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    Crafting an organisation with purpose

    Accountability Decision Making Governance Performance Strategy
    Earlier this year (September), I had the privilege of attending the Organisations with Purpose conference, an event that sought to address questions about why organisations exist—their reason for being. The two-day event, which was jointly organised by London Business School and Blueprint for Better Business, was well-attended by some leading academic thinkers and, significantly, a few influential business leaders as well. 
    An overriding theme pervaded the conference: Companies with a single, clearly defined and communicated purpose tend to perform better than those that do not. To hear others summarising evidence-based research and case studies on a topic that I've been interested in for some years was great. It filled in several gaps in my understanding. A summary of the conference proceedings is now available. I commend them to you.
    The high point of the conference was the Blueprint for Better Business framework, a model to guide decision-making in purpose-driven businesses. It was compelling, to the extent that I've registered to attend a two-day immersion workshop, ahead of introducing the framework to companies in Australasia from early 2017. 
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    On corporate governance, boardroom ethics and Brexit

    Accountability Decision Making Governance Performance Tough Questions
    One of the joys of working internationally is the opportunities it presents to discuss topics in a range of different contexts. While most of these discussions are either private (with clients) or rather impersonal (conference presentations), some are recorded for the benefit of a wider audience—including this recent conversation with Lavaniya Das of Azeus Convene. We talked about corporate governance, boardroom ethics and how the C-suite is dealing with Brexit:
    If you want to explore any of the points discussed in this interview, or challenge them, please feel free to either reply below or get in touch via email.
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    How can boards exert influence from the boardroom?

    Accountability Decision Making Family Business Governance Research
    A burning question for many directors is encapsulated in the title of this muse. In recent years, the business media has published many stories about boards; questionable board practices; assertive CEOs that 'take over': and, missteps and failures that seem to emanate from the boardroom. Some of these stories are justified, whereas others lack substance. Alongside, the academic community has investigated the question, although typically from the perspective of a desk-based researcher using public data or, at best, interview comments. Reliable knowledge about the board's role in influencing business performance has remained elusive. Sadly, unsubstantiated claims have filled the void.
    I have spent several years investigating the question of board influence beyond the boardroom as well, to discover whether boards are simply disempowered groups that meet to rubber stamp decisions, or whether influence (especially over firm performance) is possible. The quest has included longitudinal observations of board meetings; interviews with chairmen, directors and chief executives; and, the analysis of very large piles (mountains, seemingly!) of board papers, minutes, reports and observation notes. Useful insights have been gleaned from informal discussions with directors have provided useful insights as well.
    While no definitive answers to the burning question have emerged (in any predictable sense anyway), a pattern is clearly apparent:
    • Influence is possible. The board's active and sustained involvement in an agreed set of strategic management tasks (especially strategy formulation, strategic decision-making and verifying strategic outcomes are being achieved) is crucial if the board's interventions are to have any effect on the achievement of desired business performance goals. Director capability, board activity and boardroom behaviours matter. Specifically, the harmonious expression of five underlying behaviours are necessary if the board is to have any impact.
    • However, outcomes are not guaranteed. The board does not operate the company directly (that task is normally assigned to the chief executive), and many other factors both within and outside the company (most of which are outside the board's direct control) can affect actual performance. 
    Findings have been written up in my doctoral thesis. These findings are summarised in two published papers, with similar sounding titles.
    • How boards influence business performance: Developing an explanation. This paper was published in Leadership and Organization Development Journal (Volume 37, Issue 8), an academic journal.
    • Board influence from and beyond the boardroom: A provisional explanation. This paper was warmly received (it received the best paper award) at the European Institute of Advanced Management Studies' 13th Annual Workshop on Corporate Governance in Milan in late October 2016.
    Copies of the papers are available here. If you want to know more, please get in touch. I'd be glad to discuss the findings (especially the implications and guidance for practice) with any board or group intent on realising and sustaining high levels of company performance.
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    Improving board effectiveness: Let's meet, in Sydney

    Accountability Conferences Decision Making Governance Research
    If I had a dollar for every time questions of board effectiveness and how to drive performance from the boardroom has been discussed in my hearing, I'd be well off. My role in answering these questions will continue in Sydney at the end of the month.
    • The organisers of the Governance Institute of Australia annual conference (28–29 November) have invited me to be a panelist alongside Simon Pordage and Amanda Wilson. I am looking forward to serving the Australian board and governance community in this way. The topic that the panel will be wrestling with, "The pursuit of productivity", promises for a lively discussion!
    • Following the conference, I will remain in Sydney for two days (30 November and 1 December) for private meetings with directors, boards and other leaders. If you would like to meet to explore good corporate governance; how to respond to emerging challenges in your business; or, the results of my latest research and the implications for more effective board practice, I'd be delighted to sit with you. Please get in touch to schedule a meeting.
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    Best paper award!

    Conferences Decision Making Governance Research
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    The 'best paper' awards from the 13th Annual Corporate Governance Workshop (of the European Institute for Advanced Studies in Management, held in Milan last week) have just been announced. The Award Committee recognised Board influence from and beyond the boardroom: A provisional explanation, my paper. While the paper was warmly received when it was presented and many interesting discussions followed during the conference and since, the award was an unexpected surprise. ​​That the findings from my governance research have been recognised by an international group of scholars is truly gratifying. Thank you, I am honoured.
    If you want to learn more about the research and findings (especially the practical implications for boards), please get in touch. 
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    Who (should have) the most say on the boards of family businesses?

    Accountability Decision Making Family Business Governance
    I arrived back in New Zealand this morning from six productive days in London (client and new business meetings) and three days in Milan (EIASM conference: day one and day two summaries). My first morning back is typically consumed attending to any non-urgent mail (envelopes and packages, not email) that may have arrived. Today was no different. Then the phone rang. The person on the other end, a director named Simon (not his real name) wanted some advice. He was struggling to settle a dispute that had been simmering in a family business boardroom for a couple of months. Tempers were starting to become frayed.
    The board in question comprised six directors, three of whom were also shareholders (one was the managing director). The other three (including Simon) were independent directors. The dispute arose when one of the non-executive directors (who held approximately 28 per cent of the company's shares) disagreed with the other directors on a strategically important issue. After some discussion, Simon revealed that the director expected to influence the decision "commensurate with my shareholding". The other directors were not sure how to proceed. Thankfully, they sought external guidance before things got out of hand.
    This vignette is not uncommon in family-owned businesses (regardless of size, sector or complexity). It occurs when when non-executive directors want to exert 'power' and the board as a whole is not adequately informed about its duties and responsibilities. Unchecked it has the potential to cause significant damage. Fortunately, and notwithstanding the social tensions, the issue is far from insoluble. 
    ​While debate (including vigorous debate) is to be encouraged in the boardroom (the research literature has associated vigorous debate with higher quality decision-making), directors need to understand that no one director necessarily has any more (or less) power than any other. When it comes to decision-making, all have an equal 'say'—one vote—because the board being a collective of peers required to make decisions together.
    ​Problems can occur if non-executive directors attempt to wield 'power' through their shareholding, even though shareholding has no relevance in the boardroom at all. Non-executive directors can (sometimes conveniently) lose sight of this, especially when an issue of importance to them is being debated or they hold strongly-held views on an issue. In the heat of the moment, they can confuse their director and shareholder decision rights (one vote per director v. one vote per share, respectively). Director decision rights apply when the board is in session (during board meetings). In contrast, shareholder decision rights apply in shareholder meetings only (e.g., the annual general meeting). Directors need to both comprehend this distinction and act accordingly, if the board is to be a place of productive decision-making.
    If you'd like to know more, about decision-making in the boardroom or any other aspect of good board practice, please let me know. I'd be delighted to serve you.