Hidden Tips to Grow Your Business When Growth Is Declining
Want To Grow Your Business When Growth Is Declining?
In the current economic climate, many companies are struggling to keep up with the demands of consumers and investors. As a result, many businesses turn to global directors to take on new tasks and responsibilities to prevent a decline in revenue.
It can include increasing marketing efforts or finding new ways to cut costs. However, as growth slows down, it becomes more difficult for directors to significantly impact the company.
What Should Directors Do To Grow Your Business When Growth Is Declining?
Global directors are in a difficult position when growth is declining. They must make tough decisions about allocating resources and which businesses to keep or close. Directors must also consider how to respond to changes in the market and consumers while maintaining the company’s culture and identity.
The role of the lead independent director is a critical one in any company. This individual works with the CEO to set the company’s strategic direction and oversees the board’s management. However, many potential pitfalls can occur when growth declines while working with the CEO.
This blog post will discuss being a successful lead director during uncertain economic times. In addition, we will review board structures and best practices in innovation strategies from the planet and compare corporate board governance structures from over 50 countries.
According to International Monetary Fund (IMF), World Economic Outlook published April 2022, WAR SETS BACK THE GLOBAL RECOVERY Summary Points are-
- The war in Ukraine has led to a humanitarian crisis that needs to be resolved peacefully. The conflict will also lead to a slowdown in global growth in 2022 and add to inflation. Fuel and food prices have increased rapidly, hitting the hardest vulnerable populations in low-income countries.
- Global growth is projected to slow from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. It is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January.
- The global growth rate is expected to decline to 3.3% by 2023. It is partially due to increased commodity prices and other broad price pressures from wars.
- The inflation rate in advanced economies is expected to be 5.7% in 2022, while the inflation rate in emerging market and developing economies is 8.7%—1.8 and 2.8 percentage points higher than projected last January, respectively. Therefore, multilateral efforts to respond to the humanitarian crisis, prevent further economic fragmentation, maintain global liquidity, manage debt distress, tackle climate change, and end the pandemic are essential for the future of our world economy.
Is Growth Declining? Strategies to grow your business
When growth is declining, global directors have a few options. They can either increase investment in new products and services or focus on cost-cutting measures. Increasing investment can be risky, but it can also lead to long-term growth.
Cost-cutting steps may help in the short term; however, for long-term viability and stakeholders’ capitalism, it is essential to steer the boardroom through the crisis and come out stronger together.
Applying Artificial Intelligence to current products and services with cutting down the carbon footprint is fundamental in a post covid world. Focusing on R&D, M&A, and moving to lower tax locations are some of the tools.
Experimenting with Innovation best practices case studies are listed later in the column below.
Pressures from institutional investors on Environmental, Social & Governance factors in improving ESG scores will be a key to distinguishing and standing out from the crowd.
What’s a Lead Director? Difference between Lead Director and Chair of the Board
The lead director is a member of the board of directors who works closely with the CEO to set the company’s strategic direction. This individual is typically responsible for overseeing the board’s management and ensuring that all members fulfil their duties. The lead director may also be involved in hiring and firing the CEO and evaluating their performance.
It is important to note that the lead director is not the same as the board chairman. The board chairman is typically responsible for presiding over board meetings and ensuring that the board functions correctly.
On the other hand, the lead director is more focused on working with the CEO to set the company’s strategic direction. In many cases, the lead director is also a member of the executive team and reports directly to the CEO.
Separation of CEO and Chairman Global Survey
According to OECD Corporate Governance Factbook – 2021, which provides information about the institutional, legal, and regulatory frameworks for corporate governance across 50 jurisdictions worldwide. Fifty jurisdictions, including all 38 OECD countries plus Argentina, Brazil, China, Hong Kong (China), India, Indonesia, Malaysia, Peru, Russian Federation, Saudi Arabia, Singapore, and South Africa.
The Factbook complements the G20/OECD Principles of Corporate Governance. Governments can use it, regulators, and the private sector to compare their frameworks with those of other countries and get information on practices in specific jurisdictions. (Findings Paraphrased below)
- The percentage of countries that demand or encourage the separation of the board chair and CEO has increased dramatically in recent years, reaching 76% in 2018, up from 36% reported in 2015.
- Only 32% of one-tier board systems have the board chair and CEO split as a legal requirement. Yet, it is encouraged by code recommendations or incentive devices in an additional 44% of jurisdictions. Only 11% of one-tier board jurisdictions required separation, and just 25% of codes recommended it. Overall, this development reflects a continuing trend, with a substantial increase in the last two years.
- In “comply or explain” laws, 12 jurisdictions demand and 15 recommend dividing the two posts. In addition, India and Singapore promote board independence by imposing a higher minimum ratio (50% rather than 33%) of independent directors on boards where the chair is also the CEO through an incentive system.
- In Israel, a separation may be approved by most disinterested shareholders or if less than 2% of all investors object to the proposition.
Growth and Innovation declines are Concerns for boardrooms? Get help your business grow
What does a board do when growth is declining? It is a difficult question for many companies. So let’s review and learn innovation case studies to promote Innovation and development.
According to the Global Trade and Innovation Policy Alliance (GTIPA), In a paper titled.
National Innovation Policies: What Countries Do Best and How They Can Improve A survey of foreign think tanks summarizes what 23 nations and the EU are doing best regarding innovation policy and where there is the tremendous potential for improvement.
The triumphs may be examples for other nations to follow in many situations.
- The world economy is highly dependent on Innovation. However, the worldwide innovation output requires two essential elements: To begin, governments must create effective innovation-maximizing regulations.
- Second, innovation-based industries must grow by having free access to large international markets, facing excessive non-market-based competition, and providing substantial intellectual property (IP) protections for the world economy and trade system to function. While both are important, the paper focused on the former.
- Innovation strategies in countries must integrate various policies on scientific research, technological commercialization, information technology investment, education and training, taxation, trade, intellectual property rights (IPR), tax policy, government procurement, and regulatory issues in a cohesive way to promote economic development.
- At least 50 countries have now presented national innovation plans, and most of them have even established different agencies or foundations to boost their nations’ businesses and organizations’ innovation outputs. Countries’ innovation policies seek to explicitly link science, technology, and Innovation with economic and job growth to create a game plan for competing and winning in Innovation.
- This paper summarizes what 23 countries and the European Union are doing best in innovation policy and where they have the most room for improvement. The first thing that stands out is that many nations, including Chile, Ghana, Honduras, and the United Kingdom, have established government agencies, councils, and organizations responsible for Innovation. For example, in Chile, a new National Office of Productivity and Entrepreneurship was established; in Ghana, a Presidential Advisory Council on Science, Technology, and Innovation was formed; and the United Kingdom set up UK Research & Innovation to coordinate funding for research and Innovation. However, the lack of such a construct was regarded as a shortcoming in American, Malaysian, and Italian innovation policy.
- Several nations, including Argentina, Canada, Chile, China, Italy, Korea, and Poland—have implemented robust and inventive tax policies, including more generous R&D tax credits, investment incentives, and collaborative tax credits—which provide more significant subsidies for industry-funded research conducted at universities—and patent boxes that taxed profits from new IP at a reduced rate.
- The European Union, Mexico, Pakistan, Taiwan, and Colombia are among the countries that have implemented open data projects as a platform for Innovation. Mexico’s National Digital Strategy has almost 40,000 data sets available on its open data site. The Colombian portal currently features over 10,200 datasets from 1,184 public institutions.
- Several nations have implemented policies to promote leadership in new information technology application areas. Canada has established organizations and devised plans to encourage the development of artificial intelligence (AI) and quantum computing. The EU has launched an AI strategy and assigned each member nation. France, as well as Korea, is working on an AI plan.
- Bangladesh, Italy, Malaysia, Mexico, Sweden, and the Philippines have all outlined policies to promote digitalization in manufacturing, also known as “Industry 4.0,” among other things. For example, in 2017, Manila launched the Inclusive, Innovation-led Industrial Strategy, which is intended to provide a different approach to industrial policy for a nation based on competition and Innovation.
In conclusion, global directors face declining growth rates and must find new strategies to keep their companies afloat. They can focus on cost-cutting or increasing revenue, but they must also be creative to remain successful. Therefore, directors should continue to develop innovative ideas and strategies and stay up-to-date on the latest trends in their industry.
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