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    ECMLG'15: Opening Keynote

    Conferences Governance Leadership Management Research
    The 11th European Conference on Management, Leadership and Governance (ECMLG) got underway this morning, at the Military Academy in Lisbon, Portugal. Nearly 90 researchers, from 28 countries have assembled to present their research and debate emergent ideas and models.
    The overall theme of the conference was set by Colonel Nuno Lemos Pires when he delivered the opening keynote address ​From Leaders to Commanders. His talk provided some interesting contrasts between leadership in a civilian context and a military context:
    • Whereas many leaders choose their team and mission, commanders do not chose their team nor do they chose the mission to be accomplished.
    • Whereas the natural human condition is towards nepotism, the military context is one of renouncing individual freedoms and preferences in favour of the greater good.
    • Military leadership (commandership) needs to embrace—almost by definition—multi-national, multi-cultural and multi-dimensional elements, whereas this is not necessarily the case in civilian leadership.
    Notwithstanding these contrasts and tensions, Pires then described several attributes of effective military leadership that appear to be applicable in the civilian context:
    • Critical thinking, to ask 'why' and understand motivation (cf. blind followership)
    • Individuality and initiative (in effect, ownership)
    • A habit of searching for and discussing contradictory options, to find 'better ways' (continuous improvement).
    Leadership is a complex topic. In drawing both contrasts and parallels, including a direct challenge of the 'command and control' perception of military leadership, Pires set the scene well set for an interesting two days ahead.
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    EIASM Corporate Governance Workshop: Reflections

    Conferences Governance Research
    Thirty-six researchers from over twenty countries gathered in Brussels last week (29–30 October) to discuss emerging developments in the fields of corporate governance and board practice. While some of the contributors are 'pure' academics committed to theory development, others (like me) span academia and practice. Consequently, a sharp 'real world' edge was apparent. Here are a few of the insights and topical themes that emerged:
    • A question that emerged early on the first day and seemed to underpin much of the discussion was whether researchers have begun to lose sight of what corporate governance is or might be. There was a call for researchers to return to first principles, whereby corporate governance is that set of activities and interactions that occur in the boardroom  when the board is in session. The group acknowledged that other activities occur amongst shareholders, advisors, regulators and managements. While these activities are both important and necessary they are not corporate governance.
    • The impact of the 'second owner' (of entrepreneurial and high-growth businesses) on business performance was discussed. The second owner is the second-largest shareholder, the largest being the founder/CEO. The research suggested that the second owner has a large moderating effect on the founder/CEO's behaviours and decisions, and that this effect seems to be linked to increased business performance.
    • Several researchers reported the results of case study research on the governance of family businesses. One paper that stood out concerned the leadership transition from the founder/CEO to another family member. Such transitions can be problematic, especially if the founder/CEO has concerns over the capabilities of the incoming leader. The research discovered that non-family shareholders (specifically, private equity investors) can play a powerful mentorship and decision-making role through a transition period. The benefits are two-fold: the incoming CEO is seen to be effective 'from day one' even though they lack the requisite skills and expertise, and the experiences gained through the process accelerate the CEO's learning and development.
    Two other developments that stood out concerned the conduct of board research:
    • A small but discernible move towards 'making a meaningful contribution' was apparent throughout the workshop. In the past, many researchers have simply 'published research', some of which has had questionable relevance beyond the immediate researcher's interests. However, it seemed that researchers have begun to realise that, while publishing might be an important metric within academia (the 'publish or perish' mantra), the more pressing priority—of delivering relevant, actionable research to assist shareholders, boards and executive teams—needs to prevail. This is a great development, one that might help span the sometimes gaping divide between academia and the 'real world'.
    • A second noticeable trend concerned the methodological approaches being used by researchers. For many decades, the dominant approach to board, director and corporate governance research has been to look from afar—using publicly available data and statistical analysis techniques. In contrast, many of the papers recognised the complex, socially-dynamic nature of boards, and the need to utilise methodologies that studied boards holistically and (ideally) in situ. This development is significant, because it recognises that when boards are dissected they are no longer boards.
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    Important #corpgov conference, this week

    Conferences Governance Management Performance Research
    Are you interested in emerging research on boards and corporate governance, and its practical application in boardrooms? If so, two upcoming conferences may appeal (I will be speaking at both of them):
    Session summaries will be posted here, so check back later in the week for update, and then again in a couple of weeks time, on 12–13 November. Please let me know if you are interested in a particular paper or session: I will do my best to attend and report on it for you.
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    Is it better to give, or to receive?

    Conferences Governance Phd Research Time Management
    Do you know the origin of the well-known saying 'it's better to give than receive'? This phrase (from the Bible) calls our focus into question: are we better to have an outward mindset for the benefit of others, or to concentrate on self? This dilemma has been front of mind over the last twenty-four hours. The following list is a snapshot of the important giving and receiving tasks that I need to complete over the next seven days:
    • This morning: Re-read parts of my doctoral thesis, working through various scenarios that might be raised during the oral examination. This is a receiving task—it's for my benefit.
    • This afternoon: Start work on the slide deck to accompany my paper to be presented in Brussels next week. This is a preparation task, ahead of a giving activity.
    • This evening: Fly to Hamilton to ahead of presenting on the Institute of Directors' Company Directors Course tomorrow. The task at hand is threefold—to present the Strategy Day material, facilitate discussion and share insights. This is primarily a giving task.
    • Wednesday: At the home office, making final preparations for the oral examination.
    • Thursday: Drive to Palmerston North, for the oral examination of my doctoral research. After three-and-a-half years effort, it all comes down to this meeting. No pressure!
    • Friday: Finalise the slide deck for the EIASM presentation and write a letter to confirm an important speaking and facilitation engagement—both after some reflection on the outcome of the previous day's activity, no doubt.
    • Monday 26: Leave for Brussels via London, to attend and speak at the 12th European Institute of Advanced Management Studies Corporate Governance Workshop. Summaries of this giving and receiving activity will be posted here later next week.
    So, a busy seven days lies in wait, with some important giving and receiving tasks along the way. My week highlights a dilemma faced by many busy people: where should one's priorities be placed? All of the tasks are important—but are any more important? If compromises are required, what should prevail? Better to spend time preparing for the teaching and speaking commitments, or the examination—to give or to receive? If you are facing a similar challenge this week, what yardstick will you use to make your choices? ​
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    "Leave a little bit in the tank, you may need it at the end"

    Governance Phd Research Research Update
    One of the delights of my high school years—close to forty years ago now—was to run. Mostly, I ran 1500m on the track and cross-country events. While I did experience the winning tape a few times, most events saw me finish off the podium. I was a capable but not great runner. Perhaps it was the genes, or technique, or perhaps I didn't prepare sufficiently well. 
    My lingering memory from those enjoyable days was a piece of advice offered by a quietly spoken coach, at a regional event, "Leave a little bit in the tank, you may need it at end." ​
    To that point, I had run hard from the gun, out in front quietly hoping to have enough energy to keep going until the end. To hold something back seemed counter-intuitive. What if others ran ahead? Could they be caught? I was torn, but took the coach's advice anyway.
    Three runners jostled for position for the first three laps of the race. With the coach's words still front of mind, I ran with the group, even though I could have gone faster. As the pace increased on the last lap, I held position. Then, part-way down the finishing straight I gave it everything—slowly pulling ahead to reach the tape first! That little bit left in the tank from earlier in the race had fuelled the final dash to the line.
    The parallels with my doctoral research journey—to discover how boards can influence business performance—are clear. The oral examination is just ten days away now. The journey to date has been arduous yet fulfilling, and not without its challenges and setbacks as you might expect. With the oral examination now in sight, should I go all out or hold a steady pace? Will the oral signal the finishing tape has been reached or will the examiners require emendations?
    ​Regardless of the examiner's decision, the goal is to finish well. Thus, the next ten days are being spent re-reading material, pondering options and working through scenarios—all with the wisdom of my coach of old ringing in my ears.
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    Back to the drawing board: what is corporate governance?

    Governance Research
    Have you noticed how frequently the term 'corporate governance' is bandied about these days? References are commonplace in magazine articles, research papers, codes and regulations; and the term is frequently mentioned in everyday conversation. However, the term is used in different ways in different contexts, to the point that there are a plethora of understandings of what governance in a corporate context is or might be.
    This lack of consensus of what corporate governance is has all sorts of implications for boards of directors in practice—not the least of which is the confusion it causes. Are boards to pursue performance or conformance outcomes (or both), for example?
    This well-written article (recently published in the New York Times) highlights some of the issues that boards and shareholders have to deal with as a consequence of the ambiguity. These include whether chairman–CEO separation increases company value or not; whether the number of independent directors is material to improved company wealth outcomes or not; and, that some investor groups see corporate governance as a means of controlling boards.
    The original basis for boards (a proxy, following a separation between ownership and control of decision-making), as espoused by Berle and Means in 1932, appears to have been lost somewhere along the way. That corporate governance is now considered to be a panacea for the ills of the business world (or so it seems) doesn't help either. 
    ​The board governance community appears to have two options: to persist with seemingly flawed (structure, process, policy) assumptions in search of consensus (and risk further 'governance wars'), or to return to the drawing board to re-assess what corporate governance actually is.
    If we return to the drawing board, the most important tasks of the board (setting of strategy and oversight of management in pursuit of shareholder value) could provide a useful foundation of any re-assessment—so long as the socially-dynamic interactions that occur in boardrooms and the competencies of effective directors are incorporated in the analysis. An interesting possibility might be to re-conceive corporate governance is a multi-functional mechanism that is activated by boards in session and through which business performance outcomes are pursued.
    ​Might a mechanism-based conception be a useful starting point from which to re-conceive what corporate governance might actually be and how boards might influence business performance? Quite possibly. In fact, this possibility is one of the main outputs of my doctoral research. I'll be able to discuss it in more detail after the thesis is examined. If you'd like to join the mailing list to learn more, or to explore its application in practice, please let me know.