I like exploring: old towns and villages, and the countryside; enjoying the landscape, clambering along trails and even into river beds to look more closely at flora and fauna. The pictures that form in my mind’s eye provide important context to understand the scene, and what may have gone before. Take the above image for example, a photograph I took a few weeks ago, having stepped off the path while walking towards a disused railway. This seemingly innocuous scene is of a fast flowing river, in a gorge. But more than that, it is just along from an abandoned gold mining settlement and an extraction plant (who knew?), and it has a name: the Ohinemuri River, this section is in the Karangahake Gorge. If the picture is studied more closely, details not apparent at first glance can be seen: plants in bloom, logs dumped from an earlier flood event, and an adjacent highway. Some details seem inconsequential, like the red blooming plant, others are far more significant (the river obviously floods from time to time, the gorge ‘hosts’ a major highway). Clearly, the act of looking ‘into’ the picture, not simply at it, reveals much. And so it is with board work: to look beyond what is written in board papers, to consider what is not written, the wider context within which the company operates, and still-weak signals that may portend trends and potential disrupters is crucial, if the board is to secure a more complete understanding and, ultimately, make more informed decisions. While some boards behave as if such things do not matter, effective boards know better. They are alert to both macro trends and issues (this recent report, from INSEAD, offers helpful insight), and more immediate matters such as sales figures, staff engagement and customer satisfaction trends. When was the last time you scanned the horizon to understand the wider context within which the company you serve operates, and how long has it been since the board thought deeply about the future, and the various risks and opportunities that might effect the company and its prospects?
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I had the good fortune to catch-up with a dear friend and professional associate yesterday; someone I have not had the chance to interact with for nearly nine months. Tony and I chatted about all manner of things: his new barn (read: man cave and office); our exploits with Rosa (read: 1951 MG Y-type); geopolitics; ChatGPT; and more besides. What was fascinating was that we both found ourselves chatting as if the last time we spoke was yesterday. Before we knew it, some 75 minutes had passed by. My father told me that this is a good thing; a sign of true friendship. One aspect of our conversation that piqued my attention was Tony’s investigations around artificial intelligence and board reports—or, more specifically, his application of large language model tools to discern and make sense of board reports. The rapid progress over the past twelve months is a sight to behold. Tony summarised his experiments and findings. Did you know that if you feed ChatGPT a set of board papers and ask it to summarise the key points, including nuances and appropriate questions to ask in a board meeting, the likelihood of the responses being both insightful and relevant is high? You can also use it to discern whether directors have read and understood the board papers! I have been a sceptic about the application of AI tools for some time but, on the strength of what was outlined, I’m ready to believe ChatGPT (or Claude, or other) can be a real boon for directors struggling to make sense of large data sets. While context eludes ChatGPT (and all other LLMs), and meaning and reasoning too, the direction and pace of travel seems to be reasonable. Certainly, progress is rapid. I went to bed after our call pondering a plethora of options, including whether board directors might be supplanted by machinery in future. Of this, I am doubtful. But where LLMs could be quite valuable is to distinguish between lights in the distance: those that are sunlight at the of the tunnel, and those that are a train heading towards me at great speed. And so, with 2025 underway, is your board ready for what lies ahead? Can it, for example, confidently distinguish between [sun]light at the end of the tunnel and a train headlight? Has it carefully considered options having read widely, invoked various tools including AI tools and debated options; or, does it remain reliant on what management feeds up in the board report? To rely on management reports as the sole source of ‘truth’ is not smart; it never has been. PS: this is Rosa:
One of the most satisfying aspects of my work involves sharing insights gained from 'live' experiences, in the hope they might be of some value to others. Whether it be facilitating a boardroom discussion, advising a chair, delivering a keynote, leading a capability building workshop, or chatting with a colleague, the call to share my knowledge and experience is strong. So, when Mark Banicevich, Founder of Governance Bites, contacted me for a chat, I was agreeable, more so as we had previously explored various aspects of board work (the recordings are available: here, here and here). The topics Mark wanted to explore included boards in crisis situations; ethical dilemmas in governance; and, governance in developing nations. A date was agreed, and the 'record' button was pressed. Now, all three of the fireside chats have been published. You can watch them here ⬇️. If you have any questions having watched them, or want to check something out, please feel free to contact me directly. Boards in crisis situations: Ethical dilemmas in governance: Governance in developing nations: |
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