A balancing act: where should EMEIA boards focus for long-term success? | Andrew Hobbs, Partner EY

The Better Boards Podcast Series

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Managing an ever-growing agenda, boards today face a plethora of issues that can pull their focus in countless directions. How can boards maintain clarity and focus amidst their expanding scope of responsibilities, especially when it comes to the critical area of sustainability?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, discusses this issue with Andrew Hobbs from EY’s Center for Board Matters. Andrew is also EMEIA Public Policy leader and Chair of the Corporate Governance Working Group of the European Contact Group, Vice-Chair of the Corporate Governance Policy Group of Accountancy Europe, and the author of the annual EY EMEIA Board Priorities report.

“I can confidently say GenAI is redefining business efficiencies and innovation”
Andrew feels boards need to infuse their organisations with the right tech skills and foster a culture that's eager to leverage AI's full potential. Turning AI chatter into meaningful outcomes is challenging. Ensuring GenAI tools are applied within the right contexts and properly integrated with existing systems is key to adding actual value.

“Boards have been spending more time on workforce-related topics for the last couple of years than they have in a long time, and they don't expect that to change anytime soon"
Andrew hears fresh urgency about human capital, skill gaps, and the employee value proposition in his conversations with boards. The present situation with AI, DEI, and the global economic climate means boards are under renewed pressure to provide governance and guidance. Andrew stresses that boards must be proactive in facing the skills shortage while still emphasising DEI.

“The ability to predict the future is not as good as it used to be, or at least that's the perception"
While boards are used to managing risks for their organisations, Andrew feels there is more to manage – and more in flux – than in the recent past. As a result, he recommends boards lean more heavily on scenario planning and increase their monitoring of disparate world events. In this way, boards can help chart a strategic and flexible course.

“Make sure you don't have all your eggs in one basket"
To Andrew, it’s about boards making sure their companies have the agility and resilience to withstand economic or geopolitical shocks. He feels boards should elevate supply chain strategy to reinforce agility and resilience by embracing technology—such as AI and automation—that refines supply chain performance and drives cost efficiency.

“The problem some companies have is a lack of confidence in the likely return on investment of allocating capital towards sustainable sources"
Transitioning to a low-carbon economy is non-negotiable, with significant net-zero commitments from nations and corporations. Despite the inclination to prioritise short-term earnings, boards must confidently champion sustainability as a value-creating strategy, not a cost centre.

The three top takeaways for effective boards are:
1. Boards need to recognise the power of generative AI in driving innovation and improving efficiencies within their organisations and establish robust governance around its use.
2. Human capital, especially concerning DEI, is a critical strategic priority as technological advancements reshape the workforce.
3. Board members must act as catalysts for embedding long-term sustainability into their company's DNA.