Corporate Governance In The Digital Age: Analysing The Impact Of Digitalization On Boards Of Directors

Mr. Vijaykumar Meti, LL.B., Smt. Basamma Gurulingappa Law College in Lingasugur, Raichur District, Karnataka

ABSTRACT

The ongoing trend of digitalization is profoundly impacting societies and organizations, and how organizations navigate this impact could determine their future competitiveness. The pivotal role that the board of directors plays in guiding organizations through this changing landscape has been brought into question considering various corporate failures. The effectiveness of boards is under scrutiny, prompting a critical examination of their ability to create value for organizations in the evolving digital era.

In addressing this crucial research question, we propose a framework that anticipates the influence of digitalization on boards in two key areas. Firstly, we posit that future boards will evolve into virtual networks of individuals, diminishing the need for direct management oversight and emphasizing shared leadership approaches. Secondly, we suggest a shift towards dynamic board agendas that respond to organizational threats and opportunities. This agenda would prioritize learning and knowledge management, reflected in the structure of board committees. Drawing on dynamic capabilities’ arguments, our framework aims to contribute to understanding what characteristics will render boards suitable for future organizational needs.

This innovative approach represents the first study to explore how boards must adapt to meet the challenges of a digital world, offering insights that go beyond traditional perspectives on board roles and structures. The implications for both theory and practice call for a re-evaluation of the functions and composition of boards in response to the demands of the digital age.

Keywords: Digitalization, Board of Directors, Shared Leadership, Dynamic Board Agenda, Corporate Governance, Digital World, Technology Adaptation.