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    Taking notice, for context matters

    Accountability Corporate Governance Decision Making Effectiveness Governance Leadership Performance Readings Strategy
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    I like exploring: old towns and villages, and the countryside; enjoying the landscape, clambering along trails and even into river beds to look more closely at flora and fauna. The pictures that form in my mind’s eye provide important context to understand the scene, and what may have gone before. Take the above image for example, a photograph I took a few weeks ago, having stepped off the path while walking towards a disused railway. This seemingly innocuous scene is of a fast flowing river, in a gorge. But more than that, it is just along from an abandoned gold mining settlement and an extraction plant (who knew?), and it has a name: the Ohinemuri River, this section is in the Karangahake Gorge.
    If the picture is studied more closely, details not apparent at first glance can be seen: plants in bloom, logs dumped from an earlier flood event, and an adjacent highway. Some details seem inconsequential, like the red blooming plant, others are far more significant (the river obviously floods from time to time, the gorge ‘hosts’ a major highway).
    Clearly, the act of looking ‘into’ the picture, not simply at it, reveals much. ​
    And so it is with board work: to look beyond what is written in board papers, to consider what is not written, the wider context within which the company operates, and still-weak signals that may portend trends and potential disrupters is crucial, if the board is to secure a more complete understanding and, ultimately, make more informed decisions. While some boards behave as if such things do not matter, effective boards know better. They are alert to both macro trends and issues (this recent report, from INSEAD, offers helpful insight), and more immediate matters such as sales figures, staff engagement and customer satisfaction trends.
    When was the last time you scanned the horizon to understand the wider context within which the company you serve operates, and how long has it been since the board thought deeply about the future, and the various risks and opportunities that might effect the company and its prospects?
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    What lies ahead, in 2025?

    Artificial Intelligence Corporate Governance Effectiveness Governance Tough Questions
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    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:
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    Exploring boards and board work, thrice more

    Accountability Corporate Governance Decision Making Effectiveness Ethics Leadership Performance Sustainability Value Creation
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    One of the most satisfying aspects of my work involves sharing insights gained from 'live' experiences, in the hope they might be of some value to others. Whether it be facilitating a boardroom discussion, advising a chair, delivering a keynote, leading a capability building workshop, or chatting with a colleague, the call to share my knowledge and experience is strong. So, when Mark Banicevich, Founder of Governance Bites, contacted me for a chat, I was agreeable, more so as we had previously explored various aspects of board work (the recordings are available: here, here and here). The topics Mark wanted to explore included boards in crisis situations; ethical dilemmas in governance; and, governance in developing nations. A date was agreed, and the 'record' button was pressed.
    Now, all three of the fireside chats have been published. You can watch them here ⬇️. If you have any questions having watched them, or want to check something out, please feel free to contact me directly.
    Boards in crisis situations:
    Ethical dilemmas in governance:
    ​Governance in developing nations:
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    When AI writes the news

    Artificial Intelligence Corporate Governance Decision Making Governance Management Tough Questions
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    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. The year brought meaningful progress:
    •  Co-founded govern& to serve boards in Baltic region
    •  Joined Editorial Board of Advances in Corporate Governance Journal
    •  Completed significant governance review work for Baptist Union of New Zealand
    •  Expanded influence through international speaking engagements

    Yet the core mission remained constant: helping boards govern with impact.

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    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.
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    Decisions-making, amidst complexity

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    That life is complex and unpredictable is a truism. And, though the frequency and impact may vary, change is a constant, it seems. If one is to thrive (succeed, realise goals) in such an environment, adaption is critical having detected something has changed. To ignore or pay lip-service to change is folly, and to guess how to respond is about as reliable as gambling.
    The same principle applies in organisational and boardroom settings. As in life, some of what is seen, heard or read is reliable, but much is not—to the extent that descriptors such as misinformation and  disinformation have become commonplace, even hackneyed. Consequently, those charged with providing effective steerage and guidance need to be alert, to ensure decisions about how to proceed are underpinned by accurate data from reliable sources, and insights from conversations and analysis.
    Two techniques I have found useful when considering decisions with strategic implications:
    • Take stock: Rarely does anyone have everything needed to make an informed decision off the bat. Acknowledge the existence of gaps. Ask probing questions to try to understand what is going on and bridge the gaps. Test everything (on the assumption that what seems at first to be the case may not be). Hold options lightly. Invoke an advocatus dialboli mindset, to explicitly draw out alternative perspectives. Listen carefully. Draw on prior experience too, for the likelihood of historical experiences being relevant is high.
    • Take time: Rarely does a so-called strategic decision need to be made immediately, despite first appearances and temptations in modern society to be seen to be agility, and to embrace pace and an urgency mindset. Clarify and agree when the decision needs to be made. Agree the pathway to the decision, and what intermediate decisions can be made to de-risk the strategic decision.
    If boards are to make sound decisions, directors need to breathe—to create space and time to consider options well. Boards should also agree on the decision criteria, process and timing at the outset; guard against being drawn into irrelevancies along the way; and, employ a strategic mindset throughout. How does your board measure up in this regard?
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    Bridges: a metaphor

    Accountability Corporate Governance Governance Performance Value Creation
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    I have a thing about bridges. They are, in my mind at least, points of connection: not only between physical locations separated by water or chasm, but also between people, and between seemingly discordant ideas. 
    This week I have been in the United States and Canada: in Chicago, to deliver a keynote at the Private Directors Association national conference, lead two masterclasses and fulfil other engagements; in Toronto, to speak at a Governance Professionals of Canada event and attend other meetings; and, in Knoxville, to catch up with a dear friend of some 45 years and take in some local history.
    In my downtime, I have done as I usually do: sate my curiosity—taking in the local sights, sounds and smells, and getting a sense of the history. From lakes (Michigan and Ontario), rivers (Tennessee) and vistas, to monuments, plaques and people, the social fabric that makes a place, well, a place is plain to see and feel. And, as I walked, I stopped periodically, to ponder those who went before, what they might have thought, and their intentions and actions as they went about their lives.
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    Then, last night, as I enjoyed hospitality in Knoxville, my mind was drawn to a comment my father shared many years ago, “Bridges are made for crossing, not burning.” Now, five decades on, I would add, “Bridges should be built and then crossed.” ​
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    To cross a bridge as it is being built is folly. Not only is this a poor use of resources, the likelihood of arriving at the intended destination is low. But this is what many executive teams and boards seem to do—they work it out as they go, or they assume that someone else has the matter in hand. Sometimes, they are so busy operating that they do not look past the here and now. But that is hardly a sound way to create value or a thriving business that endures over the longer term.
    The role of the board of directors is to govern, meaning to provide effective steerage and guidance. And, one of the four principles of corporate governance is ‘set direction’, meaning, to determine corporate purpose and strategy. And therein lies an awkward bridging question: If a company’s board has not set direction, what hope should the executive have of leading well; or the staff being productive; or, ultimately, of the potential of the company being realised?
    The strategic governance framework is one option boards may wish to consider, as they strive to see around corners and govern with impact.
    PS: For curious readers: The bridges pictured are the Gay Street Bridge in Knoxville, and the Michigan Avenue Bridge in Chicago.