Innovation on the Board's agenda - A report of the GUBERNA Economic Forum 2023
This year's GUBERNA Economic Forum 2022 focused on how the theme of innovation is on boards' agendas: "Innovation on the board's agenda - a launchpad out of the systemic crisis".
Chris Sunt, Chairman of Belfius' Board of Directors, introduced the evening. He emphasised that the successful relaunch of Belfius in 2012 was not only thanks to cooperation with all stakeholders, from all internal Belfius employees and the network of external agents and all shareholders to all Belfius customers, but also thanks to strict adherence to the principles of good governance. This governance consistently placed innovation at the heart of its agenda, thus setting out the guidelines for management to follow.
Corporate governance is more than risk management and compliance
Liesbeth De Ridder, Secretary General of GUBERNA, then outlined the broader context of the Innovation theme. Directors face major challenges. There is the inflation surge, the war in Ukraine, the energy crisis, and all this against the backdrop of the swelling effects of climate change. Since innovation is one of the means to meet these challenges, corporate governance needs to be more than just risk management and compliance. Liesbeth refers to Prof. dr. Abigail Levrau's contribution to the ecoDa white paper "Innovation: Is The Eu Corporate Governance Framework Fit For Purpose?" published in October 2022. The key innovation domains identified therein are digitalisation, business ecosystems, quality information, an appropriate regulatory framework that gives oxygen and leeway to innovation within companies, and the overarching importance of ESG. Good governance that invests in innovation in these domains can create the most opportunities and added value.
In her keynote, Marianne Collin, Chief Risk Officer of Belfius, gives an overview of the main economic challenges ahead. She describes the several shocks of recent years, including the major financial crisis of 2008-2009, the European debt crisis of 2010-2011, Brexit in 2016, the Covid-19 pandemic, up to and including the war in Ukraine this year. Although the economic impact of these shocks was always partly cushioned by the three factors of generous monetary policy by the European Central Bank, expanding fiscal spending by EU member states, and structural improvements in the private sectors, we are facing an alarmingly strong surge in inflation for the first time in years. Collin expects inflation to struggle to fall below 6-7% in the coming year due to a confluence of three factors: the recent deglobalisation of trade flows, demographic pressures from an ageing population, and decarbonisation investments.
All this could have a negative impact on the competitive position of Europe and Belgium. The Belgian economy has so far proved resilient to these shocks, but there is a risk that markets could suddenly punish Belgium with its high public debt - similar to the panic the UK government recently caused in debt markets with an unbalanced budget plan.
Quality and diversity in boards of directors
The ensuing panel discussion is moderated by Véronique Goossens, Chief Economist at Belfius. She interviews Gaelle Helsmoortel (CEO dgenious and Chair Women on Board), Marc Raisière (CEO Belfius), Elke Kraemer (Founder of Clusity and InspiringFifty), Patrick Van den Bossche (Lead Sustainability Agoria) and Danielle Jacobs (CEO Beltug).
Asked whether we should be concerned about whether there is enough quality and diversity on our boards, Gaelle Helsmoortel stressed that a board should first ask itself what the needs of the organisation are, and based on that, appoint various profiles to its board. Danielle Jacobs agrees with the observation that there are still too many boards with only financial profiles, which means that the opportunities offered by new technologies are too often neglected or unheard of. Elke Kraemer adds that a diverse board should advise, listen and be a guide from the beginning of the innovation journey when formulating KPIs to the end of the journey where one looks at whether the KPIs have been achieved.
"Innovation without ambition is nonsense."
Marc Raisière argues that innovation in itself is not yet the solution or an end in itself: "Innovation without ambition is nonsense." We have many highly educated people in Belgium, but they are often not challenged-even by their directors-to ambitious proposals and plans. Patrick Van den Bossche adds that technological innovation still too often only looks at the damage a new technology could cause, and not enough at the opportunities the new technologies can offer. Belgian companies can make a virtue of necessity if they counteract our resource poverty and high wage costs by using raw materials as efficiently as possible.
Innovation starts with awareness, and as a way of raising awareness, Patrick Van den Bossche suggests putting the risks identified by the World Economic Forum on the agenda of all boards of directors throughout the year as standard to keep them at the forefront. According to Elke Kraemer, directors should also become more aware of the fact that although boards have become more diverse, there is still a lot of work to be done in the technology sector to enable a better flow of more diverse (gender) profiles in management positions as well. Finally, Danielle Jacobs points out that directors need to become much more aware of the international dimension. For instance, avoiding dependence on non-European cloud platforms will be higher and higher on the agenda in the coming years.
An ambitious agenda
GUBERNA's Economic Forum 2022 gave attendees not only a thorough overview of the challenges facing Belgian executives, but at the same time an ambitious agenda for the coming years to meet these challenges. Belgian companies have the expertise and experience to come up with innovations that turn our weaknesses into strengths and opportunities.