 I have a thing about bridges. They are, in my mind at least, points of connection: not only between physical locations separated by water or chasm, but also between people, and between seemingly discordant ideas. This week I have been in the United States and Canada: in Chicago, to deliver a keynote at the Private Directors Association national conference, lead two masterclasses and fulfil other engagements; in Toronto, to speak at a Governance Professionals of Canada event and attend other meetings; and, in Knoxville, to catch up with a dear friend of some 45 years and take in some local history. In my downtime, I have done as I usually do: sate my curiosity—taking in the local sights, sounds and smells, and getting a sense of the history. From lakes (Michigan and Ontario), rivers (Tennessee) and vistas, to monuments, plaques and people, the social fabric that makes a place, well, a place is plain to see and feel. And, as I walked, I stopped periodically, to ponder those who went before, what they might have thought, and their intentions and actions as they went about their lives.  Then, last night, as I enjoyed hospitality in Knoxville, my mind was drawn to a comment my father shared many years ago, “Bridges are made for crossing, not burning.” Now, five decades on, I would add, “Bridges should be built and then crossed.”  To cross a bridge as it is being built is folly. Not only is this a poor use of resources, the likelihood of arriving at the intended destination is low. But this is what many executive teams and boards seem to do—they work it out as they go, or they assume that someone else has the matter in hand. Sometimes, they are so busy operating that they do not look past the here and now. But that is hardly a sound way to create value or a thriving business that endures over the longer term. The role of the board of directors is to govern, meaning to provide effective steerage and guidance. And, one of the four principles of corporate governance is ‘set direction’, meaning, to determine corporate purpose and strategy. And therein lies an awkward bridging question: If a company’s board has not set direction, what hope should the executive have of leading well; or the staff being productive; or, ultimately, of the potential of the company being realised? The strategic governance framework is one option boards may wish to consider, as they strive to see around corners and govern with impact. PS: For curious readers: The bridges pictured are the Gay Street Bridge in Knoxville, and the Michigan Avenue Bridge in Chicago.
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 I was fascinated last evening, at a variety of behaviours on display following news that UA787, a flight from Houston to Chicago-O’Hare was delayed due to a technical problem. The captain provided updates, initially announcing the delay and reason. A little later, he came on the PA again, to apologise. Then he added, “that the engineers were working on it, and were confident of resolving the issue soon.” Some, likely the elderly gentleman I was seated beside, were a little anxious. He was being met by a family member and did not want to put the family member out at all. His response was to ask the flight attendant for an ETA, so he could make a telephone call to the party meeting him. Others, such as the business woman seated across the aisle, became agitated, as if the delay was the flight attendants’ fault; the impression being that she was busy and important and, therefore, the problem needed to be fixed “now”. Her response was direct: as soon as she had the opportunity, she collected her things and hurried off the flight. Others got off too, without fanfare. Yet others, sat quietly and waited, knowing there was little they could do. The situation provided an impromptu study of human behaviour and, in particular, how some people seem to have lost (or rejected) the art of waiting. I wanted to get to Chicago as much as any other passenger, especially having already flown in the care of Air New Zealand from home to Houston. And, a younger me may well have become frustrated at the situation, as the woman who left abruptly. But, I have learned to leave those things we cannot control to others. As I reflect on the experience, my mind is drawn to board work. The role of director is one of service. Have I allocated sufficient time to not only read papers, but consider them and read further? How patient am I when arrangements do not flow as planned, especially logistical arrangements? Is my schedule crammed, or does it provide space, not only as contingency but also for critical thinking? The very best directors arrive at meetings prepared, calm, and ready to go, having allocated space before the meeting, to read, think, and prepare questions. The rest, who tend to look harried and unprepared, need to reflect on their situation. Why are they not ready to contribute well? Are they poorly organised? Are they overboarded? Ultimately, are they fit to serve as directors, given the duties they owe? PS: UA787 departed 57 minutes late, and arrived approximately 24 minutes behind schedule. The Captain apologised once more. Flight attendants were polite. Passengers were looked after. The world didn’t end.
 Since time immemorial, man has sought to explore: natural curiosity has led to many discoveries, of previously unknown lands, flora and fauna, and more besides. Innovations and inventions too; discoveries enabling further exploration, and on it goes. Through the arc of history, exploration and discovery has been based upon empirical techniques—going and having a look. About six decades ago, Jane Goodall put this approach to work as part of her research to learn more about chimpanzees. Her assessment was, straightforwardly, that if reliable understandings of how chimpanzees socialise were to be achieved, they needed to be watched, directly, over an extended period, as difficult as that might be. The extended period is necessary because behaviours change when a new actor arrives. Thus, Goodall’s study could not begin in earnest until the chimps became more familiar with her and reverted to behavioural patterns thought natural. When behaviours reverted, as Goodall thought they might, several new discoveries not previously known were made. The approach Goodall used, and her discoveries, demonstrated the high value of longitudinal ethnographic techniques when studying social groups and their behaviours. And yet, while this has been understood for decades, centuries even, its application to my field—boards—is rare. Instead, since the dawn of board research, the dominant paradigm has been to collect data about directors, the composition of the board and other data, from outside the boardroom, typically from public databases, interviews and surveys. Such approaches have been deemed acceptable because researchers have found it very difficult to enter the boardroom. Given the only place the board and its work actually exists is in the boardroom, and that the board is a social group, surely the gold standard must be to conduct long-term studies of boards in session (through direct and non-participatory observation), as Goodall studied chimpanzees? This issue, of using appropriate techniques that explore the subject of interest, not a proxy, was made plain by an ex-military colleague recently; his pertinent remark was, simply, “The map is not the terrain.” What seems to be the case (on the map) may not be the case (in reality). The underlying message was confronting: if you want to really understand, go there, gain first-hand knowledge. And so it is with board research. If we really want to understand how boards work, and how boards actually make decisions and influence performance, not how directors say they do when they are interviewed, watch them over an extended period. Then, possibly, you might be able discern what happens; how directors act and interact; and, even, spot associations between a strategic decision and some subsequent change in organisational performance. The findings will be contingent, of course, because the group is social, the situation complex, and external influences are many and varied. To date, fewer than a dozen longitudinal observation studies, of boards going about their work, have been published. And, somewhat awkwardly, the reported findings present a different perspective from that commonly asserted by others informed by research conducted away from the boardroom: The capability of directors (what they bring), the activity of the board (what it does), and behaviour (how directors act and interact), appears to be far more important than the structure or composition of the board. Now, as I wait to board a flight, for yet another international trip to work with boards, my colleague’s comment is ringing in my ear. And with it, a question, “What guidance will you rely on, given the importance of governing with impact?”  Have you ever thought about the arc of your career, and how things change over time—not only preferential changes, but societal and technological changes too? My first university degree (a bachelor with first-class honours in computing technology, manufacturing systems and management science) marked me as an engineer, of sorts. But five years into my work career, I was invited to set the programming skills down and to take on a ground breaking project. And I did, and it was good. Sales, leadership and international business development roles followed. Then, in 2001, I stepped away from an executive career having realised a preference to become a consultant or advisor. This, and a post-graduate diploma in business that followed, saw me re-marked, as a social scientist. Most recently, in 2016, I completed a third tranche of study, this time a doctorate, in corporate governance and strategy, to support my passionate interest in helping boards govern with impact and realise organisational potential. Retraining and continuing professional development has been a constant thread through my career since I first graduated from university. Clearly, my professional preferences and interests have moved over the arc of my professional career. And technology has too. Telex machines were de rigueur when I got my first job, but the onset of facsimile machines saw telexes and their operators cast off. Later, email replaced internal and postal mail. The arrival of the Internet, smart phones, and apps changed everything again. Jobs commonplace in 1984 simply do not exist any more, and untold numbers of new job titles have appeared too. Today, humanity stands on the cusp of another change: a transition some say will be transformation, a paradigm shift, in a Kuhnian sense. The emergence of artificial intelligence (AI), and its application to routine tasks (notably but not only administrative and repetitive tasks), portends the demise of a whole swathe of roles, just as jobs entitled telegram runner, mailroom sorter, and telex operator have been consigned to the annals of history. One area where the onset of AI strikes close to home is administrative support for boards: the role of company secretary (or, board secretary)—that role that helps prepare board agendae, record minutes of meetings and ensure various compliance items are attended to. I've been trialling Zoom's AI companion (a meeting recording system), Microsoft Co-pilot and a few other tools to document conversations. The results are astounding. Now, I am wondering whether [human] secretarial support will be required in the boardroom in the near future, for the quality of the outputs from AI tools is already pretty good. Assuming these tools continue to get better, which they will, what of all the people who have trained as board/company secretaries (or the modern moniker, governance professional)? Might these people now be standing at an inflection point, even on the cusp of obsolescence? Or, will boards still need a human to check what is written and what is prepared? I'd really appreciate hearing your thoughts on this, especially company secretaries and governance professionals, for whom the onset of AI has the potential to completely disrupt career choices.
 I have been watching the leaves on a potted plant go a little yellow in recent days. Something is not right; the plant has been suffering, clearly—but why? Had I been over- or under-watering it? Or have I applied the wrong amount of fertiliser? After checking with sources more knowledgeable than me (a book in my library, but also Google), the penny dropped. The plant had become root-bound, a victim of its own success. Simply, the pot had become a constraint. The resolution? A bigger pot, to provide space for the plant to thrive once more. Now, we wait. Boards and companies are analogous to the pot and plant in this illustration. The pot holds the plant and provides space for it to thrive and grow. Sometimes, a new pot is the change needed if the plant is to thrive. And so it is with companies: sometimes changes are needed at the board table to reinvigorate decision-making, steerage and guidance. Whereas plants tend to droop, go yellow or otherwise signal poor health, tell-tale signals that it might to be time to make adjustments in a boardroom tend to be visible too. Examples include:
While this list is far from exhaustive, it is indicative. Notice many of the signals (that a director is out of their depth or no longer fit to serve) tend to be behavioural. But how might any shareholder or supernumerary know the real situation given boards tend to meet and operate behind closed doors? Something might seem to be amiss, but what, and who? A governance assessment (note, not a board evaluation) can be a useful tool to assess the effectiveness of the board and the governance 'system', and to diagnose any underlying problems. These should be conducted annually, by a credible independent assessor. Recommendations emerging from such an assessment need to be taken seriously. Boards that dismiss evidence-based recommendations out of hand, or make cursory adjustments only (the "sweep it under the carpet and hope for the best" tactic), should take a good look in the mirror. The response is itself a clue—defensiveness tends to confirm that all is not well. When something doesn't quite seem right, check it out. Directors serve at the pleasure of shareholders, and replacement is always an option. Often, it is a very good option; sometimes, it is the best option. Normally, a simple majority is all that is required to both appoint and remove a director. To give the director the benefit of the doubt is rarely the best option. Finally, if a decision is taken to remove a director, act on the evidence quickly, but do so quietly.
 Several times in the past year, I have been asked for advice, even to intervene, in situations where relationships between board members have become strained, or shareholders have fallen out—with each other or with board members—over differing expectations around returns and/or succession. Each situation has been both complex and demanding, for they involve people and human emotion. The following vignettes are illustrative of the types of things that can go wrong and the ensuing behaviours of various actors:
As is typical in board and shareholder matters, options are many and resolutions are far from clear cut. What options might a capable independent director consider in such circumstances?
These are questions of commitment and duty. Directors need to not only recognise this, but consider options amidst ambiguity, and work within the constraints of the law and what is ethically acceptable. Essentially, these questions ask how far a director is prepared to travel, how hard they are prepared to work, how long they might prepared to wait before enough is enough. Are they prepared to make decisions that may be unpopular or even unpalatable, because such decisions are in the best interests of the company? Will they go to the ends of the earth, so to speak? Or does the preservation of reputation rank more highly than acting in the best interests of the company—essentially, will they bail when the possibility of reputational damage arises (as several directors of Wynyard Group reportedly did just before the company failed several years ago)? Directors would be well-advised to have asked themselves these questions before they accept an appointment. They should also be prepared to act (step away) if the thresholds they set themselves are surpassed, or if they no longer have the expertise or courage to act. Of the directors you know, how many possess the wisdom and maturity to act diligently, in the best interests of the company?
Boards, and an oft-mentioned but mysterious concept—governance—are topical. Daily, it seems, these terms feature in our newspapers and on social media, usually because something has gone wrong. And when it does, the chattering class is not slow to react. Typically, the targets of their comments are the board and management of the organisation. That seemingly strong organisations suffer significant missteps—or even, fail outright—on a fairly regular basis is worrisome; the societal and economic consequences are not insignificant. What can be done? Recently, the inimitable Mark Banicevich invited me to discuss boardroom success and failure, and to offer guidance that boards wanting to lift their game may wish to consider. Hopefully, our discussion is helpful and enlightening. Regardless, I welcome questions and comments, either here or send me an email. This is my second conversation with Mark (the third will be published in May). If you missed the first, you can access it here: Governance around the world. Recently, I had the great fortune to sit with Mark Banicevich, a business leader, to record a set of three fireside chats for his Governance Bites series. Mark was keen to get my take on several topical aspects of boards and governance. The first of the three conversations is now available to watch. (The second and third conversations in the series will be posted in April and May.) In this conversation, we explored board work in various jurisdictions, noting differences and similarities along the way. While a 20-minute whistle-stop conversation is hardly sufficient to do the task justice, I do hope it encourages you to explore further, and is a catalyst for some conversations. And, may I ask... is the commentary helpful or not? What do you agree or disagree with? I'd be glad to hear your thoughts, either in the comments section below, or directly, if you prefer.  As regular readers know, I read widely; topics I explore span (in addition to core themes of corporate governance and strategy) include philosophy, neuroscience, business, history, military strategy and more besides. I usually take notes, as an aide memoire for later reference. Some articles are memorable, others less so. This one recently-published article piqued my attention because it reminded me of a question I face most weeks: "What do you do?" Most enquirers expect to hear a job title or a profession, to enable them to 'position' me, which is fine if the 'job' is a well-known profession or vocation, such as a doctor, teacher, plumber or lawyer. But what about a director, or an advisor? Is offering a one-word response helpful? Might it enlighten or obfuscate? For those who understand the roles of director and advisor, one-word descriptors are adequate. But for others (the majority, even most?), the response is more likely to an awkward smile, as if to say, "I wonder what one of those is or does? Does he mean a company director, a movie director, an orchestra conductor, or something else?" or, "What is an advisor? It sounds like a fancy name for a consultant." What an unhelpful interaction! Clarity and simplicity are vital if we are to communicate effectively. And the effectiveness of what we utter—whether our message got through—is determined by the listener not the speaker. With this in mind, I try to read the person before answering. If they appear knowledgeable of business matters, I tend to say I work with boards, sometimes adding that I help them see around corners and govern with impact; an advisor. But if not, I say I'm a troubleshooter who works with business leaders, or something along those lines. One thing I never say: I'm a consultant—they are people who make decisions and implement things for others. I don't. Rather, I ask questions to gain insight and make suggestions. Whether the client takes up the advice or not is their decision. So, returning to the headline question. The words we utter: do they matter? Yes, they surely do, if we are to communicate well.
 Recently, I announced the findings of empirical research conducted over an eight year period. The aim of that research was to discover how many boards are fully aligned in relation to corporate purpose. The findings were staggering: five per cent of the participating boards—yes, one in twenty—were completely aligned in relation to corporate purpose. When asked, every director and executive had an answer, but only five boards (out of one hundred and three, to date) had one answer. How can any board do its job (make informed decisions, and provide effective steerage and guidance) if it has not first agreed on an objective (purpose) to work towards? Compare this situation with that of a plant. The example in the picture—echium vulgare, or, more commonly, viper's bugloss or blueweed—is as good as any. Echium vulgare, a native of Europe, is an introduced species in parts of north-eastern North America, south-eastern South America, and New Zealand. The plant is toxic to horses and cattle, but the bright blue flowers are very attractive to bees. And, despite the toxins in the plant, honey produced from the nectar is very tasty indeed! "So what?" you might ask. To compare a board and a plant seems a little odd. Yes, maybe, but please allow me to explain. E. vulgare, like all other plants, has a single purpose, which is to grow and reproduce. All the plant's energies are dedicated to this single goal, using the resources available to it. Nothing more, and nothing less. In contrast, many companies operate without an overarching and enduring goal, as the research mentioned above shows (save to make a profit). And that begs another question: how can any organisation realise its full potential without first establishing a clearly defined and achievable goal? 'Purpose' has become a hot topic in board, shareholder and stakeholder circles. Some have interpreted purpose to mean mission and vision: an overarching goal the company intends to achieve. Others have a different understanding—one that positions the company as a servant of society, as the question below illustrates: How can a company not be in the business of improving human health and making the world a better place? This question, posed by a US-based leadership consultant, positions purpose as a catalyst to influence or resolve an external societal or environmental situation. In effect, the underlying expectation is that the company prioritises something external and, most probably, well beyond the company's means and ability to influence, much less achieve. The difference between the two understandings is stark, as are the implications. Readers will, probably, gravitate towards one or other, and some may hold such strong views as to be offended by 'the other one'. And that is okay; shareholders and the board can strive to achieve whatever they want—such is their prerogative. What matters is that every board takes responsibility for answering the question, of why the company it is charged with governing exists. Essentially, "For what purpose?" Without this, the company will lack a North Star, and efforts to create a meaningful strategy, let alone allocate resources well and achieve high levels of performance, will be fraught. But, if purpose is clearly stated, and agreed and understood by every director and all key staff, the company will not only attain membership of a most desirable club—the Five Percent Club—the board will have established a robust foundation upon which a coherent strategy can be developed, resources allocated, decisions made, and the full potential of the company pursued. And that, I think, is a good thing.
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Dr. Peter Crow, CMInstD
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