Corporate directors have three fundamental responsibilities:

1) Oversight of strategy
2) Risk management
3) Selection, evaluation and replacement of the CEO

In fulfilling these responsibilities, boards must effectively process information from many sources and make decisions in a group setting in which no one individual has final authority. Potential failure points include use of partial, incomplete, erroneous or irrelevant data and flawed decision-making processes.

In the current environment, which includes fragmented media incented first and foremost to attract viewers/readers, directors face the challenge of identifying fundamental issues and trends so that strategy and risk management can be effectively formulated and implemented. With this in mind, the theme for this year’s CDS is:

“Shocks vs. Shifts: What’s Important, What’s Not, and How to Tell the Difference”

The assumption underpinning this framing is that directors need to focus on shifts (critical underlying or emerging trends), not the shocks that generate intense noise from media and others seeking eyeballs and, moreover, that recent research insights can assist directors in improving the quality of their decisions.

The program on November 10th will begin with a discussion of key findings from behavioral economics. Featuring Professor Tom Chang, this presentation and moderated discussion will focus on lessons from behavioral economics regarding group decision-making processes, associated biases, and approaches for addressing these biases.

With this set-up, the program will utilize the PESTLE framework in assessing the critical external trends that directors need to consider in overseeing strategy and risk management. The November 10th session will include the “P” and “E” elements of the PESTLE model, with a moderated discussion of the critical geo-political and economic trends and emerging issues that actually merit attention by directors.

Fundamental trends and emerging issues that fall under the “STLE” elements of the PESTLE model will be discussed at the March 24th (in-person) session.