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    So, what exactly is governance?

    Governance Management Performance Readings Research
    One of the most common requests I get in my advisory and research work, and at speaking engagements, is to provide a definition of 'governance'. I think it keeps coming up because there's no universally accepted definition. To press the point, when Africa Zanella asked for a definition of governance on LinkedIn recently, her question generated over 50 replies.

    Notwithstanding this, we need to try understand what governance is and what it is not. Here's my take (which also appears as one of the 50 replies): I have come to understand that governance is an activity. It has a purpose (what) and a process (how).
    • The purpose of governance is to protect the owner's interests, and to optimise the performance of the organisation in accordance with the owner's wishes.
    • The process of governance is encapsulated in one word: oversight 

    To be effective in governance, boards need to understand their purpose, and have a process through which to determine performance goals (develop a strategic plan, together with management) and oversee performance against plan (a monitoring regime). In contrast, the primary role of management is to implement the approved plan (having contributed to its development, with the board).

    Hopefully, this view is helpful. Love to hear what you think!
  • Published on

    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.
  • Published on

    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

    Humbled, honoured, privileged & thankful—at the same time!

    Governance Phd Research
    News arrived today that Massey University has seen fit to support my doctoral research by awarding a Doctoral Scholarship, worth $25,000 per annum. This is truly a blessing, and indicates that Massey sees value in my research. The funds will help offset costs associated with data collection (some of the boards I am observing require domestic and international travel). It also means that I can attend some highly regarded international conferences, to socialise my emergent ideas and solicit feedback. Overall, the scholarship means that the research can continue apace, which bodes well for a strong outcome. If you would like to learn more about my governance research, please contact me. 

    Thank you Massey University, I am deeply grateful for your support.
  • Published on

    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.
  • Published on

    Governance and management: is a clear separation best?

    Governance Management Performance Phd Research
    I have been working on a paper which explores issues surrounding the separation of governance and management. The topic is potentially quite controversial, because it questions the basis of most modern governance practice. Hopefully, the findings will be presented at a conference in the USA early next year.

    The paper is needed because we have witnessed many corporate failures in the last decade, and autopsies suggest that a failure of governance was a contributing factor in many cases. Clearly, the separation of governance and management espoused by agency theory(*), and by many since, has provided no guarantee of success. Various defensive positions have been erected by Boards including lack of information; poor implementation of strategy; and, management fraud. Important questions lie just below the surface, including what role the Board should play, and whether a clear separation between governance and management is the best model to achieve the organisation's aims.

    The answers to these questions have potentially far-reaching ramifications. I would appreciate hearing your views and experiences, to inform my research. If you can share links or references to any prior papers, that would be great as well. Please feel free to provide a (public) comment here, or, if you would prefer, contact me via email.

    (*) The "traditional" view—that the roles of governance and management must be held separate—is based on agency theory. Agency was proposed by Jensen and Meckling in the 1970s. It has become the dominant theory of governance, in both research and practice. However, in the four decades since, no robust evidence to explain how such a model delivers better performance has emerged.