“Does supervision really cover everything?”

Organizations are facing a growing number of challenges in an ever-increasing number of new areas, such as cybersecurity, digital transformation, ESG, inclusivity and diversity, real estate, equality, AI, labor market shortages, and geopolitical influences. These challenges come on top of the already demanding day-to-day operations.

In terms of relationships as well, the pressure on organizations is only increasing. Organizations must, to an ever-greater extent, be accountable to and engage with their environment. This requires a healthy dialogue with all direct and indirect stakeholders, such as owners, lenders, governments and NGOs, the media, customer representatives, interest groups (environmental, patient, etc.), and labor unions.

The many issues facing the organization, combined with the task of managing its numerous stakeholder relationships, make up the Board’s agenda. This overall picture is intense and changes at a rapid pace. This poses a challenge for modern leaders—and, consequently, for modern oversight!

How is that oversight organized? Most supervisory boards in the Netherlands are organized by function, with areas of expertise such as chair (general), legal, HR, and finance/risk, possibly supplemented by sector-specific knowledge. Sometimes members are delegated, for example, from the works council or the family.

To ensure high-quality oversight, the Supervisory Board must bring together expertise on all relevant topics from the boardroom. Plus, it must have the expertise to oversee the dialogue with stakeholders. In short, from a limited number of functional areas, an increasingly broad range of expertise must be mastered. Is that possible?

Asking the question is answering it, as far as I’m concerned. There is potential for better alignment between oversight of core issues and stakeholders and the functional composition of oversight bodies. It should be noted, however, that the quality of oversight is not determined by expertise alone. Personal competencies such as the ability to listen, see connections, and have the courage to ask probing questions and challenge assumptions are also important. So too are mutual cooperation and the quality of the information provided.

The lack of broad expertise on the Board of Trustees or the Supervisory Board can be compensated for. While respecting the necessary separation between management and oversight, information can be gathered from within the organization through audits and peer review in more functional areas. External consulting is also a suitable approach. However, none of this is sufficient on its own, and doubling the number of supervisory board members is not the solution either.

The combination of more and increasingly complex issues, the organization’s ever-faster pace of change, and the higher demands for dialogue with the external environment call for an integrated approach to managing the organization. This also applies to oversight. “Integrated oversight” offers a comprehensive perspective, in contrast to functional oversight, which is limited to specific subareas. By examining various functions in context, overseers identify connections between various risks and implications.

To achieve this, we must continue to think within the paradigm that the continuity of the organization requires constant change. Transformations are the common thread linking all technological, environmental, organizational, economic, digital, and political developments that influence the organization’s future. An additional area of expertise—“transformation”—with tentacles extending throughout the organization is therefore not an unnecessary luxury in modern oversight.

No, the current oversight is not sufficient. By adding transformation as an additional area of expertise, we will be able to implement comprehensive oversight.