance excellence at the board level is critical more than ever with the Philippines at a major cross roads as the scandals on diverted flood funds (governance), the perennial floods and rains (environment), and the social injustices and inequalities (social) continue to threaten to drag overall economic growth and distract national development. The world has also become a more dangerous place with the shifting geopolitics as evidenced by the US-China rivalry right in our doorsteps called the West Philippine Sea, the volatile trade dynamics as the US policies gyrates with its President, the changing demographics with the growing numbers of GenZ in emerging markets, and the evolving opportunities and threats of Artificial Intelligence.(AI). The role of a director has never been this complex- today, the time has come to unite value creation with values based leadership. This convergence calls for transformational directorship.

FOUR PILLARS

As inspired by the SID articulated framework of the event, transformational directorship could be expressed from the standpoint of four pillars (4Ps):

1.  Purpose: Aligning governance with values and the long term stakeholder impact and not only shareholder value and short term results.  Please note the distinction between “Values”, the basic beliefs and principles that are held dear, and “Value”, the wealth and gain of stakeholders.

2.  Practice: Defining the competencies of transformational directors and building and developing these competencies, with the latter defined as the required knowledge, skills, abilities, mindsets, styles, and habits for success on the role.

3.  Performance: Driving sustainable performance with foresight, innovation, and resilience towards the organization's mission and vision.

4.  Progress: Advancing board and director effectiveness with the strategic clarity, adaptive leadership, focused policy guidance, world class wisdom, and targeted interventions if required.

Building on board directorship practices that are already taught in ICD’s Professional Director Program and the Corporate Governance Orientation Program (CGOP), there are practices in support of these 4Ps that Philippine boards may consider implementing, if they have not already done so, as part of their “Value” and “Values” agenda.  The list below may well serve as a preliminary checklist as to whether the directorship journeys of a particular board have embarked on a transformational roadmap. It is not intended to be an exhaustive list and is only meant to ignite and catalyse discussions among the ICD communities, in your own boards and in the wider business community.

TEN PRACTICES

Purpose

1. Over the long term, Board directors have to advocate a deeper and broader Philippine Stock Exchange. Late entrant Vietnam is now larger in number of listings and market capitalization ! Despite continuing challenges, it is noteworthy to mention that the Securities and Exchange Commission has already started to move on a few fronts. But much more have to be done.

2. Board directors need to guide operating management in driving a broader sustainability agenda focused on planetary, social, and personal dimensions and see sustainability as core to business strategy.  For example, on the planetary front, boards who sideline climate issues risk the competitiveness of their organizations in the future. Therefore, board directors have to embed transition planning, sustainability reporting, and organizational resilience into strategy and policy conversations.

3. Board directors have to drive the integration of their corporate social responsibility (CSR) into the core of the business. Not housing it in a separate standalone foundation or having CSR activities that are not linked to the overall strategy reinforces the notion that achieving social objectives are mainstream to the business.

Practice

4. Ensure inter-disciplinary diversity.  This is where the concept of “the multidisciplinary director” comes in.  To quote one of the articles by professional services firm RSM Singapore partners in the SID conference e-book:

      “Today’s director is no longer simply a steward of financial reporting. They must be  

      financially literate,  technologically aware, ESG-savvy, globally minded and resilient 

      under regulatory and stakeholder pressure.  By investing in continuous professional  

      development and adopting a multidisciplinary approach, directors will be better 

      equipped to protect stakeholders and steer their organisations through the challenges 

      of the coming decade.”

5. Digital Intelligence is key to board success and board directors need to acquire key skills such as digital literacy, data driven decision making, cybersecurity awareness, and digital transformation.  It is expected that leveraging AI and analytics will reshape board responsibilities to boost a stronger level of governance.

Performance

6. Have performance goals and metrics for board effectiveness for each operating year and implement a process for monitoring, evaluating, and learning at the end of the year. 

7. As Peter Drucker said, “Culture eats Strategy for Breakfast.”  Board Directors need to influence operating management to design the required organizational culture for the company to execute on the strategy.  Failing to do so will result in a lived culture that is different from what the company espouses and, consequently, possibly bringing about a failed strategy.     

8. In partnership and collaboration with operating management, board directors plan, measure, and evaluate organizational performance.  Going a step further, the board has to ensure that organizational members are rewarded and recognized to sustain maximum performance.  This involves providing direction and guidance for management to develop performance based rewards systems (either short term or long term).

Progress

9. As board directors have a responsibility to ensure that the organization continues to grow and expand and to be built to last for the next and future generations, succession planning has to be in the value agenda of the board and of every director.

10. As key to succession planning is the development of a pipeline of current and future leaders, board directors will have to guide operating management to identify and develop current and future leaders.  Development of these leaders entail providing this cadre with experiences that will equip them with the capabilities and skills necessary to contribute to the organization’s success.

What other practices can you think of that will truly make board directors transformational?

Let us have a conversation.  Please contact me at rbsegismundo@onehrx.com or call me at +639285064742.