Frank Partnoy posted a great article on the HBR Blog Network today.

I've heard it said many times in business circles that "velocity wins"—meaning the faster we move and the faster we make decisions, the better. Partnoy disagrees. He argues that speed is killing our decisions. If we get caught up in a fast decision cycle, where speed (of decision-making) is everything, we risk making poor decisions and suffering the consequences as a result. Partnoy commended the decision-making framework developed by John Boyd, fighter pilot and military strategist, as a means of improving decision quality. The framework is called OODA (Observe, Orient, Decide, Act).

In my opinion, OODA has considerable applicability in business. Boyd asserted that the ultimate goal is to act fast, but not necessarily first. I agree. Making smart decisions is more important than outright speed.

I agree with Baker and Mowbray. Governance is a socially dynamic phenomenon, with many variables and much complexity. Numerous researchers and practitioners have investigated structural and composition factors over many years. More recently, world-class governance researchers, including Leblanc, Huse and Nicholson, have investigated behavioural and process factors. To date, the research findings have been inconclusive, and causality with performance is yet to be established.

Despite flights of fancy from some commentators, slow progress by researchers, and much frustration all round, the search for a link between governance and company performance is of enormous practical importance. Therefore, efforts to understand the mechanisms within the governance phenomena, and any relationship with company performance, must continue. However, the research agenda much be changed. Attention must move away from consideration of individual characteristics—toward a holistic consideration of governance—if further insights are to be gained and any clear understanding is to be achieved.

My doctoral research efforts attempt to build on Leblanc and Nicholson's work. I plan to use a longitudinal multiple-case study approach (to understand the processes, behaviours and dynamic interactions within the governance system) to focus on the way Boards make decisions. Strategic decision-making has been postulated to be an important factor in the governance–performance relationship. If this is correct, a link between a strategic decisions and subsequent improved company performance should be apparent, after some longitudinal delay. The challenge will be to determine whether or not strategic decision-making can be attributed to the Board.

So where does this leave us? I certainly don't have any silver bullets, and progress is likely to be frustratingly slow. Boardroom diversity is important, however I suspect a focus on decision-making and related factors will reveal more about board performance than arguments about the number of women at the board table. Let's push on.

Gender reporting is a good move in my opinion—albeit a very small one because companies already report the names of their directors in their annual reports. A reporting system is a far better option than a quota system. Quota systems run the very real risk of tokenism and making-up-the-numbers, neither of which contribute to effective governance. In contrast, a reporting system will simply make the composition of boards plain. I'm hoping it will improve governance effectiveness and ultimately company performance. Time will tell.

No doubt the move will also provide a platform for lobby groups to exert pressure where they see fit. It will be interesting to see what develops in the 2013 reporting season and beyond!

Why do seemingly successful companies choose to diversify and, in doing so, put their future success at serious risk? The latest is a long line of companies to expand their reach is Dell. This week, with their acquisition of Quest Software, Dell made the move from being a hardware company (they make computer systems), to being a hardware and software company.

On the surface, this looks like a good move. But when one looks at history, I'm not so sure. The sustaining of high performance over time is hard. When Zook and Rogers surveyed 2000 companies, they found just 10% sustained profitable growth continuously through the first decade of the new millennium. That's right, just 10%. They identified three characteristics that were common to the successful companies. Profitable companies reduced the scope of their business (Dell has just expanded theirs); they looked for profitable opportunities within their core business boundaries; and, they set high performance targets. So, with this insight, why would any company complicate its business as Dell has just chosen to do? 

What role should a Board of Directors play in the development of strategy? I've heard many responses when I've asked this question—ranging from "rubber stamp the CEO's plan" through to "actively create and implement the strategy".

The best answer lies between these extremes. The Board should be fully involved with the development of the strategy and oversight of execution, but it should not become involved with implementation because that is the job of management (the Board should "create, decide and monitor" but not "do"). There seems to be widespread agreement amongst researchers that this level of involvement is appropriate, and importantly, that this level of involvement is associated with good company performance. And it makes sense—after all, the Board (not the CEO) is ultimately responsible for the performance of the organisation. Given this argument, why do so many Boards steadfastly remain passive when it comes to the development strategy? They are doing their companies and their shareholders a gross disservice.