Research - Peter Crow | Helping boards govern with impact

Published on: 20 October 2017

The pursuit of high board performance

Plans and preparations for my next set of international commitments are coming together well. I'll be on the road for two-thirds of November to fulfil five speaking engagements; attend two conferences; lead a one-day learning workshop; fulfil two advisory commitments; and, attend a miscellany of meetings. The key dates are:

Sydney (1st & 2nd)
Wellington (3rd)
Brussels (5th to 7th)
London (8th to 10th, and 14th)
Rochester (13th)
Vienna (15th to 18th)

A common theme runs through these commitments: the pursuit of high board performance.

The talks will explore several aspects of board practice including the board's role in strategy; emerging trends; the mechanism of corporate governance; and, the defining characteristics of an effective director and board. The learning workshop (entitled The effective director) is part of the Governance Institute of Australia's new capability development programme. The conferences are the European Institute of Advanced Studies in Management, in Brussels (I'm presenting a paper), and the Global Peter Drucker Forum, in Vienna.

In case you are wondering, there are still a few gaps in the schedule in each location for additional meetings. Please contact me if you would like to arrange a meeting while I'm in your area.

If you'd like to know more about any of contributions, please get in touch. (Note: As is my normal practice, conference summaries will be posted on this blog soon after each event, so do check back if you are interested).

Published on: 18 October 2017

Hitting the nail, squarely, on the head

Bob Tricker just did it again.

Long the doyen of corporate governance (Sir Adrian Cadbury used the term "father of corporate governance"), Tricker has just posted this article, a stinging critique of several emergent ideas that, through repetitive use, have permeated thinking and are becoming accepted as conventional wisdom. Risk, culture and diversity are singled out as populist memes. Yet robust evidence to support the notion that any of these memes are directly contributory to effective governance—let alone company performance—in any predictable manner is yet to emerge. Tricker's timing is, once again, exemplary.

Thankfully, Tricker offers far more than a straightforward critique. He reminds readers that the purpose of the board of directors is to govern:

The governance of a company includes overseeing the formulation of its strategy and policy making, supervision of executive performance, and ensuring corporate accountability.

The purpose of a profit-oriented company is also made clear (a point famously made by Friedman):

To create wealth, by providing employment, offering opportunities to suppliers, satisfying customers , and meeting shareholders' expectations.

In calling out this matter, Tricker has hit the nail on the head—the effect of which is to place those motivated by the promulgation of unfounded memes in a rather awkward position. I am with Tricker; our understanding of corporate governance needs to be reset. Rather than pursue new memes (a perfectly adequate definition was established over fifty years ago), boards need to discover how to practice corporate governance effectively. Tricker (Corporate governance: Principles, policies and practices), Garratt (The fish rots from the head) and a few others provide excellent guidance as to how this might be achieved.

(Disclosure: The two books named in this article are the ones that I refer to most often when working with boards. I commend them to you.)

Published on: 8 September 2017

Developing capable directors, in Sydney, Australia

The effectiveness of company boards has become a hot topic in recent years, especially as the general public has become aware of various failures, missteps, poor practice, hubris and ineptitude, but also as attention has increasingly moved from the chief executive to the boardroom in search of high company performance.

The role of the company director is not for the faint-hearted. Market forces, technical innovations and human factors all contribute to a complex and dynamic operating environment. Directors need to consider and make sense of information from multiple sources, and make informed decisions in the best interests of the company. It goes without saying that directors and boards need to maintain a continuous learning mindset if they are to keep up to date and contribute effectively.

In a few days, I'll be in Sydney, Australia (18–20 September), to work with directors committed to the ideal of high performance. While the main objective of the visit is to present the first day of a new three-day course entitled "The effective director", I have time available to attend other meetings to share ideas and discuss emerging trends in corporate governance, strategic management and related topics of interest.

If you'd like to get together while I'm in Sydney, please let me know. I have some free time and would be delighted to meet informally over coffee, or in a boardroom setting with you and your director colleagues.

Published on: 27 July 2017

Reflecting on governance: Are we getting ahead of ourselves?

Corporate governance has had a bad rap of late. From not even rating a mention twenty years ago (my father, an experienced company director, had not heard of the term until 2001), the term has become ubiquitous, hackneyed even, to the point now of being conceived (blamed?) variously as a perpetrator or panacea for all manner of corporate ills and missteps. Further, a bevy of related terms has emerged; an industry in and of itself.

One especially troublesome 'related term' that has emerged in recent years is 'governance professional'. What does it mean, and to what or whom does it refer? I put this question to a professional associate recently (a highly experienced director, chairman and board consultant). His answer, delivered without pause, was telling: "A company director, of course". After a brief pause, he asked why I'd posed the question. I related a couple of stories, of recent discussions including one in which the other party asserted that company secretaries and corporate risk managers are both 'governance professionals'. My colleague interjected asking, "Really? Aren't they getting ahead of themselves?"

Let's consider this in the context of another sector and look for parallels. Take healthcare. Doctors and nurses are universally understood to be healthcare professionals—clinicians who serve patients' healthcare needs in pursuit of physical and mental wellness. But what of receptionists, administrators and practice managers? These people make important contributions to the delivery of healthcare in a supporting capacity. But organising appointments, processing paperwork and supporting clinicians is not the same as delivering healthcare, the threshold for the 'healthcare professional' moniker.

How might this example inform our understanding of troublesome term 'governance professionals'? First, let's acknowledge that corporate governance describes the work of the board. We know this from Richard Eells, the person who first coined the term (the structure and functioning of the corporate polity), and Sir Adrian Cadbury (the means by which companies are directed and controlled). Given corporate governance is something that occurs in the boardroom (i.e., a board-activated mechanism for coordinating knowledge and making informed decisions in pursuit of the long-term future of the company), my professional associate's reply (that a company director is a governance professional, but the roles of company secretary and risk manager are not) seems plausible. What do you think?

Published on: 26 June 2017

Speaking engagement in London

This is a brief note to advise that I will be in London next week, to speak at the ICSA Annual Conference. The conference is being held at ExCeL, London, over two days (4–5 July). Programme details are available here.

I'll be speaking on the first day of the conference, at 12noon. My topic is strategy, from the board's perspective. Here's the session summary from the programme:

Good strategy vs bad strategy
Often in business, boards confuse lofty ambitions, challenging goals and enticing vision with strategy. Good strategy encompasses these elements but also offers a compelling road map to achieve goals and overcome barriers to success. Here we look at some of the key points to consider when establishing strategy.

Sound interesting? Come along, I look forward to meeting you.

Note: I'll be in London Monday 3rd to Thursday 6th inclusive, with some free time both during the conference, and immediately before and after. Please get in touch if you'd like to meet up (day or night) to ask a question; discuss an aspect of corporate governance or strategy; learn more about my research on boards and business performance; or, simply have a chat over a coffee or a drink. I'd be delighted to hear from you.

Published on: 12 May 2017

Closure

Monday 8 May 2017 shall, in our household anyway, be remembered as a significant date. It was on this date that a father and a daughter both crossed the stage to receive recognition for their respective achievements.

Megan: Bachelor of Business Studies, majoring in International Business
Peter: Doctor of Philosophy, in corporate governance and strategic management

While the day was special for close family members in attendance, the awarding of academic credentials is by no means an endpoint. Rather, it marks a weigh point on a long-term journey. The priority for Megan now is to build her career in international business, marketing and customer service (get in touch if you have an opening for a willing and able staff member). I will continue to encourage boards and directors to focus on what really matters: fulfilling their responsibility for company performance.

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