Are you interested in emerging research on boards and corporate governance, and its practical application in boardrooms? If so, two upcoming conferences may appeal (I will be speaking at both of them):
Session summaries will be posted here, so check back later in the week for update, and then again in a couple of weeks time, on 12–13 November. Please let me know if you are interested in a particular paper or session: I will do my best to attend and report on it for you.
Do you know the origin of the well-known saying 'it's better to give than receive'? This phrase (from the Bible) calls our focus into question: are we better to have an outward mindset for the benefit of others, or to concentrate on self? This dilemma has been front of mind over the last twenty-four hours. The following list is a snapshot of the important giving and receiving tasks that I need to complete over the next seven days:
So, a busy seven days lies in wait, with some important giving and receiving tasks along the way. My week highlights a dilemma faced by many busy people: where should one's priorities be placed? All of the tasks are important—but are any more important? If compromises are required, what should prevail? Better to spend time preparing for the teaching and speaking commitments, or the examination—to give or to receive? If you are facing a similar challenge this week, what yardstick will you use to make your choices?
One of the delights of my high school years—close to forty years ago now—was to run. Mostly, I ran 1500m on the track and cross-country events. While I did experience the winning tape a few times, most events saw me finish off the podium. I was a capable but not great runner. Perhaps it was the genes, or technique, or perhaps I didn't prepare sufficiently well.
My lingering memory from those enjoyable days was a piece of advice offered by a quietly spoken coach, at a regional event, "Leave a little bit in the tank, you may need it at end."
To that point, I had run hard from the gun, out in front quietly hoping to have enough energy to keep going until the end. To hold something back seemed counter-intuitive. What if others ran ahead? Could they be caught? I was torn, but took the coach's advice anyway.
Three runners jostled for position for the first three laps of the race. With the coach's words still front of mind, I ran with the group, even though I could have gone faster. As the pace increased on the last lap, I held position. Then, part-way down the finishing straight I gave it everything—slowly pulling ahead to reach the tape first! That little bit left in the tank from earlier in the race had fuelled the final dash to the line.
The parallels with my doctoral research journey—to discover how boards can influence business performance—are clear. The oral examination is just ten days away now. The journey to date has been arduous yet fulfilling, and not without its challenges and setbacks as you might expect. With the oral examination now in sight, should I go all out or hold a steady pace? Will the oral signal the finishing tape has been reached or will the examiners require emendations?
Regardless of the examiner's decision, the goal is to finish well. Thus, the next ten days are being spent re-reading material, pondering options and working through scenarios—all with the wisdom of my coach of old ringing in my ears.
Have you noticed how frequently the term 'corporate governance' is bandied about these days? References are commonplace in magazine articles, research papers, codes and regulations; and the term is frequently mentioned in everyday conversation. However, the term is used in different ways in different contexts, to the point that there are a plethora of understandings of what governance in a corporate context is or might be.
This lack of consensus of what corporate governance is has all sorts of implications for boards of directors in practice—not the least of which is the confusion it causes. Are boards to pursue performance or conformance outcomes (or both), for example?
This well-written article (recently published in the New York Times) highlights some of the issues that boards and shareholders have to deal with as a consequence of the ambiguity. These include whether chairman–CEO separation increases company value or not; whether the number of independent directors is material to improved company wealth outcomes or not; and, that some investor groups see corporate governance as a means of controlling boards.
The original basis for boards (a proxy, following a separation between ownership and control of decision-making), as espoused by Berle and Means in 1932, appears to have been lost somewhere along the way. That corporate governance is now considered to be a panacea for the ills of the business world (or so it seems) doesn't help either.
The board governance community appears to have two options: to persist with seemingly flawed (structure, process, policy) assumptions in search of consensus (and risk further 'governance wars'), or to return to the drawing board to re-assess what corporate governance actually is.
If we return to the drawing board, the most important tasks of the board (setting of strategy and oversight of management in pursuit of shareholder value) could provide a useful foundation of any re-assessment—so long as the socially-dynamic interactions that occur in boardrooms and the competencies of effective directors are incorporated in the analysis. An interesting possibility might be to re-conceive corporate governance is a multi-functional mechanism that is activated by boards in session and through which business performance outcomes are pursued.
Might a mechanism-based conception be a useful starting point from which to re-conceive what corporate governance might actually be and how boards might influence business performance? Quite possibly. In fact, this possibility is one of the main outputs of my doctoral research. I'll be able to discuss it in more detail after the thesis is examined. If you'd like to join the mailing list to learn more, or to explore its application in practice, please let me know.
Each month, Julie Garland McLellan, non-executive director and board consultant, invites several people to respond to a tricky board or governance situation. This month (Oct'15 issue), she crafted a challenging relationship dilemma with an ethical twist, and I was asked to provide a response. Thanks for inviting me to contribute Julie. The dilemma and my response are replicated here:
If you want to understand more about these options, or if you think you might need assistance with a challenging board situation, please get in touch.
Thoughts on corporate purpose, strategy and governance; our place in the world; and, other things that catch my attention.