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    On meeting people, and learning from them

    Conferences Governance Management Performance Phd Research Strategy
    One of the things I really enjoy when travelling is meeting people for the first time. My doctoral research journey provides a case in point. It has brought me into contact with many interesting people, including members of the international academic and governance communities. The conversations and experiences that I've been privileged to be part of have helped me gain new insights; form opinions; and, map out the next steps of my journey. The sights and sounds of unfamiliar cities, and the conversations with hotel staff, shopkeepers and other locals, have added context, colour and richness.

    When I am in England and Europe in November, to present a paper at ECMLG'13, I hope to continue conversations started in Bangkok back in February; to start new conversations and build new relationships; and crucially, to help others grapple with the demanding topic of how governance can help improve business performance.

    If you'd like to join the conversation or arrange a meeting, please contact me, so that we can find a date and time that works best for you. I'm available to meet anyone, anywhere.
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    European tour: available to speak or consult in Nov'13

    Conferences Governance Management Performance Phd Research
    Are you based in the UK or Europe, and do you need any assistance with governance or strategy? I will be presenting a paper at ECMLG'13 (European Conference on Management Leadership and Governance) in November. As the itinerary has me arriving in London the weekend before the conference, I have some time available for other meetings or speaking engagements, as follows:
    • Sunday 10 November: arrive in London
    • Monday 11 November: available
    • Tuesday 12 November: available
    • Wednesday 13 November: travel to Klagenfurt, Austria
    • Thursday 14 November: ECMLG'13
    • Friday 15 November: ECMLG'13
    • Monday 18 November: available
    • Tuesday 19 November: depart

    If you would like to me to meet with you and your colleagues, or speak (in London or any other capital city), please contact me to let me know how I can help.
  • Published on

    Well done Mr Palmer

    Governance Management Performance Strategy
    I understand that the Chairman of Air New Zealand, Mr John Palmer, will retire at the upcoming annual general meeting, after twelve years in the role. Mr Palmer became Chair in 2001, when the airline was on its knees—essentially insolvent—save a bailout from the government of the day.

    For ten years, Mr Palmer worked closely with now former CEO Rob Fyfe, to rebuild the organisation to become the strong, innovative and, importantly, profitable carrier that it is today. The journey was not always plain flying however. The test-flight tragedy in southern France cast a long shadow, and decisions to close engineering facilities (with the inevitable staff redundancies) and various routes would not have been easy. On the positive side of the ledger, new safety briefing videos, new uniforms, new cabin layouts, improved levels of service, and innovative fare structures have contributed to increased demand, and ultimately, better financial performance. Clearly, the company crafted an effective strategy, and implemented it well.

    Mr Palmer has led well during his time as Chair, and his peers have recognised his not inconsiderable impact, by naming him the Chairman of the Year twice, in 2007 and 2009. Well done Mr Palmer, New Zealanders owe you a debt of gratitude.
  • Published on

    Shareholders to hold board accountable

    Governance Management Performance Strategy
    The trend towards holding boards accountable for company performance appears to be alive and well, with news that shareholders plan to vote against two incumbent directors at listed company Rakon. It seems that shareholders are starting to lose confidence in the leadership of the business, after several years of poor financial performance. Rakon's share value has plummeted in recent times.

    The board has led the development of strategy, but performance has floundered. Clearly, something has gone wrong. It could be that the linkage between strategy and the business' purpose was not tight; the strategy was not appropriate for the prevailing environmental conditions; the strategy was not implemented well; or, executive hubris may have stifled good decision-making. Regardless of the actual cause, the board should have monitored performance against strategy more closely. Adjustments should have been made as soon as discrepancies between planned and actual performance became apparent. Shareholders are right to hold the board accountable for performance in this case, because it was the board that created and approved the strategy, and committed the company's resources.
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    It's time to put diversity in context

    Governance Management Performance Phd Research
    The calls for more diversity on company boards have become a cacophony. Researchers, commentators, shareholders, aspiring directors and wishful thinkers need to pause and take stock, lest political correctness, personal agendas and hearsay trump the real goal, that of driving company performance. 

    The most recent variant that I've seen is a call for increased diversity on selection panels, because this leads to more diverse appointments. Sorry, but I struggle with this. How will a more diverse panel result in a more diverse board (assuming of course that a more diverse board leads to increased company performance)? Surely, the primary goal of a selection panel is to appoint the best people to achieve the best result for the company and the shareholders—regardless of gender, creed, experience or any other 'diversity' attribute?

    Many have jumped on the diversity bandwagon in recent years, presumably because a number of correlations between visible variables (notably gender, ethnicity, independent directors, split CEO/Chair, but there are others) and company performance have been identified. I agree that some correlations have been identified, but they are not universal across all cases by any means. In fact, the research results are mixed, and we must not forget that correlations are not causations.

    The real challenge is to discover the underlying causal mechanism(s) that explain how boards actually influence company performance. I doubt the answer lies in the superficial correlations that have been observed to date. We need to dig deeper, beyond the current diversity arguments. We also need to admit that explaining how boards influence company performance is a very complex, socially dynamic problem—which means assertions that transient correlations are causal are unlikely to be correct.
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    On Microsoft, governance and strategy

    Governance Management Performance Strategy
    The announcement this week, of Steve Ballmer's intention to retire as CEO of Microsoft within twelve months, sounds straightforward. However, when the announcement is read carefully, interesting questions of governance and strategy emerge. The following snippet, from Microsoft's own release, provides the insight:

    “The board is committed to the effective transformation of Microsoft to a successful devices and services company,” Thompson said. “As this work continues, we are focused on selecting a new CEO to work with the company’s senior leadership team to chart the company’s course and execute on it in a highly competitive industry.” 

    The company has struggled to maintain the market dominance it once enjoyed, and a decision has been made to change the leader. Many commentators have proffered views about this, some of which appear here. Whether Ballmer quit of his own volition, or was pressured to do so, is a moot point.

    The Board's expectation for the future is more clear—it expects the new CEO to craft strategy and implement successfully ("... selecting a CEO ... to chart the company's course and execute ..."). It seems that the Microsoft Board is not expecting to be involved in the development of strategy, despite the Board's primary role being to maximise company performance in accordance with shareholder wishes. If strategy creation is delegated to the CEO, what is the Board's role? It can only be monitoring and compliance. This is a very narrow, and outdated, view of governance. How does reviewing past performance ensure future success? It doesn't. Success is contingent on understanding the environment, selecting the most effective strategy and successful execution. And even then success is not guaranteed. You would have thought the Microsoft Board would have taken its role more seriously than to delegate this crucial task of strategy formulation to the CEO.