As the world grapples with urgent global challenges, boards of directors face immense internal and external pressures. According to the Australian Institute of Company Directors (AICD) 2021 Director Sentiment Index, 65% of directors believe that the level of uncertainty for their organizations has increased in the past year. Globally, 71% of board members expect their workload to increase in the next two years, as indicated by the 2021 Global Board Survey conducted by Diligent Institute.
It is vital for them to make ethical and virtuous decisions; however, leadership failures continue to surface. The AICD's 2020 NFP Governance and Performance Study reveals that 54% of Australian not-for-profit directors report ethical issues in their organizations. Internationally, the 2020 Edelman Trust Barometer shows that 57% of respondents believe that business leaders are more concerned with their own interests than the greater good.
This article highlights the significance of fostering collective practical wisdom in boardrooms, bridging the gap between individual and collective decision-making.
Collective practical wisdom combines individual practical wisdom's cognitive, reflective, and compassionate dimensions with the six elements of collective wisdom. Developing this wisdom requires cultivating the competencies and behaviors associated with it. The 3A's (Attention, Awareness, Acceptance) and the 3 I’s (Incongruity, Impermanence, Identification) play a crucial role in shaping collective wisdom.
(For further reading see King and Badham 2020)
To enhance the decision-making capabilities of boards, consider these interventions:
Individual reflective skills development: Train board members in contemplative techniques such as mindfulness, insight, and compassion.
Visual images and case studies: Use real-life examples to demonstrate collective practical wisdom.
Collective decision-making scenarios: Provide hypothetical problems for boards to solve, promoting real-life application of skills.
Governance and leadership applications: Integrate wisdom-based decision-making into team development programs.
The benefits of fostering collective practical wisdom include managing uncertainties, ambiguities, and goal contradictions more effectively. This approach addresses cultural values, economic objectives, and social and environmental issues while navigating organizational responsibility.
By embracing collective wisdom, boards can create resilient organizations, better equipped to face the challenges of today and tomorrow.
Read more - King, E., & Badham, R.(2019). Leadership in Uncertainty: The mindfulness solution. Organisational Dynamics, 48 (4), 100674
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