Boards: a timely call for courage

I had the pleasure of working with 24 outstanding business leaders and company directors yesterday—delegates on the IoD Company Director's Course. The topic of the day was strategy, as it always is on the second day of the course. My task was to lead the day and provoke discussion and debate, as part of the learning experience. The entire course is run under The Chatham House Rule, so delegates can speak freely and use real-world examples without fear of sensitive information being made public. However, some of the themes and conclusions that emerged from the discussion can be mentioned:

• Boards need to be involved in the development of strategy, in some way.
• A standard lexicon is crucial, so that everyone knows and understands what is meant when certain words are used. (We had a lengthy discussion on the question, "What is strategy?")
• Boards owe a duty of care to ask probing questions of management, to satisfy themselves as to what is really going on.
• Business is complex and strategy development is not straightforward. Things change, and sometimes tough choices need to be made, often without complete information.

As we worked through the day, it became clear that the delegates had a realistic view of how boards and business actually work, and they recognised that there is often a gap between [tidy] theory and [somewhat messy] practice. The separation of governance and management, first espoused by Berle and Means in 1932 and now accepted dogma for companies in the Anglosphere, may not be the best model, for example. The discussion reminded me of a timely call made in an article that appeared in The Conference Board Review recently:

Unfortunately, despite the theory on how boards are supposed to work, the reality is considerably messier. Reinvigorating boards with curiosity and courage would be a very good place to start fixing what is broken.

Hopefully, delegates are able take away something from the course to ponder and challenge their status quo and some of the accepted maxims of governance. Boards cannot afford to remain as "parsley on fish—decorative but useless" (Irving Olds, Chairman, US Steel 1940–1952). If the behaviours and comments of the CDC delegates this week are any indication, curiosity and courage may be about to re-enter our boardrooms.