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    Paper accepted onto EURAM conference programme

    Conferences Governance Performance Research
    I am thrilled to announce that a paper written earlier this year, entitled Boards, strategy and business performance: Observations from inside boardrooms, has been accepted onto the programme of the prestigious European Academy of Management (EURAM) conference, to be held in Warsaw, Poland on 17–20 June. A copy of the abstract has been posted here. Some 1350 papers were submitted for consideration, so to be have been selected and asked to speak at the conference is truly an honour. Thank you to the reviewers and track chair who considered the paper sufficiently worthy.
    This conference becomes the third (of three) that I will be contributing to in June: 
    I will be on the ground in the UK and EU to continue the corporate governance discussion from 2 to 20 June, with some time available between conferences. If you would like to take advantage of my proximity—as a speaker or facilitator, or to seek some advice—please contact me.
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    On consultants and selling #corpgov short

    Accountability Governance Leadership Performance
    Why do consultants spend so much time on hobby horses, promoting their own capabilities and frameworks? Shouldn't the focus be on thinking about and promoting options that are genuinely in the best interests of the clients and marketplace they seek to serve? Take this example, which suggests that good governance is built on good information and data governance. The author cites several technical frameworks and acronyms (COSO and COBIT are mentioned), none of which I understand. 
    That a strong focus on standards and frameworks might be sufficient to ensure good governance (an oft cited but rarely defined term) is misleading in the least. Necessary maybe, but sufficient? No. The root of governance emerges from the Greek word kubernetes, which means to steer or pilot, typically a ship. This suggests governance is an activity associated with movement; with setting direction, navigating or guiding something—presumably towards a longer-term or major goal, or at least with a purpose in mind.
    I have no doubt that frameworks are necessary within organisations to support regular business activity. However, to imply that good governance (and, presumably, business performance, although the author makes no mention of this) will emerge from the application of standards and compliance frameworks is misleading. Looking backward (monitoring) or to standards (compliance) may satisfy egos that work is being performed, but to think that either will drive performance is folly. Compliance with standards can only ever achieve one of two things: compliance or dissidence. Compliance-based frameworks (Sarbanes-Oxley, amongst others) did little to prevent the GFC of 2007–08. Some say the focus on compliance may have contributed to the failures. If businesses expect to achieve certain desired outcomes, the board needs to look to the future by building appropriate plans (strategy); providing resources to the chief executive; and, monitoring and verifying the agreed strategy is being implemented and expected performance targets achieved.
    Consultants that continue to promote compliance-based technical frameworks as 'solutions' and associate them with 'good governance' are, quite frankly, doing their clients a disservice. Business leaders need to test consulting proposals thoroughly, by asking how (ask for specifics, don't accept general statements) the suitor's proposal will assist with the achievement of the business's strategy. This will probably be threatening to some consultants—but if it moves the focus onto business performance and economic growth, wouldn't that be a good thing?
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    "Completely overhauled" actually means "musical chairs", or so it seems

    Accountability Governance Performance
    I'm staggered. According to the Merriam–Webster dictionary, to overhaul something is to "to look at every part of (something) and repair or replace the parts that do not work". By extension, a complete overhaul is to repair or replace the entire system. The people I spoke with in the UK and the EU last week were consistent in their expectations: that many directors should be replaced with directors untainted by the failures of governance that have occurred. HSBC has a proud tradition, but a new start is needed. Sadly, this does not seem to be happening. The promised complete overhaul seems to be just a shuffling of roles—musical chairs if you will.
    How confident can or should investors and account holders be after hearing of these changes? A damp squib might be a more appropriate description of the proposed changes, but that wouldn't sell many newspapers or engender much confidence would it?
    HSBC has been under the hammer for several weeks now, as people have waited—expectantly—for news of what "completely overhauled" might actually mean. Then, late last week, the picture started to come into view: Several changes in the boardroom were announced.
    • Rachel Lomax, board member since 2008, becomes senior independent director
    • Sam Laidlaw, board member since 2008, becomes head of committees
    • Sir Simon Robertson "steps down", but remains deputy chairman for another year
    The headline implies a wholesale change, but the reality that seems to be emerging is somewhat different: it turns out that the promised overhaul might actually just be a shuffle. Consider this:
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    Oh the demand... 

    Conferences Governance Leadership Performance Phd Research
    Nine business days after arriving in England for meetings and speaking engagements in several English and Swiss cities, I am once more seated at Heathrow: this time to enjoy Air Zealand's service on the long flight home—and to sleep! Reflecting on fifteen meetings, eight hotels and many conversations, the main thought to emerge from this trip is "demand". Simply, the level of interest in boards, board practice and how to get boards doing the 'right' things in order to achieve the business performance outcomes expected by shareholders has been almost overwhelming. For example:
    • Professors from two English universities and one Irish university have offered to organise masterclasses to expedite healthy debate about boards and the difference they can make.
    • Two different groups of people, both based in Zurich, including professorial staff at unisg.ch, have said they want to organise teaching and learning seminars, to raise the bar amongst banks and international businesses.
    • The team at Ethical Boardroom has invited me to provide the editorial commentary for their summer issue.
    • Several (sorry, I'm not at liberty to disclose details) have requested advice on matters relating to board structure, apprenticing, strategy and business performance.
    That so many people are actively seeking help to improve business performance through effective contributions in the boardroom has caught me on the hop. After all, the public persona presented by boards and chief executives is that they have everything under control. However, when the conversation moves beyond platitudes, its seems most are worried. I have put myself at the service of all who are interested. If you would like to know more, or to schedule some assistance, please contact me.
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    Apprentice directors: an on-ramp to a successful career?

    Accountability Governance Performance
    The 'profession' of company director seems to be beset with an interesting challenge: how can or should young directors be introduced to boardrooms? In the eyes of the law, all directors are created equal. Young directors need to be competent and effective from the very minute they are appointed. Yet an important element of directing—experience and judgement—can only come from time spent in the boardroom. Do you see the Catch–22?
    I have been exploring this challenge with directors in London, Leeds and Oxford this week. The prevailing view is that the profession has a problem. Many senior directors are reluctant to retire (the stated motivations are interesting in themselves, but that's another muse), and they don't seem to be interested in blooding new directors. Solid answers were few and far between. However, one option that did emerge was the notion of an 'apprentice director': one who is exposed to the full workings of boards and board practice, but without the demands of holding a formal appointment. The people I spoke with thought that apprentice director schemes may well have merit, but only if certain parameters are adhered to:
    • Apprentices are of an age, whereby they hold sufficient 'life' and 'business' experience to make sage decisions. The general consensus was that those less than 40 years old were unlikely to be suitable (although there will be the odd exception).
    • Apprentices need to be members of a directors' institute and have completed a recognised professional development programme. The courses offered by the Institute of Directors, Australian Institute of Company Directors and the Institute of Directors in New Zealand were all mentioned.
    • That that board requests a legal opinion, to ensure that an apprentice is not caught by the 'deemed director' interpretation that those on so-called advisory boards are exposed to.
    • That terms of apprenticeship are established and documented, including a fixed term (twelve months was the most common suggestion).
    • That the apprentice is paired with an experienced company director to act in a mentor capacity.
    The notion of an apprentice scheme has considerable merit in my view. In-country directors institutes are ideally placed to take up the challenge of creating a scheme and of actively promoting its uptake amongst the boards of privately-held and publicly-listed companies. They should also consider 'accrediting' graduates (who would have to sit and pass an assessment), to provide a level of confidence to those recruiting directors. 
    If you have a view on this, as a director of a board that has considered or apprenticed a director, or as someone with an alternative suggestion to solving the inexperience problem, please share it here.
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    How to keep strategy alive in the boardroom

    Accountability Governance Performance Strategy
    A couple of weeks ago I had the privilege and pleasure of working with 20 company directors on the strategy day of the Institute of Directors' Company Directors Course. Several delegates had a particular interest in how to keep strategy 'alive' in the boardroom. In their experience, boards start with good intentions but they quickly return to what they know best, monitoring and controlling. They agreed that boards are responsible for company performance (which means boards need to make decisions about the future of the business), so boards need to take strategy seriously. But many don't, which suggests that an important questions remains unanswered. How can boards keep the important matter of strategy alive?
    I put the question to the group and we had a great discussion. After about 20 minutes of to-ing and fro-ing, the group seemed to settle on four main suggestions, as follows:
    • To tip the agenda on its head. Rather than discuss action items, the risk register and performance reports (typically the chief executive's report and the financial report) first, the group thought strategic items should be discussed first, particularly if some major items were expected to need considerable time and careful attention.
    • To ensure that reports were aligned directly with strategy. If the company was working to (say) four strategic priorities, then the chief executive's report should have a business performance overview followed by four sections, to demonstrate progress against each strategic imperative. The reports should also comment on the results actually being achieved vis-a-vis expected results.
    • To ensure that a major element of strategy (one of the strategic priorities, for example) was tabled at every second meeting (to allow space for annual reporting, budget cycles and other compliance oriented matters that also need attention at other meetings). The purpose of the agenda item is to debate progress, explore environmental and contextual matters pertaining to the strategic priority.
    • To create space for new information—particularly emerging trends and competitor news—and then to check whether the extant priorities were still valid and appropriate, or whether adjustments might be required.
    These are great suggestions, and they are consistent with my research and experience. They appear to have 'reach' as well, from smaller companies just starting out with boards, right up to publicly-list enterprises. What was most heartening though was the reality check that came at the end of the discussion: many of the delegates agreed that the 'urgent' can and often does get in the way of the 'important'. Consequently, business-as-usual (monitoring and compliance items) can supplant strategy. A strong and vibrant relationship between the chairman and chief executive was thought to be vital, to ensure that the agenda was appropriate; that the reporting was at the right level; and, that the chief executive had the resources to execute on that which they were expected to deliver upon. Notwithstanding such efforts, individual directors need to make a commitment—to themselves and each other—to keep the conversation focussed on strategy, for the sake of the future performance on the company.