The truth, they say, is a good thing, for it will set you free. This seems reasonable, even self-evident to many. But what is truth? Is it a thing (a fact) or a process? Is it deterministic or does it emerge? Is it absolute or relative? And, in a social context, is truth even possible or desirable? The pursuit of truth conjures the notion of a deterministic 'answer' to a question or problem, without worrying too much about (or even considering) the context within which the truth claim exists. Consider darkness. Does being unable to read a book on the patio at twilight mean it is dark? How might this expression of darkness compare with the darkness inside a sealed cavity into which light cannot penetrate? And what of degrees of truth? If just one instance is discovered to be false, does that mean the entire truth claim needs to be set aside? Complicating matters, something may be 'true' but unpalatable, such as, genocide or rotten eggs. Now, consider health. What does it mean to be healthy? For some, maintaining a balanced diet and sleep pattern is sufficient. For others, health involves strenuous exercise and physical fitness. Yet others pursue mental health, a sound mind and great relationships. Is the threshold one of having food, shelter and security; or is a higher order of fulfilment necessary to be healthy? And, how might health and truth relate to each other? Is truth a necessary condition for personal health, or are there situations in which truth might need to be secondary to health? Are truth and health even related? And what of truth and health in an organisational setting? Are the comparisons similar or different? Who decides and what factors should be considered in the decision process? In the past two years, I have come face-to-face these types of questions on many occasions:
Selecting between two tough options is never easy. The 'least bad' option doesn't sit well in many cases. But as in life, decisions in organisations need to be made, more so in boardrooms. If boards are to provide effective steerage and guidance in pursuit of an agreed outcome, they need to roll their sleeves up, understand the options and make a decision. But with what reference point to the fore? Should boards prioritise being 'right' (legalistic, truth), or should they select options more likely to lead to sustainable outcomes (organisational health)? If boards are to govern with impact, the high road is, in most cases, the better option.
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Boards are under pressure. Every time news of another corporate failure hits the news waves, attention is focussed on the board. Such attention is justified; ultimate responsibility for company performance lies with the board after all. That five out of six directors do not have a comprehensive understanding of the business of the business they are charged with governing suggests that boards deserve the scrutiny they get. Regulators have responded by instituting a raft of regulations—and directors' institutions and others have promulgated codes and ‘soft’ guidance too—in the hope of improving board practice. Activists have not been idle either, voting against those perceived to be ill-equipped to contribute well. To date, actions taken have had the opposite effect in many cases. The rising tide of regulations and codes, and activism, has seen many boards adopt a siege mentality. What is more, many boards struggle with the seemingly straightforward task of making smart decisions to ensure future business success. Research published by Henley Business School nearly a decade ago showed fewer than one in three boards have sufficient cognition, cohesion, commitment and knowledge to reach a conclusion, much less make a smart decision. If the level of understanding of the business amongst directors is low, and the quality of the board's decision-making is weak, it is little wonder aspersions are being cast and board effectiveness is being questioned. Reputations are on the line, and rightly so. Boards are by no means powerless, of course. My global research reveals a common pattern amongst the most effective boards: they are aspirational, and they ask great questions to inform their decision-making. Five questions, in particular, stand out:
If boards are to have any hope of governing with impact, directors need to understand the operating context (market and competitors), emerging trends and disruptions (situational awareness), and the business of the business. They also need probe and verify (that is, ask good questions and cross-check), to determine whether the decision under consideration is not only meritorious, but well-aligned with, and contributory to, the agreed corporate purpose and strategy. Anything less is a dereliction of duty, n’est-ce pas? How does you board measure up?
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