I was fascinated to read this post on CorpGov.net today. James McRitchie looks back at corporate governance, boards and company performance outcomes over the last 15 years. His summary provides some great insights into how far we have travelled as directors, researchers and consultants. Unsurprisingly, some contemporary topics were not discussed to any great extent in the past: diversity, technology and strategy, for example. Sadly, many of the issues that pressed in on boards in the past are still alive and well today. These include fraud, compliance, reputation, shareholder issues, and a propensity to look backwards, amongst others.
So, how far have we actually come in 15 years? We have travelled some distance for sure, but not as far as many of us would like to think, I suspect. The compliance requirements today are greater than in the past. Directors seem to have a greater awareness of their responsibilities and commitment to their work now. However, many directors and boards are still grasping at straws—protecting their reputations, focussing on compliance, keeping management honest—rather than looking forward, to the things that actually make a difference to performance and wealth creation. Clearly, corporate governance remains a work in progress.
What will boards and corporate governance look like in 15 years time? Who knows. However, if we can work out how boards influence performance and if we can work out how to motivate directors to concentrate on the things that matter, then there's a chance that value-creating boards might even become commonplace. Is that worth striving for?
Thoughts on corporate governance, strategy and effective board practice; our place in the world; and, other things that catch my attention.