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    The important role of company secretary: Changing times?

    Accountability Corporate Governance Decision Making Effectiveness
    The company secretary, a role defined in law in most jurisdictions, is an important actor in company boardrooms; a servant of the board with a mandate to ensure the smooth running of the board and its activities. Specific tasks include supporting the chair and chief executive in assembling board documentation; ensuring effective communications between key actors and external parties; recording and publishing minutes of meetings; and providing process support to the board as and when needed. Such a role seems clear.
    But in recent times, company secretaries have assumed greater roles including speaking at meetings; exerting influence over decision-making processes, even to the point of presenting papers; and speaking for the board in the market square. This has been encouraged by associations representing company secretaries with the term 'governance professional'. Times are changing, for sure, but are these developments sound? Most of the contributions listed here come dangerously close to the secretary acting, or being seen to act, as a director. 
    But the company secretary is not a director.
    Rightly understood, the role of board secretary should—indeed must—remain one of servant to the board, not part of the board. If governance is a profession (a debatable point, given almost anyone can be a director and professional standards are not enforced), then it is directors not secretaries who are the rightful claimants of the title 'governance professional'. Some other questions boards may wish to consider are:
    • ​The company secretary's modus operandi needs to founded on service, discretion and trust, not power. Is this reasonable, or do you disagree? 
    • How does your board secretary actually operate? How should they?​​
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    Will board effectiveness improve in 2019?

    Accountability Corporate Governance Decision Making Effectiveness Governance Leadership Performance Value Creation
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    With 2018 consigned to history and holiday season break all but over, most business leaders and boards of directors are turning their attention to what the year ahead (and beyond) holds. Even a cursory glance reveals a plethora of issues that may have an impact on business continuity and, potentially, continuance. 
    Consider these indicators:
    • ​Rampant economies that have powered much of the global growth over the last decade may be running out of steam. Many Asian 'tiger' economies are growing less rapidly than before, Apple and other tech giants have issued warnings, indicating that a correction may be just around the corner.
    • Populism and nationalism are no longer words heard only in political and academic hallways.
    • The climate is changing.
    • Medical and social developments are impacting the lives of untold millions around the world.
    • Disruptive technologies and business models are fundamentally changing commerce.
    • Weaponising of biological 'forces' to reshape nations, economies and mindsets.
    • March 29, 2019 is shaping as a watershed date for Britons and Europeans in particular, but also others.
    • The US-China trade war and disquiet in the Middle East have the potential to disrupt international trade.
    • The emergence and potential impact of identity politics and various lobby movements (#MeToo and #GilletsJaune are two examples amongst many).
    • In several countries, general and/or local government elections are occupying the minds of many.
    And that's just the start.
    As is usual at this time of the year, business and governance commentators have stuck their collective necks out, promulgating a variety of predictions given the indicators (as real or imagined as each indicator may be); each behaving as if they possess levels of predictive insight beyond what a reasonably educated person might be able determine by tossing a coin. But do they? They cannot all be correct—in fact, none may be. 
    The challenge for boards, of course, is working out how to respond well. 
    What is becoming increasingly clear is that boards have become confused by what's going on around them. Increasing numbers have grown quite tired of 'conventional wisdoms' and so-called 'best practices' (plurals intentional). Some have responded by taking defensive positions, and others are boldly trying things without first understanding the contextual relevance.
    My response to enquiries from boards is straightforward: open your eyes to the possibilities, think and act strategically, but don't be impetuous. Check the current context, because things change, often in unexpected ways. Helping boards respond well typically involves sharing insights from research and practice; facilitating discussions; and providing contextually-relevant and evidence-based guidance. If you want to discuss options to respond well to a changing world around you, or lift the effectiveness of your board, please get in touch. 
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    Value creation: A commonly used term, but what does it mean?

    Accountability Corporate Governance Decision Making Leadership Value Creation
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    Much has been written about the notion of value creation since the phrase became 'hot' in business circles several years ago. Today, one does not have to listen for long to hear questions such as "Does XYZ add value?' or "What's our value proposition?"The term is dropped into sentences hither and thither, flowing from the tongue freely, as if it were an old friend. This implies that 'value creation' is front-of-mind; something that is not only topical but also to be striven for. 
    But what is 'value creation', and how is value created? Here's one view:
    Value creation is the primary aim of any business entity. Creating value for customers helps sell products and services, while creating value for shareholders, in the form of increases in stock price, insures the future availability of investment capital to fund operations. From a financial perspective, value is said to be created when a business earns revenue (or a return on capital) that exceeds expenses (or the cost of capital). But some analysts insist on a broader definition of "value creation" that can be considered separate from traditional financial measures. "Traditional methods of assessing organizational performance are no longer adequate in today's economy," according to ValueBasedManagement.net. "Stock price is less and less determined by earnings or asset base. Value creation in today's companies is increasingly represented in the intangible drivers like innovation, people, ideas, and brand."
    This description, from Reference for Business, reveals that 'value' can mean different things to different people. As with many concepts within the social sciences and liberal arts (of which management and governance are expressions), context is crucial. Clarity of language is needed if leaders are to be effective and businesses are to prosper. Listeners and readers must be able to comprehend messages readily. The following questions provide a useful starting point for such an enquiry:
    • Who is the recipient of the intended value?
    • What is valuable to them, and why?
    • Can this value be created cost-effectively?
    • How will 'success' be measured?
    Rather than make assumptions or assertions (think how often have you heard people claim a 'unique value proposition'), put these questions to the beneficiaries (because, rightly understood, the 'value' of anything is determined by the recipient not the creator). 
    Start your enquiry at the 'top' of a company. Boards should sit with shareholders and ask (or propose, if the shareholder is unclear) what 'value' looks like to them. This is the 'core purpose' question. Responses might include increased share price; a long-term market position or business model; increased market share; a social priority; or some combination of these, or even something completely different. Senior managers and staff should meet with customers (or prospective customers) and ask the same question. Ask staff themselves as well: the motivations of employees are likely to be different from those of shareholders and customers. 'Great solutions' that 'add value' to are highly unlikely to hold any sway at all if the intended beneficiary does not recognise, or is not interested in, the 'value' that is supposedly being offered. As with strategy, boards need to take the high ground, by ensuring that value created for one recipient does not erode value elsewhere. Boards need to work with management and together become crystal clear about value in a holistic sense: what it is, who the recipient is, and how it is created. ​
    Once the value matrix (what, to whom, how and why) is understood and agreed, the answers need to be communicated in a clear and concise manner, so that effort and expectations can be aligned accordingly.
    ​Finally, a note to boards: You have an ongoing responsibility to ensure that purpose, strategy and managerial and operational activity are not only aligned, but also the desired value (outcome, strategic goal) is actually being achieved and that it is recognised by the intended recipients. The importance of ask probing questions cannot be overstated.
    An earlier version of this article first appeared in 2015.
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    Skin in the game: A boardroom perspective

    Accountability Conferences Corporate Governance Decision Making Family Business Performance
    Ten days ago, I was in Vienna to attend the Global Peter Drucker Forum, as an observer and participant. However, at the last minute—actually, three days before the Forum—the organisers asked me to 'jump in' to cover for a panelist who was a withdrawal. The session, which was recorded, was entitled "Managing like you have skin in the game". I was asked to provide a boardroom perspective. My comments start at 41m 35s:
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    Upcoming European speaking and advisory tour

    Conferences Corporate Governance Decision Making Governance Performance Research Research Update Speaking Engagements
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    In a couple of weeks, I'll be in England and Europe, for the third and final time this year. The schedule includes attendance at two conferences, delivery of two keynotes and a bevy of meetings, as follows:
    Sun 25 Nov
    ​
    Mon 26 Nov
    Tue 27 Nov
    Wed 28 Nov
    Thu 29 Nov
    Fri 30 Nov
    Sat 1 Dec
    Sun 2 Dec
    Mon 3 Dec
    Tue 4 Dec
    Wed 5 Dec
    ​
    ​Thu 6 Dec
    Stockholm: Deliver keynote at event organised by Digoshen (Topic: Outlook on international corporate governance and board practices).
    ​Stockholm & London: advisory meetings.
    Transfer to Vienna.
    Vienna: Global Peter Drucker Forum, pre-conference workshops.
    Vienna: Global Peter Drucker Forum, main conference (day 1).
    Vienna: Global Peter Drucker Forum, main conference (day 2).
    Vienna: post-GPDF review; transfer to London.
    Free day in London.
    London: advisory meetings.
    London: ICGN Global Stewardship Forum. 
    Henley: ​Share research insights with faculty & doctoral students (Henley Business School Governance Seminar); explore future research opportunities.
    London: ​advisory meetings.
    While the schedule is fairly full, some gaps remain for additional meetings (in London).
    If you would like to meet, please get in touch. I'd be glad to discuss any aspect of boards, corporate governance or effective board practice; explore a research idea; or respond to (future) speaking or advisory enquiries.
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    Re-conceiving 'control', as a constructive mechanism

    Accountability Corporate Governance Decision Making Governance Performance Tough Questions
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    In business, as in life, the task of exerting control is commonly perceived as being one of exercising limits; of saying 'no' and imposing constraints. Such perceptions are well-founded. Check these verb usages of 'control', lifted straight from the dictionary:
    • to exercise restraint or direction over; dominate; command
    • to hold in check; curb
    • to test or verify (scientific experiment)
    • to eliminate or prevent the flourishing or spread of
    If you have spent much time in boardrooms, you'll know that director behaviour tends to be consistent with these definitions, more so if the chief executive is ambitious or entrepreneurially-minded (the two attributes are not necessarily the same). When asked, board justification for exercising caution is straightforward: to keep the chief executive honest and to keep things 'on track'.
    Such an understanding—holding management to account—seems admirable. Monitoring and supervising management is one key task (of four) of corporate governance after all. But does a strong hand actually lead to better outcomes? More pointedly, how might the exercise of restraint and limits advance the purposes of the company (noting the board is responsible for ensuring performance goals are achieved)? Such conduct is analogous to applying the brake when the intention is to drive on. A growing body of academic and empirical evidence suggests that a strong hand, like increased compliance, may actually counter-productive.
    Rather than persist with what is demonstrably a problematic approach, it might be more fruitful for boards to consider another perspective. ​What if control is re-conceived in positive terms (namely, constructive control), whereby the board's mindset is to provide guidance (think: shepherd or coach) by ensuring the safety of the company and steering management to stay focused on agreed purpose and strategy? Might this deliver a better outcome? 
    Emerging research (here, but contact me to learn more) suggests the answer is 'yes'. Strongly-engaged and strategically competent boards that display high levels of situational awareness as they debate issues from multiple perspectives and make informed decisions in the context of the long-term purpose of the company can make a difference. Constructive control is one of five important behavioural characteristics of effective boards identified in this research.