Tags

  • Published on

    ECMLG2014: Boards and private SMEs—beyond "one form fits all"

    Wafa Khlif (Toulouse Business School, Barcelona, Spain), led an interesting discussion which examined the diversity of board configurations of SMEs based on their task performance. She commenced by identifying characteristics of SMEs, and used a two-dimensional model based on owner proximity, director proximity and manager proximity. Using the analysis of SME data from 186 French companies, Khlif and her colleagues identified four important tasks of boards (performance oversight, leadership assessment, strategy role, service role) and as many as nine states of boards ranging from legal fiction, through coach and watchdog and up to a full-functioning board (that might behave in a manner not dissimilar to the board of a publicly listed firm).
    Khlif's conclusion was that a diversity of board portfolios is a reality in private SMEs, and that SME boards may move 'up' or 'down' what is, in effect, a continuum of states depending on the prevailing context that any given SME board may find itself at any given time. The challenge for SMEs is to identify the state that is most relevant to the current context, and to govern and to lead effectively accordingly. Boards need to correctly and realistically assess themselves, in terms of current state and effectiveness—neither of which is straightforward! I can see many possibilities for an insightful piece of research to emerge from the intersection of Khlif's work with Pearse's work and some direct observations of boards in action.
  • Published on

    ECMLG2014: Family businesses and international growth

    Conferences Governance Performance Research
    Mariasole Banno (University of Trento, Italy) presented a very interesting paper on the approaches taken by family businesses to international growth. Her research explored whether family businesses tend to enter foreign markets through greenfield investment or acquisition (so-called establishment mode), or through wholly owned subsidiaries or joint venture (so-called entry mode).
    The research was important because family businesses dominate the commercial marketplace, particularly the SME sector. Banno analysed data from 1571 foreign direct investments of family-owned Italian firms. She discovered that the share of family ownership appears to be an important influence on behaviour on the decisions made by the board of directors as they execute international growth strategies. More specifically, boards of directors controlled by family owners tend to favour the greenfield investment approach (establishment mode) when seeking to grow beyond the national border, even through a joint venture or shared ownership mode might enable faster or stronger growth. Banno noted that families with influential younger successors seem to be more open to exploratory or joint-ventured modes of international growth, which suggests risk appetite might be an important factor in strategic decision-making. However, this would require a more extensive data set, and a longer term view of performance.
  • Published on

    ECMLG2014: Service as a required leadership competency

    Conferences Leadership Performance Research Societal Wellbeing
    Noel Pearse, of the Rhodes Business School, Grahamstown, South Africa, presented the next chapter in what is rapidly becoming his magnum opus.  I first met Noel twelve months ago, in Vienna, when he presented a paper on servant leadership. This year, he spoke on service as a specific leadership competency. 
    Thinking of leaders and followers, most people understand that an important role of the follower is to serve. In a business context, that means to serve other colleagues; managers; and, customers. The same people would probably suggest that leaders are to be followed and, by implication, to be served. However, emerging leadership trends provide an interesting juxtaposition, whereby leadership responsibility is being distributed; so-called celebrity leadership status is being rejected; and,  ethical leadership is becoming increasingly valued. Further, servant leadership is quite common in high-performance organisations.
    With this background, Pearse posed an interesting question: whether service is actually a required leadership competency. Building on the seminal work of Boyatzis (1982) which identified attributes and competencies of effective leaders, he asked whether certain underlying attributes (my phrase, not Pearse's) are necessary. I was fascinated by Pearse's work—still at a theoretical stage—because it appears to bisect my work on underlying personal qualities of effective effective directors as they seek to exert influence in the boardroom. We plan to stay on stay in touch.
  • Published on

    ECMLG2014: Perceptions of board effectiveness and influence on performance

    Conferences Governance Management Performance Research
    Denis Mowbray (New Zealand) reported the results of his research into perceptions of the board's effectiveness and its influence on organisational performance. He surveyed the directors and executives, and analysed the financial performance, of publicly-listed companies in Australia and New Zealand; and he analysed the data using something called fuzzy-set qualitative comparative analysis (fsQCA). This tool is useful for understanding the influence of particular variables and attributes being investigated.
    Mowbray's noted—correctly—that because boards are constructions of people and that effectiveness is likely to be dependent on how well directors and managers work together. Important elements appear to include intellectual capital, team effectiveness, knowledge sourcing and the leader-manager exchange. However, there is a distinct lack of evidence supporting how boards exert influence, even though effectiveness appears to be dependent on the board exercising control and service tasks. High levels of synergy, trust and confidence—between the board and the managers—also appear to be important. Notwithstanding these observations, the perception of the board's effectiveness appears to be related, in some way, on the current performance of the company being governed:
    • When company performance is high, the perception of the board's view of its own effectiveness and of the manager's view of the board's effectiveness is closely aligned
    • when company performance is low, the perception of the board's view of its own effectiveness and the manager's view of the board's effectiveness is poorly aligned
    Mowbray's insight was interesting, in that it identified an interesting disparity between the board's perception of its own effectiveness, and the executive's perception of board effectiveness, when company performance is poor. However, while some contributing factors were identified, no suggestions as to why the disparate views exist were proffered. The subject of Mowbray's work is important to our understanding of how boards contribute. I hope he and others pick up on the good start made by this paper, because we need to understand how if and how boards can actually influence the achievement of company performance outcomes.
  • Published on

    ECMLG2014: Opening Keynote

    Zelijko Trezner, a leading tourism expert and part-time academic at VERN' University of Applied Sciences, opened the conference by exploring management, leadership and governance in the context of tourism. The area of tourism is rapidly growing (estimates suggest there will be 1.8B tourist arrivals globally per annum by 2030) and changing. The expectations are moving from sight, touch and smell, to 'experience'. The trend is towards specialisation and hyper-segmentation, to offer something different and specific to every tourist: the market of one is nigh.
    The democratisation of information, expedited by the Internet, means tourist and tourism expectations are changing. The primary emerging needs are social—including exploration; change; entertainment; success; love; and, social conformism. To be successful in these regards, the emphasis needs to move from 'physical' sights to 'stories' and 'experiences'. Increasingly, tourists are expecting to engage. What are the implications for managers, leaders and governors? Those with influence need to embrace the following dimensions:
    • To move from standardised systems and processes, to flexible engagement
    • To embrace 'co-creation', an interaction between tourism designers and tourists to craft meaningful experiences
    • To move from seeing things (in a packaged way) to sharing ideas and stories (to learning together)
    Trezner, in effect, was saying the the 'control' needs to move, from the operator to the tourist themselves. A different level of consciousness is required, whereby tourists, operators and decision-makers influence each other on all sorts of levels: Trezner called this transmodernism. 
    Trezner's talk provided a great foundation for the conference because it gave delegates much to ponder.
  • Published on

    ECMLG 2014: Welcome function tonight, sessions from Thursday morning

    Conferences Governance Leadership Management Phd Research
    The 10th European Conference on Management Leadership and Governance starts tonight with a welcome function for delegates. This year the conference is being hosted by VERN' University, in Zagreb, Croatia. I am rested after the long flight from New Zealand via London, and am looking forward to hearing about the latest developments in management, leadership and corporate governance research over the next two days. 
    Please check back regularly if you are interested in the discussion. I will post session summaries here during the conference, and use the #ECMLG2014 hashtag on Twitter to announce new postings. The full conference programme is available here. If you are interested in a particular session, please let me know and I will do my best to attend and report on it for you.