According to a survey commissioned by accounting software firm MYOB and conducted by Colmar Brunton, New Zealand firms are slow adopters of technology. A newspaper article which summarises the research report was published today. The report contains statistics about the digital world, including cloud-computing uptake and website presence. The article suggests that NZ businesses are "off the pace", and goes on to imply that the NZ economy is weaker as a result of slow technology adoption.

Gosh, this is heady stuff. The Internet has changed the way we live and work, and no doubt will continue to do so. But to say that an economy is weaker because uptake of the latest iterations of computing capability is slow is a big call. Businesses need to get clear about their motivations and choices. I know many SME firms that operate well (ie. very profitably) using so-called legacy computing systems. They have not embraced cloud computing (for example) because the financials and or security risks simply do not stack up for them.

Finding new and more efficient ways of doing things is an important element in the business mix. In fact, the pursuit of sustained competitive advantage demands that we continue this quest. However, jumping on-board with a new development because everyone else is seemingly doing so is not a sufficient justification. We need to be careful to avoid the trap of seeing all innovations as panaceas. We have much to learn from history in this regard. While some innovations will prevail, many of today's so-called innovations will be re-labeled as "fads" in the future, just as we have re-labeled earlier developments. Let's keep our eyes open and our brain engaged when looking at new innovations. I suspect the economy will be better for it.

*Declaration. I happily use a mix of cloud- and local-computing tools on a daily basis.

An outstanding Editorial appeared in our local newspaper, the DominionPost, today. The editorial highlights the significant conflict of interest that exists when local government politicians are appointed to the boards of Council Controlled Organisations (CCOs). The appointment of local councillors—many of whom lack sound governance expertise, and all of whom are conflicted as the editorial argues—must stop. 

Councils and local communities would be far better off if independent directors were appointed to the boards of CCOs (and held accountable through normal shareholder and fiduciary processes). Independent, commercially astute directors would focus entirely on their role of acting in the best interests of, and maximising the performance of, the company. In so doing, the returns to shareholders would more than likely improve over what would otherwise be possible with a highly conflicted Board.

PS: I disagree with one sentence towards the end of the Editorial "...over time, superior systems will produce superior results." No. Governance is a complex and socially dynamic phenomenon. Over time, superior systems should produce superior results. 

A seemingly small—but ultimately quite significant—statement emerged from the corporate governance sector this week. The CEO of one of New Zealand's larger companies went on record when announcing the company's annual result. He stated that his directors must act in the best interests of the company (not the shareholder).

Meridian chief executive Mark Binns said the company would take time to evaluate the situation but would ultimately come to a decision that was in the best interests of Meridian Energy Limited. ''The obligations of the directors are very clearly set out in companies law and the Companies Act, that is to act in the best interests of the company.''

This was a refreshing statement, because most directors and executives (in New Zealand) incorrectly believe their role is to act in the best interests of the shareholder. Research conducted in 2010 by Dr James Lockhart indicated that the majority of directors in New Zealand simply do not understand their legal obligations. The New Zealand Company Act is quite clear: directors must act in the best interests of company. Well done, Mr Binns.

Calls for more women on boards have been coming thick and fast for a while now. Many proponents (here, here, here) are taking a stand, and the noise seems to be reaching a crescendo. The growing body of research that women make a difference is starting to look compelling. 

The presence of women on boards seems to be associated with many positive aspects of governance, particularly behavioural aspects, including:

• More civilised boardroom behaviours and conversation
• Better dynamics and interaction
• Increased attendance at meetings
• Improved corporate reputation

Women are also better at processing information. However, evidence relating to one metric—some would say the most important one—is still remarkably elusive. Does the presence of woman on company Boards lead to improved financial performance? Is there a causal link? Inferential associations have been made, but no solid evidence has been demonstrated yet. If a causal link does exist, we need to find it. We need to move beyond the emotion, rhetoric, quotas and sideshows, to solid evidence. Then we can move on.

New Zealand has a proud heritage of export-led growth. For over 100 years, the world has beaten a path to our door to buy our protein and fibre. Superficially, this has been great for the nation. Export sales from our large companies grew by 40% in the four years to 2011. Yet in the last 50 years, New Zealand's OECD ranking has plummeted—from the top-5 to well into the bottom third of the list. The trouble is that our large exporters sell low margin commodities. They contribute little to the economy in real terms. And export growth in the rest of the market is languishing at less than 2%. Clearly, our smaller, aspirational companies aren’t getting the traction they need to grow.

How should we respond to this? Do we accept our place in the world? Or should we make the changes necessary to punch above our weight as we have done so well in the past? The late Sir Paul Callaghan was right when he argued that diversification into high-value, high-margin businesses is crucial to our economic future.

The question in my mind, having read the 2012 Budget summary and subsequent comments from MEA, interest.co.nz and others is this: “What role should the government play (if any), to kick start this reinvention of New Zealand’s economy?”

Have you lost confidence in some of the leaders around you? You are not alone. Mike Figliuolo just hit the nail squarely on the head. Check this out:The Leadership model is broken.

• We are broken as leaders.
• We talk funny.
• So what's to fix?
• One person. The whole person.

Mike's thesis is as profound as it is pragmatic.