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    A journey, in thought and deed

    Accountability Corporate Governance Language Performance Research Rules Value Creation
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    When I was a boy, milk was free (I was raised on a dairy farm), but you could buy it in a glass bottle with a silver foil top (pasteurised but not homogenised) for four cents a pint at the general store. Television (once we got one, in 1969, to see the Apollo 11 moonshot) was a grainy, black-and-white experience, with a single channel available. You got to watch whatever the broadcaster chose to deliver across the airwaves.
    Now, milk costs several dollars a litre, but it comes in many different styles (blue, light blue, skim, lo-fat, full-cream, calcium fortified, lo-lactose and UHT—as well as products called milk that contain no milk at all, such as oat milk and almond milk, in a wide variety of packaging options). Television has changed too: from a take it or leave linear broadcast experience via rabbit-ear antennae, to a plethora of video-on-demand (streaming) options via the internet. 
    These are but two of thousands of examples that illustrate the onwards match of technology. Oh how life has changed, even in my lifetime.
    The onward march has also affected the way we communicate, not only personally with family and friends, but also with clients, suppliers and the general public as well. The notion of using a fountain pen to handwrite a letter, or making a toll call, seems quaint now—but some of us still value these moments. The emergence of social media has extended our reach in ways not thought possible twenty years ago. Sharing business cards, once commonplace, is now rare. If people want to contact me or learn about me, they tend check my LinkedIn profile (notice the assumption, that I have one), even before mentioning Google or asking about a website or blog. 
    And that brings me to the point of this muse, which is to share one aspect of a conversation with an esteemed company director, in the hope it might encourage others committed to serving the director community. Yesterday, I was asked about the role of social media in my business life, what channels I use and how long had I been using these. The first two questions were readily answered; the third took a little longer—because I needed to find the menu option!
    • Social media: LinkedIn is the only social platform I use. It complements my website and blog, as a forum to comment on topical issues, share articles written by other people and, candidly, reach boards and directors who make use of Linkedin as a trusted source of information. Previously, I used Twitter, but that did not last long for the platform was, I thought, little more than a soapbox for people to shout at each other. When I checked my LinkedIn profile, I was surprised to see I had first used the platform in July 2003, over twenty years ago and just three months after the platform was officially launched by Reid Hoffman!
    • Website: petercrow.com was first launched in November 2001, the month after I left paid employment and founded QuarryGroup, the global board advisory practice. Musings, the blog, came later, in March 2012. The websites were (and remain) online brochures, whereas the blog was created as a place to share my thoughts and test ideas while working on my doctorate. Since 2016, Musings has become a forum for a wider range of board and governance topics. Today, approaching 750 entries later, Musings is read widely, by a global audience.
    Thank you for permitting me to share my experience. I hope anyone considering using social media or a blog as a channel might be encouraged—not only to do so, but to stick at it over the longer term. My journey to date has been fulfilling; I have met thousands of people from many walks of life and, I hope, they have valued the interaction as much as I have.
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    Is corporate governance a framework, or something to be practiced?

    Accountability Complexity Corporate Governance Decision Making Director Development Language Tough Questions Value Creation
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    English can be a confusing language. The same word can have different meanings in different contexts (by 'bear', do you mean the animal, taking up arms, or putting up with someone; and is a 'ruler' a measuring instrument or a monarch?). Meaning and usage matters; more so because it is not static. Language evolves, whether by design or in response to an evolutionary development. Some refinements improve our ability to communicate effectively, others to defy logic.
    The understanding and usage of the terms 'governance' and 'corporate governance' are topical cases in point. While the term 'governance' is derived from the Greek root kybernetes meaning to steer, to guide, to pilot (typically a ship), a plethora of usages have emerged over time. Today, many different usages have become commonplace. These include the oversight of managers and what they do; the activities of the board; and the framework within which shareholders exert control and boards operate.  It is also used to describe the board itself ("we'll need to get the governance to make that decision"). ​The term has also been applied in an even broader context, the business ecosystem (i.e., system of governance). The most extreme example I have heard is, "Governance can mean almost anything, it is completely idiosyncratic; different for every organisation".
    Things are made worse when two related but distinct concepts are conflated. Consider the definition of corporate governance and the practice of corporate governance. The former is relatively stable. Eells (1960) coined the term, to describe the structure and functioning of the corporate polity (the board). Later, Sir Adrian Cadbury (1992) added that 'corporate governance' is "the means by which companies are directed and controlled". The fundamental principle here is that corporate governance is a descriptor—the activity of the board. Compare that with the practice of corporate governance--how a board enacts corporate governance when it is in session. The means by which boards consider information and make decisions can and must be fluid depending on the situation at the time.
    The wider context merits a brief comment—the rules under which companies and their boards operate (statutes, codes and regulations), and the consequential impact of the board's decisions. These are necessary, because they define the wider environment; what is allowed and what is not. In recent years, ​I've heard many people include regulations and codes within their understanding of corporate governance. Similarly with the consequential impact of the board's decisions beyond the boardroom. Are either of these corporate governance?
    If you'll allow a sporting analogy, it's important to distinguish between the rules of the game, the game as played, and the final score. All are necessary, but only one is the game. To embrace an all-encompassing understanding suggests that corporate governance is ubiquitous, extending across the entirety of the company's operations and the functions of management, leadership and operations—not to mention the wider system of rules of regulations. This, I am convinced, takes us close to the root of the confusion that besets many directors. Every time I'm asked, I invoke Eells and Cadbury. A framework of laws and regulations is necessary, for these define the operating boundaries. But they are not corporate governance. In asserting that corporate governance is the means by which companies are directed and controlled, Cadbury was saying that corporate governance is the descriptor for the work of the board. And work, straightforwardly, is something to be practiced. Let's not lose sight of these distinctions. The continued 'sloppy' use of language serves only one purpose: to obfuscate. 
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    Is 'good' governance to be desired?

    Accountability Corporate Governance Decision Making Governance Language Performance Research
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    I'm in London for the weekend, an interlude between inter alia commitments hosted by the Institute of Public Administration (a masterclass for board chairs, in Dublin); Lagercrantz Associates (a workshop, in Stockholm); and the Baltic Institute of Corporate Governance (a masterclass and the BICG conference keynote, in Vilnius). 
    To work with people across cultures, countries and contexts is a great privilege. Discussions reveal differences in perspective and approach. Yet, some things are consistent, transcending borders and cultures. One example is 'good governance'. Directors everywhere want to know how to achieve good governance.
    This is a tough request. The problem is that 'good' is a moral qualifier, implying someone or something is morally excellent, virtuous or even righteous. But that is not all it means. A quick check in any dictionary reveals at least 39 other definitions! Which one does a person have in mind they ask for help to achieve 'good governance' or 'good corporate governance'? And what about other directors around the table. Do they have the same understanding or not?
    It's little wonder that directors have become confused about the role and purpose of the board.
    Pragmatically, corporate governance is the means by which companies are directed and controlled (Cadbury, 1992), that is, it describes the work of the board. The objective is to produce an agreed level of performance (however measured). 'Effectiveness' is a more appropriate qualifier than goodness. If something is effective it is adequate to accomplish a purpose; producing an intended result. 
    Returning to the question of how to achieve good governance. After reminding the enquirer that so-called best practices offer little guarantee of success (which one is best anyway), I usually steer the discussion away from goodness towards effectiveness (performance), and suggest that Bob Garratt's Learning Board matrix, and the Strategic Governance Framework are useful starting points for a lively discussion at the board table.
    Once directors acknowledge that high company performance is the appropriate goal, and that success is a function of effectiveness more so than goodness, they start to ask more relevant questions, such as, "What actually matters?" and, "How do I as a director and we as a board become more effective?"
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    Does the term 'corporate governance' need a spring clean?

    Governance Language Research
    Have you noticed how 'corporate governance' has pervaded the modern lexicon? The term is used in all manner of contexts nowadays. Some are appropriate and some less so. I wrote about this last year, off the back on a comment made by Rob Campbell. Here's a couple of fresh examples that I've heard used in the last sixty days:
    • ​That "more women are needed in governance". The speaker probably meant more women are needed on boards, to govern. The subtlety? Women are people and boards are structures, whereas corporate governance is a mechanism through which and by which boards act. I doubt more women are needed within the mechanism! Rather, more women are needed on the board, to activate the mechanism more effectively, in pursuit of desired performance objectives.
    • "We'll get governance to look at that", and the variant "That will need governance approval". The two different executives (same forum, I was the facilitator) meant that the matters on the table needed to go to the board for consideration. 
    Both of these examples might sound a little contrived, but they are not. All three phrases were spoken, spontaneously and in my hearing, by capable and well-intentioned people. The people in the room knew what was meant, I think. However, these three vignettes set me thinking. Is our usage of the term 'corporate governance' starting to change—away from the original intention (describe the functioning of the polity, i.e., the board of directors) to something different, or have we become somewhat lazy in our usage? I'd be interested in your views on this one!
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    Ideas: Reading to relax and recharge for the journey ahead

    Language Readings
    Have you ever arrived at the completion point of a major project, breathing heavily (as it were) having expended much mental and emotional (even physical) energy on the journey, only to find yourself twiddling your thumbs and wondering about the challenges that lie ahead? While some folk are anxious to move on quickly (those defined by busy-ness or a fear of idleness perhaps?), others happily use the time to read—both to relax and to recharge the mind for the journey ahead.
    I have been happily working my way(*) through the following books since completing the doctoral dissertation on 1 June. I commend them to you and, if you choose to open the front cover, trust you gain much enjoyment from the experience.

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    Why things matter to people, Andrew Sayer.
    Sayer shows how social theory and philosophy need to change to reflect the complexity of everyday ethical concerns and the importance that people attach to dignity.
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    Akenfield, Ronald Blythe.
    This modern classic gives voice to the inhabitants of a rural village in Suffolk, England, was an early and shining example of what an oral history could be.

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    Half man, half bike: The life of Eddy Merckx, William Fotheringham.
    A biographical narrative of cycling's greatest rider. On the bike, Merckx had an insatiable appetite for victory. Off the bike, he was sensitive and surprisingly anxious.
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    Russian Roulette, Giles Milton.
    An historical account of how British spies thwarted Lenin's attempts to destroy British India, the intrepid activities of which led to the formation of MI6.
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    The price of inequality, Joseph Stiglitz.
    Stiglitz discusses the social impacts and causes of inequality, and the economic and political impacts of what appears to be a growing problem.
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    The fish rots from the head, Bob Garratt.
    Garratt's much acclaimed book, considered a classic by many, clarifies and integrates the roles and tasks of directors, and includes a programme to help them develop the skills and approach required to do their job well.
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    To the edge of the world, Christian Wolmar.
    A fascinating history of he construction and operation of the trans-Siberian Railway, including its impact on Russian society and relations with neighbours.
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    One summer: 1927, Bill Bryson.
    A narrative of the reckless optimism and delirious energy that characterised America in the summer of 1927.
    (*) This is very much a work-in-progress. As of 4 July, the 'score' is four books down and four to go, and several new research and board practice ideas to boot!
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    I stand corrected!

    Governance Language
    A muse that I wrote yesterday asked a series of questions about company ownership. It stimulated quite a bit of interest, albeit for reasons other than I expected. Having discussed the matter with several commentators, I now know why. It turns out that one of the underlying assumptions upon which the muse was based—that companies have owners—was wrong. 
    How often have you heard someone say they 'own a portion of <company name>' or that they are 'company owners'? These statements, while plausible, are actually incorrect. People (individuals, groups, other companies) own shares in a company, they don't own the company (or a portion of the company) directly. The company is an entity itself. It issues shares ('bundles of intangible rights') and these can be owned or traded, as is so ably explained here (see clause 2).
    Thank you to those people that contacted me to point out my error. The phrase 'company owner' has been removed from my vocabulary! However, the notion of 'ownership' remains. I hope this brief note goes some way to putting the record straight. Please contact me if you would like to know more.