Several of the articles from the winter edition of Ethical Boardroom are now available online, including the one that the editorial board asked me to write, on accountability in the boardroom. Here's a snippet:
The role of the director bears a weighty responsibility, so directors need to take their appointments, and the accountability that goes with such appointments, seriously. Most do, but some, clearly, flout the boundaries of moral, ethical, and in some cases, legal acceptability. Directors need to be beyond reproach. Clear demarcations of what is acceptable – and what is not – need to be established. This may mean that the curious propensity to collect directorships, as some badge of honour it would seem, needs to be called into question by shareholders and by the profession’s body. That directors with six or more appointments have any hope of providing any more than a cursory contribution is beyond us. The challenge, of course, is holding directors to account for this level of performance, among peers, in the public domain and through any legal processes that may be required.
Click here to read the full article. Thank you to the editors for the opportunity to make a contribution. I hope it stimulates some debate and, in some small way, advances the understanding of how boards can and should contribute to business success. If you have any feedback, or would like to explore the issues raised in the article, please contact me.
Christmas is nigh. In four days time, the hurly-burly that typically precedes Christmas—decorating houses, selecting gifts, preparing food and organising travel and accommodation—will be over. The decorations will be taken down and packed away, and most of us will take some time off work. As we relax, many of us recall major events from the year and ponder what the future might hold. I'm no exception, although I have some unfinished business to deal with first: to say thank you.
The goal I set twelve months ago, of completing the doctoral thesis for submission by Christmas, has slipped my grasp. However, good progress was made throughout the year. My new goal, of submitting the thesis by Waitangi Day, is quite achievable. Despite this hiccup, the level of support and encouragement that has flowed throughout the year has been amazing. Thank you. I have met people—some of whom have become friends—at conferences; in business meetings; at workshops; and, on LinkedIn, Twitter and email. Some of the conversations have blown me away. That such a broad church of people from all around the world might be interested in learning how boards can influence business performance has given me great hope; that the research may have some real value in practice.
I will 'sign off' from the thesis write-up on 23 December, and not return to it until 2 January. I'm tired and need a break to recharge for the final push to submit the thesis and then to prepare for the oral examination.
Looking to 2015, I have three main priorities:
If you think you might want some assistance in 2015; or, if have a board vacancy; or, if want to hear about my research or have me speak; or, if you simply want stay in touch, please let me know. I'd love to hear from you. To follow my work, please check this page periodically—the musings will continue to be published for as long as people read them and say they are helpful. Merry Christmas.
A few weeks ago, I signalled my intention to return to the UK and Europe in March 2015, to fulfil speaking and advisory engagements. The trip is now confirmed: I arrive in London on Sunday 8 March, and will be available for meetings anywhere within the UK and Europe, as follows:
If you would like me address a public audience; work with a board or executive team; attend a symposium; facilitate a workshop; discuss the findings of my doctoral research; or, explore collaborative research opportunities, please contact me. I'm happy to explore any aspect of board practice, corporate governance, strategy, business performance and related topics that might interest you. I look forward to hearing from you, to understand how I can help.
The recent sentencing of former South Canterbury Finance director, Ed Sullivan, has raised an interesting issue for directors. Most professional development providers, the Institute of Directors included, teach that the board is a collective of directors and, therefore, the collective responsibility applies. However, the Sullivan case suggests otherwise. Sullivan was found guilty of making false statements (including failure to disclose a related party transaction) and deception. Another director and the CEO were acquitted. The collective responsibility—that the decisions of the board are the decisions of the whole board—has been trumped in this case. Or has it? Whereas other cases against directors have resulted in guilty verdicts across the board (albeit with variations in sentencing), fault is apportioned to one director only in this case. An approachable summary of the verdicts and basis for each judgement, has been published here.
Mr Sullivan appears to have overstepped the mark on several occasions, by making false statements or by withholding information. Justice Heath determined that Mr Sullivan acted alone, and that decisions to make statements or withhold the information were his decisions. It seems that they were not decisions of the board, and therein lies the important distinction. All directors are culpable for decisions made (or not made) by the board—whether every director was present when the decision was made or not—whereas individual responsibility applies when individuals act outside the board. This is because the board is a collective of directors and, therefore, binding decisions of the board can only be made by the board (ie. during meetings of the board).
A question posed at a faculty seminar held at Massey University recently has set me thinking. My supervisor was the primary presenter, and I was there as one of his protégés that had been asked to make a contribution. My task was explore the importance of access (to make first-hand observations of what actually happens in boardrooms) and, given access, to discuss the implications for both research and knowledge. The seminar was a low-key affair. However, one of the questions gripped me. In asking, the person demonstrated that their understanding of business was quite different from mine. The question was valid and needed to be answered (and it was), despite my judgement that is was rather inconsequential given my worldview.
This brief exchange highlighted one of the main challenges of doctoral research: communication. How does one summarise their ideas and findings into a cohesive story that will be read and accepted by three learned people (examiners!) with a critical mindset? I have a fair idea of what I want to say, but what is the best way to get the message across?
The answer seems to lie in one word: pedantry. And therein lies the challenge, for me anyway. While I know my topic pretty well—having lived and breathed it for nearly three years now—an examiner will arrive at the cover page of the thesis document 'cold'. Researchers need to take readers on a journey, starting with a descriptive title and ending with a solid conclusion. The question taught me that the journey is probably as important as the destination. The introduction should simply state the problem and position the research. The historical view of the research literature, the approach taken by me and the findings all need to be revealed in the pages that follow. The summary of findings should be reserved for the final chapter. Positioning the research is also important. The question reminded me that every term that is subject to multiple interpretations needs to be defined, to avoid misinterpretation. I've had to go back to the literature many times in recent weeks, to check things and to make adjustments. Finally, the spelling, grammar and referencing needs to be 'perfect'.
While the going has been tough of late, the good news is that I am stepping closer to the goal with every passing day, even though my arrival is now more likely to be in January. But I'm relaxed about that.
Thoughts on corporate governance, strategy and effective board practice; our place in the world; and, other things that catch my attention.