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    On changing the face of local government...

    Governance Societal Wellbeing Strategy
    Have you ever wondered how the money paid to local councils is spent? Or, more importantly, whether it is spent wisely? These are important questions of governance. Many column-inches have been written on these questions over the years. However, I continue to be troubled by these questions because, on the surface, there is much wastage, and that wastage is inhibiting economic development and improvements in societal well-being. Here's two examples from New Zealand:
    • Christchurch, the garden city devastated by a series of major earthquake events: The City Council and the Regional Council have become engaged in an accusatory finger pointing battle which is paralysing progress towards the rebuilding of the city. Having two agencies overseeing the same geographical area—albeit with different remits—is hardly conducive to an effective, coordinated rebuild of the city.
    • Wellington, the capital city: The "city" is actually four cities (Wellington, Porirua, Hutt, Upper Hutt), all of which are separately governed with local council structures and costs. This piecemeal approach to local government has provided jobs for four Mayors, four sets of Councillors, four CEOs and four duplicated sets of staff and services. Oh, the wastage.

    These models—the two-tier agency model (City and Regional Councils) and the multiple-small-agency model (Wellington)—are hardly conducive to the cost-effective provision of infrastructure services. How can any city hope to be a strong and vital contributor an economy when there is bickering and fighting within? A body cannot hope to survive with two heads. A family (city) divided cannot prevail. The role of local government is local infrastructure. Far too much money is wasted on duplicated effort; and on middle management, communications and so-called consultants. Lots of activity (seemingly) but little in the way of tangible progress.

    Thankfully, moves are afoot to reform local government. Wellington looks like following Auckland's lead (of one civic agency), although agreement on the best model is yet to be achieved. A smaller, coordinated civic agency can only be good for economic growth and societal well-being. If less money is spent on excess and duplication, more money should remain in the pockets of local businesses (to drive growth) and citizens (improve their well-being). The face of local government needs to change—the finger pointing and power games have gone on long enough. 
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    On teaching and learning, undergraduate style

    Research Societal Wellbeing Teaching
    Today is the first Thursday I've had to myself since 14 February. I have been teaching 115.108 "Organisations and Management", a first-year paper at Massey University. This was my first teaching experience in an undergraduate environment, so I didn't really know what to expect. Would the students engage? Would they just sit there? Would they even turn up?

    Fast forward to today. The semester is complete, save the final examinations. Having now completed the assignment, I've learnt a lot—about myself, the students and the learning environment—so thought a few reflections would be in order:
    • Most young men and women are committed learners—if you encourage them, show them trust, and treat them as adults. The natural learning style of most adults is to share ideas and ask questions, a style I adopted this semester. In my experience, if you ask people questions, they will answer—surprise, surprise. In contrast, the standard modus operandi in a university context seems to be to lecture—a one-way transfer at best. I continue to be amazed that universities operate on the basis of broadcasting information in a lecture format. Is this conducive to effective learning?
    • I was stunned at the drop-off in attendance as the semester progressed. Attendance dropped by 50% over the course of the semester. Other Tutors said this was normal, and not to be alarmed or critical of my own effectiveness. I can't help but be alarmed. Were some students inappropriately enrolled at the beginning of the semester? Did the course and delivery not suit the learning preferences of the class? Were there timetabling clashes? Did the students get lazy? I don't have any answers to this one, but suggest university councils treat this as a real concern, as they grapple with their goals and seek to allocate limited resources effectively.
    • The ability of the class to think critically was well below what I expected. Our modern world is complex. We need leaders who think critically and make smart, informed  choices. I wonder whether the NCEA system, which dumbs down topics by separating the holistic subjects into parts, is to blame?
    • The assignment forced me to adopt a weekly rhythm, to ensure material was available and I was "ready to go" each week. But it was fun. I enjoyed working with a great group, most of whom were just embarking on the tertiary and professional careers, but can't see myself full-time in a university environment. The pace is too slow!
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    Should convicted directors be stripped of their honours?

    Governance Societal Wellbeing
    There was a development in the long-running Lombard Finance collapse saga today that has the potential to send shock waves throughout the establishment, in New Zealand and throughout the Commonwealth. Reports are emerging that Sir Douglas Graham, esteemed politician, Treaty of Waitangi negotiator, company director and knight of the realm may be stripped of his knighthood following a conviction associated with the collapse of Lombard. This is huge.

    Should honours recipients that are subsequently convicted through a judicial process have their honour stripped? On one hand, I applaud the New Zealand Government for considering measures to protect the status and sanctity of the New Zealand honours system. On the other, the knighthood related to Sir Douglas' services to New Zealand, rendered over many years, as I understand it, prior to the Lombard debacle. 

    UPDATE 31/May: Yesterday, when I first posted, I fence-sat on this issue. Today, having read several commentaries and thought more deeply, my view has firmed in favour of stripping the honour. One is stripped of rank as a consequence of guilt in a military system, both as a punishment and to defend the honour of the rank. The civilian system is constructed on the same principle. Guilt and consequences should go together—always—lest justice no longer be consistent, fair and blind. What do you think?
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    The Independent Chair: what is going on?

    Governance Performance Societal Wellbeing
    I'm a strong believer that function trumps form, especially in matters of governance. However, I maintain a close watch on trends in research and practice, because things can change, and one needs to maintain an open mind. A case in point is that of the Independent Chair, a trend that has been developing over the last decade or more (actually, since the 1992 Cadbury Report), which appears to have hit a speed bump recently.

    This week, an article published on the Pensions and Investments website reported that, in America, support for Independent Chairmen had declined in 2013, despite a "bumper crop of calls" for independent chairs. I was somewhat flummoxed by the information presented in the article. How can increased demand lead to fewer appointments? Is this a new trend, or just a one-off blip? Who is in control, or, more directly, who actually has the power?

    Corporate governance in America, as in other jurisdictions, appears to be awash with power games. Calls to separate the Chair and CEO roles appear to be founded on concerns that too much power is concentrated with one person. Yet that very power seems to hold sway. It's as if holding on to the 3P's (position, power, prestige) is more important than a fourth P—the one that actually matters —performance. When will Boards and shareholders wake up and act?
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    Boards of directors: is form or function more important?

    Governance Management Performance Research Societal Wellbeing Strategy
    Much has been made in the business press in recent weeks of the possibility of splitting the Board Chair and CEO roles at JP Morgan. Arguments for and against have been made, and now a non-binding shareholder vote is imminent. I can't help but feel disappointed by all this rhetoric, because arguments about Board form (structure) miss the point.

    For the last 40 years or more, researchers and practitioners have searched for "the ideal Board structure" through which high performance will occur. Despite considerable effort, attempts to produce an ideal structure, or explain how Boards contribute to business performance, have failed to produce definitive results. If we pause and reflect, this lack of clarity should not be a surprise. Governance is a complex, socially dynamic phenomena, not a predictable closed system or a mass of separable attributes. As such, empirical knowledge (of the past, or of form) cannot be used to credibly predict future performance.

    Rather than continue to argue over form (that is, argue over structural variables including Chair/CEO duality, gender diversity, non-executive directors), attention needs to move to the holistic consideration of governance itself, and what Boards do (how they function). Then, and probably only then, will we start to gain a clear understanding of how Boards actually contribute to business performance. But is that asking too much of the JP Morgan Board and other Boards? I guess time will tell.
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    Company directors: what are your real responsibilities?

    Governance Management Performance Readings Research Societal Wellbeing
    Two posts on corpgov.net have caught my eye this week:

    Together, these articles present a significant challenge to the corporate governance community, and company directors in particular. To most Boards, the purpose of the company is to achieve growth and to maximise shareholder value, period. But is this narrow focus appropriate? Does it help society, or does it add to its burdens?

    As I read the articles, I found myself thinking about the relationship between economic growth and societal wellbeing. You don't have to be a rocket scientist to understand that a narrow focus on profit or growth is a rather selfish win/lose strategy. Shareholders win and the rest of us lose. Is that fair? Perhaps Boards should be compelled to take account of wider societal factors as they fulfil their important role. What do you think?