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    Upcoming talks and workshops in the UK & EU

    Governance Leadership Research Speaking Engagements
    The level of interest in board effectiveness and good governance outcomes seems to be growing, or so it seems if the number of advisory, speaking and workshop enquiries that have arrived in recent weeks is any indication. Already, 2017 is shaping up to be busier than last year!
    My first trip to the UK and EU for 2017 is scheduled for mid-March. The programme is starting to take shape, as follows. Commitments include speaking engagements (topics: the board's role in value creation, emerging trends and findings from my latest research), workshops (board capability development), advisory meetings and a training course.
    If you have a question or want to set up a meeting, please get in touch. 
    EDIT (30 Jan): My diary is now nearly full—the only remaining opportunities to book a meeting are in London. If you want to meet, but not in March, or if you want to discuss the possibility of an engagement in the future, please register your interest. At this stage, it is my intention to return to the UK and EU in June and September. 
    20 March
    London, UK
    Business meetings
    21 March
    Rotterdam, NL
    Speaking engagement, workshop, advisory meetings
    22 March
    Amsterdam, NL
    Advisory meetings
    23–24 March
    Helsinki, FI
    Research seminar, workshop, advisory meetings
    27–28 March
    London, UK
    Advisory meetings
    29–31 March
    Cambridge, UK
    Attend training course
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    The gift of time: use it to your advantage

    Accountability Decision Making Governance Leadership Performance Strategy
    One of the great joys of the holiday season is the opportunity it presents to let the mind wander, both to relax and recharge after a busy year, and to draw strength for the year ahead. Whether out walking, chatting with friends, completing personal projects or, more simply, sitting and reading, the time and space afforded by the lull in both business activity and the associated flow of correspondence is one to be savoured. 
    Amongst the books and papers that I have read recently, the edited summary of a speech by Admiral James Stavridis at the National Defence University convocation in 2011 stood out. (Stavridis retired from the US Navy in 2013. He is now Dean of the Fletcher School of Law and Diplomacy at Tufts University.) Stavridis offered the class of 2012 three keys to successful leadership in the 21st-century: read, think, write. The straightforward though wide-ranging message contained some real gems, applicable to leaders from many walks of life, especially those involved in demanding and fluid environments. Here are a few of the standout comments:
    "The quintessential skill of an officer [leader] it to bring order out of chaos."
    "Reading is the rock upon which you will build the rest of your career."
    "We must think our way to success in incredibly complex scenarios."
    "After you read and think, I would argue you must write. Writing is essential in communicating what we have learned, as well as allowing others to challenge our views and thus make them stronger."
    "Diversity of capabilities, capacities, and responses to any challenge should be seen as a strength, not a weakness, but only if action and tools can be used synergistically."
    Stavridis said that collaboration, an innovative mindset and a preparedness to move quickly in response to emergent opportunities are crucial attributes if leaders are to meet and successfully overcome complex situations. The keys—of reading, thinking and writing—provide the foundation. However, a comprehensive approach is still needed: to bring together and synergise the talents of a variety of people from many different quarters, because no one person has all the insights let alone answers.
    The parallels between the military examples mentioned by Stavridis and the business context are striking. If military campaigns are to be successful, generals must understand complex and fluid situations, deal with emergent opportunities and challenges, and make decisions promptly. Similarly, company success is contingent in no small measure on the effectiveness of the board as a decision-making team.
    ​Despite the seemingly unending demands that press in, the most valuable asset in the director's arsenal remains: the gift of time. How will you use it to your advantage over the next twelve months?
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    GIAconf'16: Update #3

    Conferences Governance Leadership Research
    This is the third update of several to summarise observations from the 33rd Governance Institute of Australia National Conference being held in Sydney this week. Here are the links to the first and second updates. (The final update, covering the second day, will be published tomorrow.)
    ​This update includes observations from the late afternoon session.
    The session was dominated by a panel discussion on the topic of culture and why it matters. John Price and Judith Fox, both of whom had addressed the conference earlier were joined by Peter WIlson (Chairman of the Australian Human Resources Institute) to discuss this important topic.
    Fox and Price quickly established the strong correlation between positive organisational culture and company performance, although they did so through the 'back door': asserting the poor culture often leads to erosion of value. While this assertion is intuitively accurate, the next statement caught many in the audience off guard. The statement was, and I quote, "Good governance frameworks lead to good culture". Really? I looked forward to hearing how this might be. Sadly, the claim was not substantiated—the audience was left hanging. I was hoping for something more substantive than a straightforward claim. Fortunately, Wilson provided it—his comments  caught the audience's attention.
    Wilson tackled several myths of culture head on, reminding the audience that culture and performance are different; that a good culture is not a reliable predictor of high company performance (although the opposite is more reliably true as Fox and Price made clear); and, that culture can actually be measured, despite assertions to the contrary. Wilson backed up each of these claims with stories and/or evidence, all of which had strong practical undertones. Most notably, Wilson called out the importance of the board to set the 'tone at the top', and to insist (through reporting and walk-throughs) to ensure that the 'mood in the middle' is consistent and not, as is more common a 'muddle in the middle'. 
    Beyond the panelist's comments, my thoughts wandered to the title of Garratt's helpful book The fish rots from the head​ several times throughout the session. If the board is not leading by example, it is not leading at all. 
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    Wells Fargo: Is "We're sorry" sufficient?

    Accountability Decision Making Ethics Governance Leadership
    You must give newly appointed Wells Fargo Chief Executive Officer Tim Sloan credit. No sooner had disgraced former CEO John Stumpf left the building, Sloan delivered a speech to all employees to apologise for the scandal that had beset the company. That Sloan delivered an apology  is a good first step on the path towards redemption (the company boasts a long and proud history), even though "we're sorry for the pain" appears to be an apology for the angst employees faced rather than the fake accounts action itself. 
    Two things are especially notable in this case:
    • The board has been remarkably silent. This scandal rocked the entire firm, not to mention confidence in the banking sector. Why has the board not been more visible? Yes, Stumpf is gone. But why has the chairman not spoken yet? Did the board know of the decisions and activities that perpetrated the scandal? If so, why has accountability not reached to the boardroom? If not, why not? To be ignorant of something this big suggests the board may have not been making adequate enquiries. Were probing questions being asked of the chief executive, or was the boardroom a more passive environment?
    • The appointment of an insider (Sloan is a 29-year company veteran) to the position vacated by Stumpf (and to the board) is curious to say the least. Sloan would have been aware of the fake accounts scandal. An 'Acting Chief Executive' appointment (to provide leadership while a full recruitment process proceeded) would have been a better move. The appointment certainly raises questions about the level of due diligence and the recruitment process the board utilised prior to making the appointment.
    That Stumpf's (and now Sloan's) boss has both remained silent and appointed from within is very telling. 
    (Note to the Wells Fargo board: If you want to talk further, in total confidence, here are my contacts details.)
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    Wynyard Group: What went wrong?

    Accountability Decision Making Governance Leadership
    Former sharemarket darling, Wynyard Group, was put into voluntary administration this week. The announcement was made via a notification to the share market and notice on the company website.
    The company was highly-valued, well-funded and governed by seemingly capable directors. Its products, software systems to assist in crime fighting, were seemingly in demand—evidenced by strong revenue growth since an IPO in 2013. Milford Asset Management, a shareholder, valued the company at nearly $120M at the time of the IPO. But Wynyard failed to make money, then or since. The result was inevitable: the company became caught in an ever-deepening hole that, in the end, was too deep to climb out from. When last traded, the notional value of the company had fallen to less than $40M. Now that the liquidator is involved, the residual share value is (close to) zero.
    What went wrong?
    Whereas some failures reported this year appear to have been grounded on hubris or fraudulent behaviour, such motivations do not appear to have been significant at Wynyard Group. The failure appears to have been more straightforward. Indicators have been visible for some time as well. Ultimately, the actions (or inaction?) of the board of directors need to be placed under scrutiny.
    The company's business model was characterised by infrequent high-value sales (read: a lumpy revenue profile). The company also employed lots of highly-capable software engineers and other technical specialists. Effective cash management is crucial in such companies. Superficially, the company appears to have been carrying too much cost, suggesting that it took on expense too far ahead of the revenue curve. The company does not appear to have had a backup plan to be activated if revenue expectations were not realised (in either the expected timeframe or manner). 
    ​The market seemed to know there was a problem (track the share price over the last 18–24 months), yet the situation was allowed to continue seemingly without any major corrective action being taken. The company burned through over $140 million of shareholder funds. It's little wonder that the investors became bitter.
    Why were the problems not addressed by the board much earlier? Was the board (which included several high-profile directors, three of whom resigned in May and June 2016) not in control as it should have been? Though present, were directors asleep at the wheel rather, in effect adopting a passive style of oversight—in contrast to that conceptualised by Eells, Cadbury, Garratt and others?  Was the board captured by an optimistic outlook and charismatic management? More pointedly, who was actually in control? The early indications suggest that the company was being controlled by management—ineffectively so, as is now patently clear—usurping the board's statutory role.
    What can we learn?
    That Wynyard Group has now joined (unwittingly) a rather long list of companies of interest to governance researchers and MBA classes (adding case example of what not to do) is clear. This case will also, no doubt, be played out in the business media and by 'experts' in the days to come. In the meantime and regardless of whether Wynyard is wound up or continues to trade in some form, the case provides salutary lessons for boards elsewhere:
    • First, directors should realise they have a duty to act in the best interests of the company, not the shareholders, employees, managers, suppliers or any other party. This includes not allowing the company to trade recklessly and, importantly, making tough decisions if required. If the viability of the company is at risk, the board is duty-bound to act.
    • Second, directors need to make appropriate enquiries and ask probing questions, to ensure they clearly understand the business of the business (a weak point of many directors). Active engagement and adequate knowledge are crucial foundations not only to the formulation and approval of strategy (a responsibility of the board) but also effective decision-making including strategic decisions.
    • Thirdly, to what extent is the conformance–performance dilemma in hand? Is the board spending adequate time on forward-facing performance-related matters (especially strategy), or (as is more common than many directors admit when surveyed) is most of the board's time being spent on compliance and conformance matters?
    • Other considerations include whether the directors are strategically competent, actively engaged and operating with a sense of purpose. Also, does the board possess the collective efficacy thought to be necessary to work together and exert control constructively? 
    Boards should discuss these and related matters periodically, to ensure they are appropriately focussed on (and adequately equipped to pursue) the value creation mandate. A formal, externally-facilitated board and governance assessment (providing an outside perspective) should offer useful insights as well, so long as any recommendations arising are acting on.
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    Webinar: Influencing company performance, from the boardroom

    Governance Leadership Performance Speaking Engagements
    I'm thrilled to announce that the Madinah Institute for Leadership and Entrepreneurship (MILE) has invited me to present a webinar entitled Influencing company performance, from the boardroom. The webinar will start at 3:00pm Saudi time on Sunday 2 October—to suit American, UK/European, Middle Eastern, African and Asian company directors and board members in particular.
    For more information, click here. You'll need to register (free).
    ​The following topics will be discussed during the 45-minute webinar (with an open Q&A session afterwards):
    • How to resolve the challenge of exerting influence and adding value from the boardroom
    • What effective boards do and how effective directors behave
    • Practical suggestions to move the board's focus from compliance to performance
    Reserve your place today!