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    You cannot comply your way to great outcomes

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    I am the son of a dairy farmer, a grandson of two (dairy farmers); a father of three adult children (none of whom have any interest in farming), and a grandfather of one grandson. I was born in a seemingly simpler time, before JFK’s audacious challenge: "We choose to go to the moon." While the natural path was to follow those who had gone before me, I discovered technology and business, and left the farm—my innate curious had me off on another path.

    Today, I wear several hats in my work-life: I have had the good fortune to serve on the boards of over 20 private and family businesses and social enterprises; advise and educate thousands of boards, chairs, regulators and governments on five continents; delivered hundreds of keynotes and talks on stages large and small; and, quietly, study boards and how they work. 

    None of this makes me special. But it has made me who I am. 

    In my work-life, now spanning four decades, I have noticed a few oddities, some of which have exercised my wee grey cells deep into the evenings:

    • While most directors are well-intentioned, some are downright lazy. Why is this so?
    • One in  six directors understands the business of the business they are charged with governing. Worse, only one in twenty boards are united as one when it comes to the purpose of the business, the reason it exists. This being the case, how can any board do its job if directors don’t know what their job is?
    • Conceptions of what corporate governance is vary, widely, despite a definition being offered Richard Eells, who coined the term in 1960. He said corporate governance describes the structure and functioning of the corporate polity (the board). Cadbury's refinement (1992) “the means by which companies are directed and controlled” made the performance and compliance aspects of every board's work explicit. Given these perfectly adequate definitions, why do some many academics, consultants and others continue to propose new definitions?
    • Many people and organisations have over the decades proposed and pursued best practice recommendations, corporate governance codes, and compliance measures, in the hope of better outcomes. Considerable effort has been applied. that is clear—but for what effect?
    • In life, you cannot comply your way to great outcomes. If you want better, you gotta do better things better, n'est-ce pas? I have concluded that boards are no different—and that if boards are to have any hope of governing with impact, they first have to understand what governance is, and work out how to put their understanding into practice having taken into account prevailing circumstances.
    • Because boards are social, the key to great outcomes is likely to be (social) as well. If values, culture, and behaviour matter more than structure and regulation, why do structural recommendations and 'regulation first' approaches continue to dominate the discourse?

    I have been told I'm an outlier on some matters. That may be, but am I the only person who thinks like this?

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    Learning from our experiences

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    In these first few days of June, I have been pondering the photographs I took in May (together, my Mundane May project). My motive was plain: to photograph a scene or object each day in May, post the images with an open mind, and see what happens.

    The exercise was a test of sorts, to see whether I could establish and sustain a new rhythm, without preëmpting what might emerge. My hope was that I would become more observant, especially of things and situations in the periphery or out of sight. That was realised. But, I seem to have become a little more patient as well; my innate curiosity, which has languished in recent times, has been rekindled too. All of this is gratifying.

    Then, yesterday, a postscript emerged. While cataloguing the final few photographs, I looked at some older images. One, captured in October 2023, seemed to levitate over the screen. I stared at it for quite a while, and let my thoughts wander.

    The photograph captured one section of the Rococo library, which is located in the Abbey of Saint Gall. The library is the oldest in Switzerland and one of the oldest monastic libraries in the world. It houses over 170,000 religious documents, many of which are over one thousand years old. Several artworks are displayed too, and a sarcophagus to boot.

    Staring at the picture reminded me of time spent on the parquet flooring, exercising my senses in the company of my dear friend, Riccardo (from Lisboa). I was inspired awe-struck by it all. As we moved about that day, quietly, and studied various items and explanatory notes, many questions came to mind. What might the authors have been thinking when they wrote, what did they eat, and who were their patrons? Did they ever dream their contributions might still be preserved hundreds of years later?

    Recalling that visit to Rococo helped encapsulate my thoughts about the Mundane May project: We know far less than we think we do.

    At first contact, it is easy to draw conclusions, especially if quantitative data is available. But these are often an illusion. As we think more deeply, we realise the world around us is dynamic; things change, often in unpredictable ways. Understanding in such situations relies on reasoning, intuition, and judgement. And, for that, qualitative data is necessary.

    Indeed, what seems to be so at first may not actually be so.

    Context matters.

    The parallels with board work are stark. If I have learned one thing in the past 25 years serving as a director and advising boards, it is this: look beyond what can be seen, and hold options lightly. Validate what is reported. Strive to fill gaps by asking good questions and listening intently to the responses—before making a decision.

    That none of us knows it all should be self-evident. That being the case, why do so many leaders, directors, and consultants continue to assert deterministic answers, best practice models, and 'ideal' structures, as if they exist and acting on them will deliver a prescribed outcome?

    Wittgenstein's maxim is ringing in my ears.

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    Riccardo and me, chatting on a bench seat at the St. Gallen station, awaiting the train to Zurich.

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    Mundane May: Autumn hues

    May 24th–31st: As Autumn sets in, a new palette of colours becomes dominant.

    May 24th: making a bold [mauve] statement.

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    May 25th: Deciduous conifers painting a [rusty] calm

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    May 26th: A sanctuary, to enjoy the vista, quietly.

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    May 27th: These feet are made for walking. Thanks Merrell.

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    May 28th: Framing Fall (as in, Autumn 😎)

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    May 29th: bureau sans frontières

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    May 30th: Before the trail fades... AKL–SCL from below.

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    May 31st: In the end, we all return to the ground.

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    Now, the 31 days of May have passed. My project, Mundane May, is complete. The idea was simple: Take a photograph of an object or scene every day in May—nothing special or flashy—post them with an open mind and see what happens.

    • What did I observe?
    • What did learn?
    • Am I any different as a person?

    Watch for a new muse, with my reflections, on these and other questions, sometime in the next seven days.

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    Mundane May: NZST, all week

    May 17th–23rd: Familiar territory—living on the land of the long white cloud.

    To see earlier pictures: May 1st–2nd, May 3rd–9th, May 10–16th.

    May 17: Left, only.

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    May 18: Announcing one’s arrival.

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    May 19: Afternoon [de]light

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    May 20: An early-morning chauffeur-ride to client engagements, for the third day in a row.

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    May 21: Autumnal hues

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    May 22: Ah, those long white clouds…

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    May 23: What picture are you in: Life? Work? Play?

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    Mundane May: half-time

    May 10–16th: Life on the road, in a proud republic.

    To see earlier pictures: May 1st–2nd, May 3rd–9th.

    May 10: Rush hour… late morning in autumnal Melrose Estate

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    May 11: Watching or hiding—or both?

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    May 12: Growing ambitions.

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    May 13: Up or down?

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    May 14: Uber travel, for point-to-point movements.

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    May 15: Move—yes, but what, where, and when?

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    May 16: A colourful interlude, en route home.

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    Is what you see what it is?

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    I have been based in Johannesburg this week, working with boards and directors in both South Africa and neighbouring countries. What has struck me is their entrepreneurial spirit: their ambition to realise the full potential of the companies they govern. That most are looking beyond compliance-based orthodoxy, for clues to help them get ahead, has been refreshing.

    While conversations have been wide-ranging—from board structures and compositions, to enquiries about the Strategic Governance Framework, corporate governance codes, board pack designs and board meeting frequency—one topic has stood out: artificial intelligence.

    On AI, everyone wants in it seems, but not necessarily to deploy AI tools and agents directly in the boardroom (although some are). Instead, having heard of my involvement with AI since 1984 (I studied the topic and built an ‘engine’ at university), they wanted to hear my perspective on several macro issues—especially how companies might gain, and possibly even sustain, competitive advantage.

    My responses to directors have been fairly candid:

    • Maintain an open mind.
    • Technical advances are racing along. What was bleeding edge yesterday, may well be mainstream soon, or even passé.
    • Don’t try to become an expert—learn to ask great questions of experts.
    • Ensure projects that incorporate AI tools are tested against corporate strategy for alignment. A good question to ask is something like, “How will this project advance our strategic ambitions?”
    • The business case to secure efficiencies and improve effectiveness within business operations, and in the preparation of board reports and administration of board materials, is fairly strong.
    • Encourage staff to try stuff, but in your capacity as a director, be vigilant. Ensure the outputs produced by the AI tools (agents) being trialled are reliable and consistent before committing capital. If reliability is questionable, the likelihood of the board making high-quality decisions is low.
    • Judgement, reasoning and intuition remain, exclusively, human capabilities.
    • Any policies developed need to be policies, not procedures dressed as policy.
    • Be cautious of inflated claims and overzealous consultants and sales people!

    The appeal is great, but so is the hype, so keep Wittgenstein’s aphorism close:

    From it seeming to me—or to everyone—to be so, it doesn’t follow that it is so.

    These are my thoughts, this week. As I listen, read, and learn, I may change my mind. How do you see the so-called ‘AI-opportunity’ emerging?