Diverse challenges, from digitalization to regulation, are preoccupying boards of directors. Asia is not getting the attention it did in the past.Geopolitics has also led to boards paying less attention to Asia, particularly China. Some US firms have even banned travel to China for top execs and board members.
‘I’m worried that our board’s knowledge of Asia is slipping. ‘
The Asia CEO’s role is critical to bridging the gap between HQ and the region.
‘As an American who's worked both at headquarters and in Asia, it's a constant battle balancing whatever our people in the US see on Fox News versus what it means to really do business here.’
Why it matters: A board’s lack of attention, lower awareness, and misperceived notions can lead to slower decision-making and resistance to further investments in the region.
Outsiders can play a critical role in educating board members about what is happening in Asia.
‘We’re thinking of ways to rebuild Asia insights at the top of the company. This might include regular board briefings by specialist outsiders, either ad hoc or organized into an advisory board.’
But hiring an ‘Asia insider’ has its drawbacks.
‘In the last 20 years, boards would appoint an Asian insider, often with good connections to the local elite. Too often, the insiders were isolated from the rest of the board discussion.’
An advisor with hands-on experience running an MNC’s Asia operations may provide more relevant insights.
‘Today, it might be better to seek a top executive running Asia for a global MNC or one of the big regional firms. This can bring more insights into the rapid evolution of strategy and tactics, which is applicable to every market, not just Asia.’
Some firms have given up. They have found that greater autonomy for Asia helps address the knowledge gap.
‘We have tried to explain what goes on in Asia to headquarters and they have also tried to understand what happens. Now, both sides are giving up. They now say, “I'm okay if you go ahead with the way you want so long as you report back to me what has been done.”’
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