Peter Crow
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Reflections, on a most interesting year

20/12/2022

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‘That’ time of the year has arrived once more. For many, the time to put the tools down and relax for a few days is nigh. From the hustle and bustle of public life, families are gathering. Some will celebrate the significance of Christmas, others will celebrate because any opportunity for a party with friends and family is a good one. Amongst it all, some will work on, especially in healthcare, emergency services, process manufacturing, retail and hospitality; we should not forget them for they too have family and friends.
I am one amongst many who carve out a little time and space towards the end of December to reflect on the year gone. Often, my mind is drawn towards relationships and experiences. This year is no exception.
  • The re-emergence of people from the depths of the covid malaise has seen conversations about sustainability (and close cousins climatic change and ESG), stakeholder capitalism, and cyber security return to centre stage. These discussions are important, and boards cannot afford to ignore them. But boards should not be deferential to them either. The role of every board is to provide steerage and guidance, in pursuit of an agreed goal, having carefully assessed and taken into account the wider context within which the organisation operates. This is the craft of board work.
  • The high level of polarisation and discord apparent across communities and nations, and between nations too, is disheartening. I'll not comment further; to do so would mean stepping into politics and nationhood, themes that seem to activate stridency and, at times, conflict. I am ill-equipped to debate the issues with confidence anyway! Regardless of what swirls around, I remain hopeful for the future, that cool heads and calm rational thinking will prevail.
  • Many of the boards and organisational leaders I've spoken with in the past six months are concerned about the effects of geo-political turbulence and economic headwinds. They say they are active in their efforts to distinguish between signal and noise: monitoring  the wider market closely, checking strategic priorities remain fit for purpose and operational plans are on track, and making adjustments where appropriate. Smart boards are also investing in both organisational resilience and themselves.
  • And a personal item, with learnings for board work. An injury sustained in April (comminuted calcaneal fracture) resulted in various post-pandemic plans (notably, fulfilling international engagements) being put on hold. Thankfully, the recovery progressed without complication, although my patience was tested at times. By mid-September, I had sufficient mobility to travel internationally again. Now, nine months on, my shoes and boots fit once more, and I can do most things again, which is wonderful. The experience has provided many lessons, not only for me but also insights for boards and organisations. More on this in 2023 (or, get in touch if you have an immediate need for assistance).
Before signing off this last post for the year, a note of heartfelt thanks. Thank you to everyone who has seen fit to consider my ideas, challenge my thinking, and invite me to work alongside them this year. To have been afforded the opportunity to contribute, globally, has been delightful. The calling, to serve and support boards intent on realising organisational performance, remains strong. Consequently, the work will continue in 2023, starting in early January with responses to a long list of enquiries to assess, advise, coach and speak.
Now, I have one report to complete, a client event to attend, and a few Christmas errands to run. Then, I shall set the tablet and pencil down, in favour of a book or two, my vegetable garden, a few small jobs around the house, and some quality family time.
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Reading through the seasonal break

16/12/2022

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I have the good fortune of meeting many hundreds of people every year—aspirational and established directors, board chairs, executives, journalists, shareholders, MBA students, doctoral candidates, lobbyists, regulators, policy analysts, conference organisers, and more besides. Sometimes, contact is fleeting; sometimes it is enduring, as we work together to gain insight, educate, or tackle a difficult problem.
One question that keeps coming up (besides the big three, namely, what is corporate governance; what is the role of the board; and, how should governance be practiced) is, "How do I stay current and relevant?"
The answer is straightforward. I read, a lot.
Every morning—well, at least six days a week—I dedicate 90 minutes or more, to check newsfeeds, blog posts and emails that have arrived overnight. The primary goal is to ensure I have sufficient awareness to engage well with colleagues and clients on topical matters. Some people call this continuing professional development. I prefer a simpler description: reading to keep up.
This commitment is, I find, a bare minimum because it does not afford space to read widely and think deeply about ideas, perspectives and the human condition. For that, I read books; sometimes in the evenings, but most often on flights and during holiday breaks. Why? Because I have time to think and mark (in pencil in the margin if a physical book, or electronic bookmark if an e-book) specific points to investigate further.
Several people have asked what I'm reading. Here is a list of books either under way or to be read this summer break. Notice only one is directly linked to my board and governance work. That is intentional. Reading widely means, to me, reading beyond normal boundaries to discover new ideas and ways of thinking about things.
This list is a selection of the books awaiting my attention. If you read, I'd love to hear any recommendations!
Enlightenment Now
Steven Pinker
The Matter with Things
Iain McGilchrist
The Evolution of Corporate Governance
Bob Tricker
On Certainty
Ludwig Wittgenstein
SOE (Special Operations Executive)
M. R. D. Foot
Seven Pillars of Wisdom
T. E. Lawrence
Nine Quarters of Jerusalem
Matthew Teller
The Unbroken Thread: Discovering the Wisdom of Tradition in the Age of Chaos
Sohrab Ahmari
South
Sir Ernest Shackleton
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On strategy and governance: Whither to next?

3/11/2021

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As summer gives way to autumn in the Northern Hemisphere—and soon winter—so various externalities that frame the work of boards and enduring performance of companies continue to press in. Topical externalities include climatic change; shifting geo-political forces; technological disruptions; diversity, equity and inclusion demands; ever-increasing levels of regulation; the emergence of ESG; and, stakeholder capitalism.
The challenge for all directors and boards, whether they acknowledge it or not (or even notice or care!), is to respond well in the face of what is patently a dynamic environment—to ensure the fiduciary duty they accepted when agreeing to serve as a director is fulfilled. Steerage and guidance—the essence of corporate governance—requires every director, and the board collectively, to be alert, to both set a course and to respond well in the face of externalities. The mind’s eye needs to be looking ahead, to ensure the reason for the journey remains clear, and that decisions are made in the context of advancing towards the objective. Quite how that should be achieved is the underlying question that has driven my life’s work.
Following an extended break from writing—a consequence of dealing with the passing of our patriarch—I have ‘arrived’ back at my desk to think and write again, about organisational performance, governance, strategy and the craft of board work.
If you have a question, or would like to learn more about a particular aspect of board work or the impact boards can have on organisational performance, please let me know! If we are to journey far, we need to explore relevant topics and learn together.
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Ten #corpgov musings that generated the most discussion in 2015

24/12/2015

 
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The topic of corporate governance—that is, the functioning of the board—has generated much interest in the business community and beyond in 2015. From failures and successes, to emerging ideas and beyond, corporate governance has been front of mind for many throughout the year. Looking back, over 150 articles on corporate governance were added to Musings during the year. Here's a list of ten musings that generated the most discussion in 2015, in no particular order.
  • ​​Insights for boards, from a learned gentleman one Friday afternoon
  • Back to the drawing board: what is corporate governance?
  • Volkswagen emissions problem: portent of a bigger problem?
  • Do boards need to re-conceive control, as a constructive mechanism?
  • The emerging role of the board in business performance
  • ​​Boardroom diversity: is the rhetoric finally starting to mature?
  • Reflections: International Corporate Governance Network conference
  • Martin Wolf at ICGN'15: "Let a hundred flowers bloom"
  • Boardroom authenticity: are director actions consistent with their claims?
  • Qualities of directors and boardroom behaviours that actually make a difference
The top ten #strategy list will be posted on Dec 26.
If you want to discuss any of these postings (or ask a question about a related topic or request assistance), please get in touch. 

Ideas: Reading to relax and recharge for the journey ahead

5/7/2015

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Have you ever arrived at the completion point of a major project, breathing heavily (as it were) having expended much mental and emotional (even physical) energy on the journey, only to find yourself twiddling your thumbs and wondering about the challenges that lie ahead? While some folk are anxious to move on quickly (those defined by busy-ness or a fear of idleness perhaps?), others happily use the time to read—both to relax and to recharge the mind for the journey ahead.
I have been happily working my way(*) through the following books since completing the doctoral dissertation on 1 June. I commend them to you and, if you choose to open the front cover, trust you gain much enjoyment from the experience.

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Why things matter to people, Andrew Sayer.
Sayer shows how social theory and philosophy need to change to reflect the complexity of everyday ethical concerns and the importance that people attach to dignity.

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Akenfield, Ronald Blythe.
This modern classic gives voice to the inhabitants of a rural village in Suffolk, England, was an early and shining example of what an oral history could be.


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Half man, half bike: The life of Eddy Merckx, William Fotheringham.
A biographical narrative of cycling's greatest rider. On the bike, Merckx had an insatiable appetite for victory. Off the bike, he was sensitive and surprisingly anxious.

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Russian Roulette, Giles Milton.
An historical account of how British spies thwarted Lenin's attempts to destroy British India, the intrepid activities of which led to the formation of MI6.

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The price of inequality, Joseph Stiglitz.
Stiglitz discusses the social impacts and causes of inequality, and the economic and political impacts of what appears to be a growing problem.

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The fish rots from the head, Bob Garratt.
Garratt's much acclaimed book, considered a classic by many, clarifies and integrates the roles and tasks of directors, and includes a programme to help them develop the skills and approach required to do their job well.

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To the edge of the world, Christian Wolmar.
A fascinating history of he construction and operation of the trans-Siberian Railway, including its impact on Russian society and relations with neighbours.

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One summer: 1927, Bill Bryson.
A narrative of the reckless optimism and delirious energy that characterised America in the summer of 1927.

(*) This is very much a work-in-progress. As of 4 July, the 'score' is four books down and four to go, and several new research and board practice ideas to boot!
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Is competition always good and are monopolies always "bad"?

24/9/2014

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What a great question. Throughout my business career, of over thirty years now, the prevailing answer has been 'yes'. However, Peter Thiel reckons the answer to both parts of the question is or at least should be 'no'.

Thiel's thesis, that competition is for losers, and this response to it will get you thinking... Boards and regulators might need to take note.
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Thank you for your interest in my work!

31/8/2014

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I'm writing to express gratitude for your interest in my upcoming talk at the British Academy of Management conference. That my research to explain how boards can influence the achievement of company performance outcomes has stimulated such interest, even before it is completed, has amazed me. Thank you. 

My paper will be on presented on Thu 11 September. A copy will be posted here afterwards. If you are planning to attend the conference and would like to meet between sessions, over lunch or in the evening, please contact me via Twitter or email. Also, I'll post summaries and reflections on this blog throughout the BAM conference, to give those that cannot attend an insight into what was discussed. 

To those people that have asked questions about my research: I will send a private reply. To those that have asked about meetings and speaking engagements in London and elsewhere: my schedule is now full (sorry!). However, I will be back in the UK and Europe in November. If you'd like to meet me then, please contact me to make an arrangement.
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Latest #corpgov research sounds great—until you read it

15/8/2014

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For some months now, I have been wrestling with the possibility that corporate governance might not be a structure or a process, but rather a mechanism that is activated by boards in some way. I've been beavering away on this, without seeing much other research activity in the same area—until today, when this release from Penn State arrived. The article referred to corporate governance and mechanisms in the same sentence. Wow! Could this article point to some research along the same lines as my attempts to get to the bottom of what actually happens in boardrooms? Here's the first three paragraphs:
UNIVERSITY PARK, Pa. -- The most effective corporate governance occurs when a mix of complementary mechanisms that include CEO incentive alignment and both internal and external monitoring mechanisms are present, according to a new study from Penn State Smeal College of Business faculty member Vilmos Misangyi and his colleague from the Singapore Management University.

Corporate governance refers to the collection of activities meant to help ensure that executives make the best decisions for shareholder profitability. While much past research has attempted to evaluate the effectiveness of each governance mechanism individually, Misangyi’s study of the S&P 1500 firms instead takes a holistic view of how these activities work in concert to achieve profitability.

The two primary categories of governance mechanisms include incentive alignment and monitoring. Alignment mechanisms incentivize executives to act in the best interest of shareholders through, for example, CEO stock ownership and compensation contingent upon firm performance. Monitoring can occur from both internal and external sources, such as boards of directors and shareholders owning large blocks of equity, respectively.
By the time I got this far—three paragraphs into a nine paragraph release—the wind was gone from my sails. My hopes were dashed. Misangyi and Acharya seem to suggest that effective corporate governance occurs when CEO incentive alignment and monitoring mechanisms are in place. They evaluated two variables (they call them mechanisms) in 1500 firms and described their research as holistic. Interesting. There is a growing body of research that suggests that board's involvement in the development of strategy and in the making of decisions is what matters. Misangyi and Acharya's release makes no mention of anything along these lines, nor is there any suggestion that the researchers directly observed any of the 1500 boards in their study. 

I'm looking forward to reading the full research report when it is published, to see whether this is another study based on secondary data and hypothetico-deductive science, or whether Misangyi and Acharya have discovered a whole new paradigm.
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On corporate governance: circa 2012 and 2014. What's changed?

30/7/2014

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I got a little bit fed-up with writing today, so I decided to read back through Musings, to see how the corporate governance discussion has changed over the last couple of years. Sadly, many of the topics discussed two years ago are still being discussed. Sure, the prevalence of articles about boardroom performance seems to be waxing, and the number of quota-based gender proposals has waned somewhat. That a very similar set of topics is being discussed is a shame. It suggests we are making slow progress. The following muse, originally written in October 2012, illustrates the point fairly well.
Have you noticed the rising tide of news stories about corporate governance in recent months? While some have highlighted the fraudulent behaviours of some boards and directors, most of the articles have focussed on efforts to improve the quality of governance around the world. 

Much of the current discussion is focussed on regulation and diversity. Some regulators, including those in Singapore, believe that good regulatory frameworks are key to investor confidence. Many others, including Hong Kong's Exchange HKEx and noted academic Dr Richard Leblanc, are promoting diversity as a means of improving the quality of governance. I applaud these moves, but question whether regulation and diversity are the variables that will reliably deliver the main goal of good governance: better company performance. Regulation, for example, is a compliance tool not a growth tool. While they provide important safeguards for shareholders and stakeholders, they don't help companies to grow.

My conclusion, having reading hundreds of research reports and peer-reviewed articles, is that behavioural factors, social context and an active involvement in strategic decision-making are far more important than regulatory, structural or composition factors. As such, this is where our efforts to improve governance performance should lie. Ultimately though, the bottom line remains the same. Shareholders—whether professional investors or small business owners—need to know that the board is fulfilling its mandate to maximise company performance. If regulation or diversity helps achieve that, then well and good. If not, then let's move our attention to other factors—quickly—for the good of our economy and society.

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Boards: talking with shareholders is not optional

24/7/2014

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I've been on vacation this week, in Perth, Western Australia, with my wife. One of the things that we enjoy while away is to read newspapers that we wouldn't normally see at home, especially the local newspaper. This routine gives us a different perspective on what's going on in the world at large, which serves to broaden our horizons. I try to get my hands on a print copy of the The Australian when in Australia, and often read online versions of the New York Times and The Times as well. 

The commentary pieces and investigative articles published in major newspapers are often quite thought-provoking—particularly when one is relaxing over a coffee and a muesli breakfast. For example, this article, published in the New York Times today, caught my eye. It highlights the difficulties that investors are having in talking with the boards of the companies they own (or, more correctly, part-own). I was stunned. Why would any director who is serious about their contribution not talk to the people to whom they are responsible and accountable? It smacks of hubris. More importantly, what can be done to remedy this problem?
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Peter Crow PhD CMInstD

Company director | Board advisor
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