Author: Rosemary Addis AM
The problem
Boards are making decisions amid significant complexity - climate change, technological disruption, geopolitical conflict and shifting expectations from investors and communities. These forces affect costs, markets and long-term performance, yet they do not always fit neatly into financial reports or established board agendas.
The idea
In The Impact Observer, Nizan Geslevich Packin and Anat Alon-Beck propose a participant who sits in the boardroom without a vote, bringing sustained attention to an organisation’s purpose, its impacts and the risks of drifting from its commitments.
The proposal is that an impact observer could help directors ask different questions. That promise depends on a clear mandate, the right experience and a meaningful way to engage with the board.
What we see
This is one of a number of proposals that point to the need for rethinking what informs decision making in the Boardroom. Boards are already experimenting with different interventions – advisers, AI tools, ways to represent nature and other ways to strengthen their decisions responsive to the context. An impact observer is one possible addition to bring different considerations to the table. The role could bring insight into how decisions affect people and the environment, and help surface risks and opportunities before they become obvious on the balance sheet.
The risk is a symbolic appointment, lack of clarity about who appoints the observer, what they are expected to examine or how their advice reaches directors. Without careful design, their presence may change little. And such interventions cannot obviate the fundamental work of Boards to be across the purpose of the organisation, interests they need to consider outcomes at different time horizons, appropriate to their broader context.
What this means
An effective mandate would give the observer independence, a defined scope and the confidence of the board. It would connect purpose and impact to strategy: What changes should the organisation prepare for over the next few years? What are the likely consequences of acting—or failing to act? Are its goals ambitious enough?
Existing impact management standards and practice can help turn those questions into regular practice. Reporting matters most when it informs decisions, prompts challenge and helps the board assess the consequences of its choices.
The bottom line
Impact observers could help boards navigate transition and spot opportunities. They cannot carry the board’s responsibility for doing so. The real test is whether directors own the imperative and use the insight to make better decisions about the organisation’s future and its place in the world.
See Professor Rosemary Addis AM’s full commentary published at the end of the article.
Sustainable Development Goals
