In a rapidly changing business landscape we need to focus on, and discuss how, boards that are facing the dual challenge of prioritising critical issues while shaping a legacy of accountability, innovation, and ethical governance, can succeed on both fronts.
This journey is not merely about managing the present. It is also about building a foundation for sustainable success that resonates across generations.
From navigating economic volatility to tackling climate change, cybersecurity threats, and societal expectations, boards must balance immediate priorities with long-term value creation.
This delicate balancing act requires clarity of purpose, strategic foresight, and a commitment to leaving an enduring legacy.
The Art of Prioritisation
The cornerstone of effective governance is prioritisation.
Boards that excel in prioritising do so by aligning their organisational purpose with strategic goals.
Purpose, in this context, is more than a mission statement—it is the organisation’s reason for being. It encompasses values, vision, and the impact the organisation seeks to create.
Why purpose matters in board decision-making
Purpose serves as a compass. It helps boards identify what truly matters to the organisation and its stakeholders. It ensures decisions go beyond financial performance to include social, environmental, and cultural outcomes.
In times of crisis or uncertainty, purpose acts as a north star, guiding difficult decisions based on long-term vision rather than short-term pressures.
How to layer from Purpose into the Foundations of Effective Prioritisation
To prioritise effectively, boards must embed purpose into their governance structures. This involves:
1. Integrating Purpose into Governance Frameworks:
Purpose should be reflected in board charters and meeting agendas.
Strategic initiatives must be evaluated through the lens of purpose.
Performance metrics (guided by the data), should encompass both financial and non-financial outcomes tied to purpose.
2. Prioritising Long-Term Value Creation:
Boards must evaluate initiatives based on their alignment with organisational purpose and their ability to deliver sustainable value over time.
Key questions directors must ask include: Does this initiative align with our mission? Will it create lasting value? How does it contribute to our long-term goals?
3. Using Purpose as a Filter for Risk Management:
Purpose can act as a filter for assessing risks and opportunities. Boards can evaluate whether potential risks—such as reputational damage or misaligned investments—are consistent with their values.
4. Engaging Stakeholders in Defining Purpose:
Boards should involve internal and external stakeholders in defining or refining the organisation’s purpose to ensure it reflects the needs of employees, customers, investors, and communities.
For example: Guide Dogs where I serve has always engaged stakeholders to align its purpose with customer or client expectations while navigating challenges such as the NDIS, advocacy, financial sustainability and operational efficiency.
Does anything change regarding Purpose in times of Crisis Management?
Only in so far as that during challenging times, aligning purpose with strategic goals becomes even more critical.
Boards must resist the temptation to focus solely on short-term survival at the expense of long-term vision. For instance, during the COVID-19 pandemic, Australia Post faced unprecedented challenges in meeting parcel delivery demands while maintaining service standards in regional areas. By aligning its response with its purpose—“delivering essential services”—the board prioritised investments in logistics infrastructure, expanded services in underserved communities, and supported employees through enhanced safety protocols. This alignment not only helped navigate the crisis but also strengthened Australia Post’s reputation as a trusted institution.
Lessons from Effective Boards
What can we learn from boards that prioritise effectively?
There are four key lessons:
1. Make Purpose Actionable:
Purpose must be more than words; it should guide every decision.
2. Focus on Stakeholder-Centric Goals:
Boards should prioritise initiatives that deliver tangible benefits to stakeholders while staying true to their mission.
3. Balance Short-Term Needs with Long-Term Vision:
Effective boards address immediate challenges without losing sight of overarching goals.
4. Use Purpose to Drive Innovation:
A clear purpose inspires innovative solutions that address societal challenges while creating value for the organisation.
Legacy: The Enduring Impact of Governance
Beyond prioritisation lies the concept of legacy. What kind of organisations do we want to leave behind? How can today’s boards ensure they are remembered not just for financial success but also for ethical leadership and meaningful contributions to society?
Legacy is also built by embedding purpose into governance structures, prioritising long-term value creation over short-term gains, filtering risks through an ethical lens, and engaging stakeholders meaningfully.
To thrive in complex environments such as those we face today, boards must embrace change boldly.
- They must adopt innovative technologies like AI-driven analytics to enhance decision-making efficiency.
- They should foster cultures of continuous learning to stay ahead of emerging trends like artificial intelligence or geopolitical shifts.
- They need to balance risk-taking with opportunity-seeking—a mindset essential for addressing future challenges like climate change or digital transformation.
Research shows that boards often struggle to break free from short-term thinking due to shareholder pressures.
However, those who dare to recalibrate their focus toward long-term sustainability will not only meet public expectations but also ensure their organisations remain resilient amidst uncertainty.
Striving to Leave a Legacy and Build Sustainable Success
To leave a legacy as a board member, we need to focus on actively mentoring and developing future leaders within the organisation, championing impactful initiatives that align with the company’s long-term vision, fostering a culture of strong governance and ethical practices, and ensuring a smooth transition of knowledge and responsibilities to your successor when leaving the board, effectively documenting your contributions and key insights throughout your tenure.
Principles for Directors to Leave a Legacy
1. Prioritise Resilience Over Efficiency.
Directors should focus on long-term resilience by adhering to sound operating principles and maintaining organisational health. This involves navigating challenges without compromising the company’s strategic goals or values.
How? Champion impactful initiatives:
Identify strategic priorities that align with the organisation’s long-term vision.
Advocate for innovative projects and initiatives that create lasting positive change.
Use your influence to secure necessary resources and support for key initiatives.
2. Foster Strong Leadership
Boards must appoint capable leaders and empower them to manage daily operations effectively. Directors should focus on governance while supporting management in executing the company’s vision.
How? Develop future leaders:
Actively mentor and coach emerging talent within the organisation.
Create opportunities and share knowledge.
3. Earn Trust Through Engagement
Trust is built through consistent communication and meaningful engagement with stakeholders. Directors should foster transparency and cultivate relationships that strengthen the organisation’s reputation.
How? Focus on building a positive culture:
Foster a collaborative and inclusive environment where diverse perspectives are valued.
Encourage open communication and constructive dialogue among board members and management. Promote a culture of continuous learning and improvement within the organisation.
4. Ensure Board Diversity
A balanced board with diverse backgrounds, skills, and perspectives enhances decision-making. This diversity equips the board to address complex global challenges with fresh insights.
5. Exercise Sound Judgment Amid Volatility
In an unpredictable world, directors must rely on collective expertise to make informed decisions. A diverse board enhances judgment capacity, enabling better responses to ambiguity and uncertainty.
6. Balance ESG Priorities
Boards should maintain a holistic focus on Environmental, Social, and Governance (ESG) factors. While addressing immediate concerns, directors must ensure long-term sustainability by balancing all ESG dimensions.
How? Promote strong governance:
Lead by example with high ethical standards and commitment to compliance.
Ensure robust oversight mechanisms are in place to manage risks effectively. Champion transparency and accountability within the board decision-making process.
7. Ask Strategic Questions
Directors should adopt a “nose in, hands out” approach by asking critical questions that clarify strategy without micromanaging. This allows management to develop actionable solutions while maintaining accountability.
Understand what is most important to you and ensure your actions on the board reflect those values. Always keep your behavioural ethics in and your integrity at the forefront of your behaviour.
I am striving to ensure that as directors we acknowledge that Governance is no longer just about compliance—it is about crafting a sustainable future.
By embedding purpose into governance frameworks, prioritising long-term value creation, filtering risks through values-driven decision-making, and engaging stakeholders inclusively, these boards will leave an enduring legacy—one defined by accountability, innovation, and ethical leadership.
Boards that align their purpose with strategic goals create organisations capable of thriving amidst complexity while making meaningful contributions to society.
By adhering to these principles, directors can ensure sustainable growth, foster trust, and leave a meaningful legacy that aligns with the organisation’s long-term vision and values.
Let us commit ourselves today to building such legacies—legacies that inspire trust among stakeholders and ensure Australian organisations remain beacons of progress for generations to come.
Delivered by Cheryl Hayman, non executive director for the Governance Institute of Australia’s webinar titled Ensuring your Board is Fit for Purpose and Value Creation in 2025 and beyond.