The board's new innovation imperative: directors need to rethink their roles and their attitude to risk

Boards of directors face four key challenges in governing innovation: lack of expertise, insufficient time, a no-longer-relevant risk agenda, and an interrelationship with management that requires some retooling. To foster innovative thinking, boards should create diversity among their members, focus on becoming less risk adverse, and drive 'creative abrasion' to rethink conventional, traditional means of governance. Creative abrasion is the development of a wide range of ideas from rigorous discussion and debate. Critical factors include agreeing on metrics to assess innovation initiatives, determining a response in the event an initiative fails, and ensuring the message to management emphasizes reimagining the organization while protecting core businesses.