The Director's chair
The “Judgment Premium” Is The Most Sought-After Quality In Chief Executives Today
The Director's chair
Duriya Farooqui, a board director at NYSE, Intercontinental Exchange (ICE), and InterContinental Hotels Group, shares timely insights. In this The Director’s Chair interview, she explores building a resilient organization, the rising demand for judgment in leadership, and how boards can navigate disruption, AI, and global complexity.
Reimer: As a director, how do you balance staying focused on the long-term while there are so many urgent issues cropping up day-to-day?
Farooqui: The right balance is always to be thinking about how the company is positioned in the market, how it’s positioned relative to competitors, how it’s positioned from a regulatory context, and how it’s positioned in the global environment.
To the degree that those factors are changing, you have to think about what will impact the way your company is positioned in the short- and long-term. You have to remain focused on preserving long-term value. Is something happening today that is going to shift you off course from your trajectory? If so, how do you get ahead of it?
That is why it’s so important to have a diverse set of perspectives, experiences, and voices in the boardroom that are additive, so that they can engage with management as problem solvers, advisors, and thought partners.
Bryant: What issues are getting more airtime in board meetings?
Farooqui: In this context of economic uncertainty and volatility, the number one question is, how do you make the business resilient? Because of the shifting world order, traditional global alliances and supply chains can’t be taken for granted. So, agility and effective risk management are really critical at this time.
Technology is a big issue, particularly AI and the opportunities it presents for new competitive advantages for growth. If you don’t keep up with them, you could be left behind. Another priority is making sure you have the talent and leadership that will thrive in this environment. That’s different from leaders who are really good at keeping the lights on. How do you build, empower, motivate, cultivate, and hold accountable a leadership team that can do their best work in these circumstances?
Reimer: You mentioned the importance of building a resilient organization. How do you do that?
Farooqui: Everybody got a chance to think deeply and intensely about that during Covid, because that was a real test case of what happens if you have a massive, sustained disruption. On my boards, we thought a lot about what is really our core business—what actually recovers first, what makes you money, and what loses you money at a time like that. Businesses have learned some lessons from that experience, and many of them came out of it more resilient. They’ve seen how their business performs when it is hit with a really intense exogenous shock.
The second thing is that there is a recognition, or there should be, that the demands for technology and integrated leadership skills are going to outstrip supply for some time. What do I mean by that? Every company, regardless of whether it’s a tech company or not, is thinking about what AI will mean for their industry, for their organization, for their product, for their business, and for their operating model. And there aren’t enough experts and experienced tech workers in that space to meet that demand. It will take some time to catch up.
The same is true for senior executives with integrated leadership skills—they are forward thinkers about innovation, technology, and disruption, even if they didn’t grow up with specific tech experience earlier in their careers. There is very high demand for both those skills, and it’s going to outstrip supply for some time. So, how do companies think about managing through that?
The third aspect of resilience is understanding geopolitical considerations, which have risen to the forefront for companies as they think about where to operate, invest, and raise capital. You have to be clear-eyed about all those factors as you run and build a business today. And to be clear, these are not all headwinds. These dynamics also create opportunity. You just have to be thinking strategically about what that is, where that is, and how you get ahead of the curve.
Bryant: Directors also have to think about the resilience of the leadership team, which is shouldering more and more of these pressures and challenges.
Farooqui: With the boards I’m on, we’re always thinking about how the CEOs are doing. Are they inspired? Is the energy level high? Because one of the biggest responsibilities of boards is succession planning, you have to have a strong pulse for how the CEO is doing.
I also think that the tension over remote work, especially as more companies require their employees to be back in the office more often, is creating a lot of stress for leaders from the C-suite down to front-line managers. There is no easy way to think about how you lead in a hybrid context.
There’s no playbook for navigating a post-Covid environment. And we don’t know about the long-term impact of the AI revolution. Right now, the pace at which you make decisions matters as much as the decisions themselves. Because there is no playbook, you have to apply judgment. The “judgment premium,” as I call it, is the most sought-after quality in CEOs today, because there isn’t a case study you can pull out from five or ten years ago to help navigate the challenges we’re facing.
Reimer: How can a board spot and develop those leaders, given that so many companies rely on benchmarking against a pipeline of leaders who were operating in a very different environment?
Farooqui: It is a challenge. You need leaders who are strategic thinkers, with the instincts and acumen and ability to think globally about the context in which we operate, and be able to understand when and where it’s most helpful to lead versus follow. That comes from a set of experiences and attributes that are very difficult to assess in a traditional context.
And I mentioned before about the importance of pace in decision-making, and how it can matter as much as the decisions themselves. An example of that is how boards think about ESG, particularly commitments and goals around climate. How much do you lean forward and set the pace for the industry? Or do you wait for regulation? And if you think regulation is coming, how do you make sure you are well-positioned to react to that? That takes a lot of judgment. You have to think about how to position yourselves in the risk and reward equation in ways that account for a range of outcomes.
Bryant: What were important early influences that shaped who you are today?
Farooqui: I was born and raised in Pakistan, in a place where girls were not necessarily encouraged to be ambitious. But I competed in field sports, and I was competitive academically. I just had that spirit. I’ve always been a very curious person.
When I came to the United States as a student, I didn’t have the expectation of a level playing field. Because I was an immigrant, I made the assumption that I had to be 30 to 50 percent better than the person next to me. My attitude was always “bring it on.” I was not afraid of that.
That allowed me to really lean into problems and go after big solutions. I wasn’t worried about whether I was being treated fairly or unfairly. If there was an opportunity, even just a small opening, I was going to go through it. I also made it a practice to raise my hard for the hard things that no one wanted to do, because often they were the most valuable things to accomplish.