The Evolution of the Shadow Board The Evolution of the Shadow Board The Evolution of the Shadow Board

The last few years have highlighted a paradigm shift in the way businesses operate with it widely accepted that simultaneously driving cultural change and digital transformation as one of the most challenging processes of the modern age. In this environment, a call for organizations to think and react swiftly to meet the varying challenges they face has emerged, reinforcing notions that business is entering a new era where listening to and being challenged by your people has never been more critical.

This has highlighted the Shadow Board as a necessity for modern business – providing an authentic source of insight as change is embedded and leadership accountability is driven deeper into an organization. A recent respected pre-Covid study revealed that by 2019, only a few companies had established Shadow Boards in response to changing market conditions but those that did were better placed to understand the pressures facing the workforce and pivot when required.

To try to meet its own needs, KPMG International had the foresight to create a Millennial Board in 2018 which evolved into the Next Generation Council at the dawn of the pandemic and is just one example of the listening enhancements KPMG firms have successfully deployed. Pre-planning, investment and operationalization put firms in a positive position when the pandemic hit because we weren’t starting from scratch and were quickly able to use the Council to challenge and inform our business decisions – providing perspectives and candid insights gained from real-life, on-the-ground experience. This has helped to better understand the new challenges being faced by KPMG firms’ workforce and to lead change from the ground-up.

KPMG International adopted an approach that was aimed at ensuring the Council was an active participant in delivering current strategies. The Council were given assignments based on real, live issues on which they are asked to create recommendations and solutions, to present back to leadership for approval and implementation. Interest is built through this next generation of leaders who engage with and foster collaboration with their peers. This helps bridge the gap between leadership and our people with the Council able to provide the broad perspectives of our people on top of mind issues.

However, to be truly successful, organizations that establish and develop a Shadow Board must not only seek to challenge but be challenged, ready to assume leadership responsibilities and be held accountable where appropriate and necessary. There needs to be leadership commitment to be empathetic and open minded to the idea of hearing from, empowering and driving accountability down to future leaders. Only then can organizations move from a system where information flows in one direction to one with a robust framework of continuous two-way listening and learning.

It is the development of this environment that is conducive to empowering future leaders. When this occurs, positive outcomes become commonplace. One such example at KPMG has been the huge spill-over effect witnessed by the Next Generation Council with leadership teams becoming increasingly engaged and motivated to better understand their perspectives on a wide range of business-critical topics ranging from talent retention, technology, business revenue growth and societal impact to other pressures including mental health. This approach has become integral to how we work, truly embodying our values and establishing a strong foundation for the longevity of KPMG firms as the individuals involved rise through our organization and build on those strategies and initiatives that they helped to create.

As a result, many countries and territories have created their own local Councils, including Canada, China, Germany, Brazil, Spain, Netherlands and the UK, with the hallmark circular two-way listening and learning at its very core. This global adoption is only set to increase across KPMG as their impact is felt firsthand by our people, clients, and wider society.

As the dawn of a new reality sets in, it is hard to deny the positive role the Shadow Board – in whatever its chosen form - has played for many organizations across the globe. The focus now needs to shift from the question of whether or not they are an essential aid to modern businesses, to determining how their continued evolution can be assured given the invaluable insight and support they provide as organizations adapt to the challenges of an ever changing commercial landscape.