I arrived in London yesterday, ahead of what promises to be an interesting week. Formal commitments include delivery of the CBiS seminar in Coventry; planning for a future board research initiative; and a miscellany of meetings in which corporate governance, effective board practice and this recent article will be discussed. Two recent events, Carillion's fall from grace, and the now-public machinations at the Institute of Directors (which have resulted in the resignations of the chairman, Lady Barbara Judge, and deputy, Ken Olisa), are likely to invigorate discussions. Already, I've been asked to comment publicly on the Institute's troubles.
The problems at the Institute of Directors in particular are troubling. They strike at the heart of what many say is wrong with boards and corporate governance; the Institute becoming a laughing stock in some quarters. The Institute's effectiveness as a professional body is contingent on it being the epitome of good board practice. The IoD chief executive, Stephen Martin, said on Friday that the resignations are a victory for good governance. They are not. Rather, they are an indictment of poor governance.
Sadly, the Carillion and Institute of Directors cases are not unique. They are but two of many examples of poor practice that reinforce perceptions that boards are not effective. The ancient Chinese saying (more correctly, curse) seems especially applicable just now.
If trust and confidence is to be restored, the power games, hubris and ineptitude apparent in some boardrooms need to be rectified. Flawed understandings of what corporate governance is and how it should be practiced also need to be corrected, especially the misguided belief that any particular board structure or composition is a reliable predictor of firm performance (the following letter highlights the conventional wisdom problem).
The scene is set for some fascinating discussions this week. I'll let you know how I get on.
Thoughts on corporate governance, strategy and the craft of board work; our place in the world; and, other things that catch my attention.