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    Clearing hurdles provides a sense of accomplishment

    Governance Phd Research
    At high school, I was an "above average" middle distance runner. I won a few races and was selected for regional competitions. Running on the track seemed to come reasonably naturally to me. I didn't train to any great extent. In contrast, the hurdles races were a challenge. I just couldn't get the timing right and would inevitably knock over hurdles or, worse still, end up in a heap somewhere along the track. Despite practice, I struggled—until one day I slowed down, concentrated entirely on technique, and cleared all 10 hurdles! Looking back along the track, the sight of 10 standing hurdles spoke volumes. I had accomplished my goal. I promptly retired (at the ripe old age of 16), having achieved my only clear run, ever.

    Visual feedback is great. It gives a sense of achievement. Whether it's looking back at 10 standing hurdles, admiring a painted wall, or taking in the vista having climbed a mountain peak, the sense of progress and achievement is tangible and immediate.

    This week, I cleared another (albeit small) hurdle along my research journey. The doctoral journey is long and arduous. Breaking it down into bite-size chunks is necessary, for my own sanity and to measure progress. My research proposal was submitted for consideration by the Confirmation Panel. While I still have to defend the proposal in front of the panel, the sense of accomplishment that came from completing and submitting the written the proposal was very real. For six months, I have been preparing for this week—reading, thinking, collating ideas, arguing with myself (and others on a couple of occasions), editing text and adjusting my argument. If the proposal (and my defence) is acceptable, I'll lock in another "cleared hurdle", and get started on the next chunk of work—ethics and case selection. Fingers crossed.
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    Regulation, diversity, investor confidence and company performance

    Governance Research
    Have you noticed the rising tide of news stories about corporate governance in recent months? While some have highlighted the fraudulent behaviours of some boards and directors, most of the articles have focussed on efforts to improve the quality of governance around the world. 

    Much of the current discussion is focussed on regulation and diversity. Some regulators, including those in Singapore, believe that good regulatory frameworks are key to investor confidence. Many others, including Hong Kong's Exchange HKEx and noted academic Dr Richard Leblanc, are promoting diversity as a means of improving the quality of governance. I applaud these moves, but question whether regulation and diversity are the variables that will reliably deliver the main goal of good governance: better company performance. Regulation, for example, is a compliance tool not a growth tool. While they provide important safeguards for shareholders and stakeholders, they don't help companies to grow.

    My conclusion, having reading hundreds of research reports and peer-reviewed articles, is that behavioural factors, social context and an active involvement in strategic decision-making are far more important than regulatory, structural or composition factors. As such, this is where our efforts to improve governance performance should lie.

    Ultimately though, the bottom line remains the same. Shareholders—whether professional investors or small business owners—need to know that the board is fulfilling its mandate to maximise company performance. If regulation or diversity helps achieve that, then well and good. If not, then let's move our attention to other factors—quickly—for the good of our economy and society.
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    When is a director no longer independent?

    Governance Management Research
    Does the holding of company shares automatically compromise a director's independence? And when is a director no longer independent?

    These questions have troubled shareholders, prospective directors, legislators, and researchers for many years. I suggest the answers depend on what one means by the words "independence" and "independent", because there is a world of difference between acting independently (independence of thought and decision) and being independent (no vested interest).

    If a director holds no pecuniary interest in the company then it is reasonable to expect them to act independently in their considerations, discussions and decision-making. Things can get a little more complicated when a director holds shares. They are no longer independent (by definition), however they may still act independently. In my experience, there is no hard-and-fast line, beyond which independence is automatically compromised. Some directors with small shareholdings (1–3%) struggle to act independently, whereas others with larger holdings (5–10%) seem to be able to act independently, even though they are not independent.

    I would be interested to hear the views of others, particularly behavioural specialists, to debate these questions, and determine whether finding answers actually matters (or not).
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    Gender diversity and performance: new evidence

    Governance Research
    Does gender diversity in the boardroom improve company performance? This question has been comprehensively researched and debated for many years, however definitive evidence has remained elusive—until now, perhaps. A comprehensive research report just published by Credit Suisse shows that companies with gender diversity in the boardroom perform better than companies with all-male boards, using data from 2360 companies from 2005–2011.

    While the results show some definite trends (the benefits of diversity within management, for example), the researchers stopped short of attributing the increased performance to the presence of women on boards. Clearly, diversity is having an impact, but how and why? As the report states, "there is not one easy answer to why gender diversity matters". Could it be that a wider set of experiences and viewpoints is contributing to a more vigorous debate; or that the presence of women leads to a greater level of engagement by board members? The results from the Credit Suisse report are helpful, but the bottom line is that we simply don't know—yet.
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    Why do Boards focus on monitoring (vs. strategy)?

    Governance Management Phd Research Strategy
    A very interesting discussion is underway in one of the LinkedIn groups at present. It has arisen out of a survey conducted by PwC, which showed many discrepancies between what Boards actually do and what directors think they should be doing or concentrating on. While attitudes are starting to move, actual behaviours are lagging well behind.

    Several researchers and practitioners (including me) are exploring why Boards concentrate on monitoring and control, when the respondents said they want to spend more time on strategy. Others are discussing the Board's role in IT oversight.

    These are important issues for Boards. I suggest you have a look, and contribute your views!
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    When the penny drops and the fog lifts...the view is great

    Complexity Governance Phd Research Tough Questions

    Have you experienced the pure delight, the visual symphony, of looking to the horizon after reaching the pinnacle on a seemingly unending trek? When the view changes from the near detail of the next step to the overall context? Yesterday, I had exactly this experience with my research. After spending several weeks wading through a great pile of weighty tomes, academic articles and handwritten notes, feeling somewhat daunted by the seeming lack of progress, a penny dropped and the fog that'd been masking my view lifted.

    All new knowledge needs to be built on a worldview (technically, an ontology and an epistemology). In my case, discovering the most suitable starting point for my governance research. I've been struggling with this, because the theory of knowledge doesn't come naturally to me at all. Much of the governance research to this point has employed positivist (financial analyses), post-positivist (structure and composition research) or constructionism (boardroom behaviour) worldviews.

    Unfortunately, much of the research to date has revealed very little about the impact boards have on performance. Therefore, my work needed to look at the problem quite differently if any progress was to be made. The new lens finally became clear during a meeting with my Supervisor yesterday, when we explored a couple of seemingly left-field ideas that I'd been investigating in recent days. An intense 30-minute discussion around the whiteboard was all it took. The path forward became clear. And in case you're interested, the worldview is pragmatism, supported by a multiple-case study design and grounded theory.

    With the launching point now clear (in my mind, at least!), it's time to pause for a coffee and admire the view, before heading onward and upward again to face the next challenge. Thank you to everyone who has encouraged me in recent weeks, I (now) appreciate it.