|
Do founder-led businesses always need governance, as many consultants, advisors, and governance professionals assert? My response is straightforward: It depends. If, for example, the founder owns all the shares of the company, and is the only director, and runs the business day-to-day, then probably not. But, if the founder wants to grow the company further, and/or they do not want to make all the decisions themselves, and/or they lack some expertise to make good decisions, then it can make sense to gather some people around, appoint them as directors, and get the basics (of corporate governance) underway. I made the comments recently, during a wide-ranging conversation with Charlie Meaden, CEO of eccuity. If you would like to know where our 35-minute conversation went, grab a coffee and listen in. And, if you have any questions or feedback (critical or otherwise), do get in touch. I would be glad to hear from you.
0 Comments
 The end of 2025 is nigh, which means that time of the year when many folk take stock and ponder the future is upon us. Some people use the time to scrutinise the year past closely and make resolutions, some pause and ponder, and others hardly blink. While the idea of New Year resolutions leaves me cold, I do think about my quest to become a better person. And, with it, I usually select a few books to read during the year ahead. For me, reading—typically, long-form books (hard copy, not on-screen)—is a valuable means of relaxing, reflecting, refuelling, and exercising my cognition. If the insights gained are useful in my work-life as well, that is a bonus. This year, I have selected six books from my shelf, to tackle alongside a slow-reading project:
My slow-reading project? Tolstoy's War and Peace. I intend to read one chapter a day, for 366 days. If you read, would you mind sharing what you have ahead of you, to inform my future choices?
 Today, Friday 19 December 2025, is—unless an unexpected call or email arrives—my last full work-day for 2025. So, with that, a few thanks are in order. Throughout 2025, I have had the good fortune to meet many people, on five continents—some well-known, others less so. And in so doing, I have listened, learned, been inspired by stories told, asked questions, and, I hope, become more well informed. Thank you for investing your energy in me. The pictures below provide a glimpse into the places, people and interactions I have been privileged to experience in 2025. Many other interactions took place too, but they were private and cannot be shared. Now, and for the next couple of weeks, I shall turn my mind to reading(*) and relaxing, family, and tending my vegetable garden. (*) Watch for a separate muse, to be posted on Monday 22 December, which will include the titles of the books I intend to read over the Christmas and summer break, and into 2026.  Vilnius, Lithuania  London, UK; Port of Spain, Trinidad and Tobago; Tauranga, New Zealand—from home office (!)  Singapore, Singapore  Tauranga, New Zealand  New York, United States of America  Cape Town, South Africa  Singapore, Singapore  Auckland, New Zealand  Singapore, Singapore  Johannesburg, South Africa  Boston, United States of America
 Have you ever stopped to wonder why so many companies fail to realise the potential they aspire to? When I speak with directors, the desire to operate at high levels of performance is palpable. In my experience, most say they aspire to have a great impact. But when one looks more closely, a great many boards struggle to break the shackles of average: they are constrained by confusion over the role of the board, impaired by dysfunction within the boardroom, and/or expectations are misaligned. A recent survey (conducted by PwC) highlights the characteristics of high-performing boards:
This is quite a list! Yes, it is. But most of these characteristics are consistent with the findings from ground-breaking board research conducted over a decade ago. That research concluded that if the board is to have any impact beyond the boardroom (especially on firm performance), three things matter:
Board structure and composition is relatively less important, to the point of being insignificant. This finding (now known as the Strategic Governance Framework, see this article for a summary) emerged from a peer-reviewed long-term observation study of boards going about their work—one of a small handful conducted to date. As with studies conducted by the late Jane Goodall, my study sought to get as close as possible to the subject of interest (the board) to observe them in their 'native' habitat. That meant direct observations, for the board only exists when the directors meet. Since that time, the Strategic Governance Framework has shown itself to be a useful mechanism to help ambitious boards move beyond orthodoxy and box-ticking, to realise organisational potential. But the embrace of such a mechanism is not without its challenges: it means stepping away from the perceived safety of 'best practice' recommendations—a daunting prospect of some. Ultimately, boards must decide: is compliance with contemporary recommendations, codes and regulations sufficient to discharge duties owed, or is more required? For those who decide more is required, the Strategic Governance Framework may be worthy of consideration.
 Over the years since it was founded by Marc Randolph and Reed Hastings (in 1997), Netflix has been at the forefront of entertainment and innovation. Initially a rental service, the company introduced a streaming option in 2007 and, as they say, the rest is history. The company has also garnered attention for its innovative approach to corporate governance—one based on proximity more so than distance. I wrote about it several years ago. The approach, founded on governance by walking about and pragmatic reports, ensured directors were adequately informed to make smart decisions. But that was then. Now, eight years on, things have changed somewhat. Jay Hoag, a venture capital investor, was voted off the board recently, after pressure was applied by Institutional Shareholder Services, a data analytics and proxy advisory firm. It turns out Hoag missed three quarters of the board and committee meetings he should have attended. Given the Netflix board usually meets quarterly, it follows that Hoag attended once per year. Quite how anyone can contribute well if they don't attend meetings, is beyond comprehension. That shareholders have taken a stand on the matter is laudable. Well done ISS, for bringing Hoag's absenteeism to the attention of shareholders. But other questions remain:
If boards are to have any hope of governing with impact, all of the directors need to be appropriately engaged (capable and present). Ideally, the board should adopt a robust governance framework too, to expedite effective steerage and guidance. How does your board stack up in this regard?
 When was the last time you stopped and thought about your work, your contribution and the value you offer others? Are you adding value, or simply occupying space? Most leaders say taking time for self-reflection and to think is important, if high performance is to be sustained. But many do not follow through. Instead, they remain 'on': making lists, completing tasks, checking emails, and responding to social media feeds—all in the name of getting things done. Some even speak, proudly, of workaholism and busyness. Such behaviour is lauded in many modern societies. But is 'always on' and busyness conducive to high performance? Or is it a delusion? What of personal and professional relationships; of curiosity; of gaining new insights; of becoming a better person? Allocating uninterrupted time—white space—for reflection, thinking and dreaming is critical if organisational leaders (especially board directors!) are to have any hope of contributing well. The idea of dedicated white space was an anathema for me through the first half of my career. But as I got underway with my doctoral research (circa 2012), something changed. Gradually, the guilt I felt when stepping away from my desk when I was stuck subsided: the act of changing neural activity (from sitting staring at a problem, to going for a walk or riding my bike) often had the effect of helping clear the mental block I had been struggling with! Since completing my doctoral research in 2016, I continued to prioritise white space, as follows:
None of this makes me good, or any better than anyone else. However, my dedication to allocating white spaces and holding them sacrosanct has seen me become more curious. My mind seems to have become more malleable too. Hopefully, my contributions have become more valuable as a result—but this is best assessed by others, not me. Does the idea of white space resonate for you? If so, would you mind sharing your experiences, so others can benefit from them?
 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.
 I had the good fortune to catch-up with a dear friend and professional associate yesterday; someone I have not had the chance to interact with for nearly nine months. Tony and I chatted about all manner of things: his new barn (read: man cave and office); our exploits with Rosa (read: 1951 MG Y-type); geopolitics; ChatGPT; and more besides. What was fascinating was that we both found ourselves chatting as if the last time we spoke was yesterday. Before we knew it, some 75 minutes had passed by. My father told me that this is a good thing; a sign of true friendship. One aspect of our conversation that piqued my attention was Tony’s investigations around artificial intelligence and board reports—or, more specifically, his application of large language model tools to discern and make sense of board reports. The rapid progress over the past twelve months is a sight to behold. Tony summarised his experiments and findings. Did you know that if you feed ChatGPT a set of board papers and ask it to summarise the key points, including nuances and appropriate questions to ask in a board meeting, the likelihood of the responses being both insightful and relevant is high? You can also use it to discern whether directors have read and understood the board papers! I have been a sceptic about the application of AI tools for some time but, on the strength of what was outlined, I’m ready to believe ChatGPT (or Claude, or other) can be a real boon for directors struggling to make sense of large data sets. While context eludes ChatGPT (and all other LLMs), and meaning and reasoning too, the direction and pace of travel seems to be reasonable. Certainly, progress is rapid. I went to bed after our call pondering a plethora of options, including whether board directors might be supplanted by machinery in future. Of this, I am doubtful. But where LLMs could be quite valuable is to distinguish between lights in the distance: those that are sunlight at the of the tunnel, and those that are a train heading towards me at great speed. And so, with 2025 underway, is your board ready for what lies ahead? Can it, for example, confidently distinguish between [sun]light at the end of the tunnel and a train headlight? Has it carefully considered options having read widely, invoked various tools including AI tools and debated options; or, does it remain reliant on what management feeds up in the board report? To rely on management reports as the sole source of ‘truth’ is not smart; it never has been. PS: this is Rosa:   Today is the last day of 2024, the day many people reflect on the year gone and ponder what might lie ahead. Everything from checking off goals set twelve months earlier, to setting goals and resolutions for the year ahead. I am amongst those who 'reflect and set' around this time of the year. Normally, the exercise involves reading back through notes and notebooks, and pondering goals. This year, I asked for help; not help from anyone who knows me really well, but from a newly-released LinkedIn feature, Coauthor. This is what Coauthor, an AI tool, curated, in both textual and info-graphical form: What happens when a board advisor steps into new territories while staying true to core principles? 2024 showed me. The year brought significant evolution in how I serve boards and directors, particularly through co-founding govern& with Jurate Stanisauskiene to help boards in the Baltics achieve sustainable outcomes.  While I may not have highlighted these specifics 'by hand', the general tenor of the summation by Coauthor is pretty good—save one word: expert. While my record implies a level expertise in several areas, I make no claim to be an expert director, expert advisor or even a governance expert. To use 'expert' in this way is, I think, self-aggrandisement. I am, straightforwardly, someone with a deep interest in the performance of organisations and the contributions of boards of directors. So far, so good. But what of the future? How does AI do when looking ahead? What does Coauthor have to say in relation to 2025? This: govern& will expand its impact in the Baltics while I continue advancing thought leadership in corporate governance. The focus remains helping boards see around corners and make decisions that drive sustainable outcomes. This is a reasonable attempt, as far as it goes. What Coauthor does not, and cannot, 'know' is what sits in the wings, much less how other as yet unknown factors might influence me in 2025. My intent to finish writing Boardcraft: The art of governing with impact is not mentioned, nor is a significant initiative to support boards in several developing nations, or speaking engagements at conferences in New York and Milan. And therein lies a critical limitation. When AI writes the news, it can but summarise the past. And, generally, speaking, it does this very well. Making statements about what might lie ahead is much more difficult; anything requiring mimicry of human traits—such as intuition, reasoning, sense-making and undeclared preferences—are beyond its capabilities. Boards need to bear this in mind when considering if, how and where AI might 'fit' when considering strategic options. AI can be an incredibly powerful enabler, and its application to drive efficiencies and expose new sources of competitive advantage should be explored. But, great caution is needed: as attractive as the outputs from LLM models appear to be, their predictive power beyond the next word, or ability to credibly simulate social traits, is rather more limited. Regardless, thank you for your supporting 2024, and best wishes for what lies ahead in 2025.
 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?” |
SearchMusingsThoughts on corporate governance, strategy and boardcraft; our place in the world; and other topics that catch my attention. 
Categories
All
Archives
April 2026
|
|
Dr. Peter Crow, CMInstD
|
© Copyright 2001-2026 | Terms of use & privacy
|