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    Inflection points: The times, they are a changin'

    Accountability Corporate Governance Governance Research Tough Questions
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    Have you ever thought about the arc of your career, and how things change over time—not only preferential changes, but societal and technological changes too?
    My first university degree (a bachelor with first-class honours in computing technology, manufacturing systems and management science) marked me as an engineer, of sorts. But five years into my work career, I was invited to set the programming skills down and to take on a ground breaking project. And I did, and it was good. Sales, leadership and international business development roles followed. Then, in 2001, I stepped away from an executive career having realised a preference to become a consultant or advisor. This, and a post-graduate diploma in business that followed, saw me re-marked, as a social scientist. Most recently, in 2016, I completed a third tranche of study, this time a doctorate, in corporate governance and strategy, to support my passionate interest in helping boards govern with impact and realise organisational potential. Retraining and continuing professional development has been a constant thread through my career since I first graduated from university.
    Clearly, my professional preferences and interests have moved over the arc of my professional career. And technology has too. Telex machines were de rigueur when I got my first job, but the onset of facsimile machines saw telexes and their operators cast off. Later, email replaced internal and postal mail. The arrival of the Internet, smart phones, and apps changed everything again. Jobs commonplace in 1984 simply do not exist any more, and untold numbers of new job titles have appeared too.
    Today, humanity stands on the cusp of another change: a transition some say will be transformation, a paradigm shift, in a Kuhnian sense. The emergence of artificial intelligence (AI), and its application to routine tasks (notably but not only administrative and repetitive tasks), portends the demise of a whole swathe of roles, just as jobs entitled telegram runner, mailroom sorter, and telex operator have been consigned to the annals of history.
    One area where the onset of AI strikes close to home is administrative support for boards: the role of company secretary (or, board secretary)—that role that helps prepare board agendae, record minutes of meetings and ensure various compliance items are attended to. I've been trialling Zoom's AI companion (a meeting recording system), Microsoft Co-pilot and a few other tools to document conversations. The results are astounding. Now, I am wondering whether [human] secretarial support will be required in the boardroom in the near future, for the quality of the outputs from AI tools is already pretty good. 
    Assuming these tools continue to get better, which they will, what of all the people who have trained as board/company secretaries (or the modern moniker, governance professional)? Might these people now be standing at an inflection point, even on the cusp of obsolescence? Or, will boards still need a human to check what is written and what is prepared? 
    I'd really appreciate hearing your thoughts on this, especially company secretaries and governance professionals, for whom the onset of AI has the potential to completely disrupt career choices.
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    Making space, to grow some more

    Accountability Corporate Governance Director Development Effectiveness Monday Muse Performance Tough Questions
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    I have been watching the leaves on a potted plant go a little yellow in recent days. Something is not right; the plant has been suffering, clearly—but why? Had I been over- or under-watering it? Or have I applied the wrong amount of fertiliser? After checking with sources more knowledgeable than me (a book in my library, but also Google), the penny dropped. The plant had become root-bound, a victim of its own success. Simply, the pot had become a constraint. The resolution? A bigger pot, to provide space for the plant to thrive once more. Now, we wait.
    Boards and companies are analogous to the pot and plant in this illustration. The pot holds the plant and provides space for it to thrive and grow. Sometimes, a new pot is the change needed if the plant is to thrive. And so it is with companies: sometimes changes are needed at the board table to reinvigorate decision-making, steerage and guidance.
    Whereas plants tend to droop, go yellow or otherwise signal poor health, tell-tale signals that it might to be time to make adjustments in a boardroom tend to be visible too. Examples include:
    • Directors no longer ask probing questions—or any questions—indicating they may not have prepared adequately or simply lost interest.
    • Director expertise no longer matches that required to properly assess performance, hold management to account, or consider investment proposals.
    • The company ‘out-grows’ the director, especially in relation to complexity and required expertise.
    • One or more directors start behaving erratically, including non-attendance.
    • Relationships amongst directors or with management become fractured.
    • An action or behaviour leads to a loss of trust.
    • Emergence of conflict amongst directors.
    • Directors starting to 'die on the vine' (long tenure).
    • Strained relations with powerful shareholders (especially relevant in closely-held private companies, family businesses and PE-owned firms).
    While this list is far from exhaustive, it is indicative. Notice many of the signals (that a director is out of their depth or no longer fit to serve) tend to be behavioural. But how might any shareholder or supernumerary know the real situation given boards tend to meet and operate behind closed doors? Something might seem to be amiss, but what, and who?
    A governance assessment (note, not a board evaluation) can be a useful tool to assess the effectiveness of the board and the governance 'system', and to diagnose any underlying problems. These should be conducted annually, by a credible independent assessor. Recommendations emerging from such an assessment need to be taken seriously. Boards that dismiss evidence-based recommendations out of hand, or make cursory adjustments only (the "sweep it under the carpet and hope for the best" tactic), should take a good look in the mirror. The response is itself  a clue—defensiveness tends to confirm that all is not well. 
    When something doesn't quite seem right, check it out. Directors serve at the pleasure of shareholders, and replacement is always an option. Often, it is a very good option; sometimes, it is the best option. Normally, a simple majority is all that is required to both appoint and remove a director. To give the director the benefit of the doubt is rarely the best option. Finally, if a decision is taken to remove a director, act on the evidence quickly, but do so quietly. 
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    Back into (writing) gear

    Corporate Governance Decision Making Governance Language Research Tough Questions
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    Over the past couple of months, I have been deeply embedded in a pro-bono advisory engagement, and fulfilling several speaking and capability-building assignments—to such an extent that my writing has languished. Progress on Boardcraft stalled, and my last blog entry was back in May. But now, with those commitments in hand, I have surfaced to draw breath, scan the vista, and to begin writing again.
    Starting next week, I will pick up my pen (keyboard!) once more, to share my thoughts and observations on corporate governance, the board's role in driving organisational performance, and other topics that catch my attention. Expect a new muse some time on the first Monday of each month.
    As we get going again, may I ask a favour? Please tell me what you want to know about (as a comment to this post or via private message) and I'll do what I can to respond. This is a genuine offer to explore anything of interest—except if it is illegal or immoral, of course!
    For now, have a great weekend. See you Monday!
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    On commitment: how far will you go?

    Accountability Decision Making Family Business Governance Performance Tough Questions
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    Several times in the past year, I have been asked for advice, even to intervene, in situations where relationships between board members have become strained, or shareholders have fallen out—with each other or with board members—over differing expectations around returns and/or succession. Each situation has been both complex and demanding, for they involve people and human emotion.
    The following vignettes are illustrative of the types of things that can go wrong and the ensuing behaviours of various actors:
    • ​Four directors of Christchurch City Holdings Limited have resigned following a relationship breakdown with CCHL’s shareholder, the Christchurch City Council. Reports suggest the shareholder wanted dividends paid at levels the board thought was above what CCHL could sustainably provide. Despite considerable effort to resolve the matters, four directors have decided that the demands are unreasonable; enough is enough, and they have walked away. One, Abby Foote, is an esteemed director and Chartered Fellow of the Institute of Directors.
    • A large-scale family company has been experiencing some difficulties, and several ‘next generation’ leaders think the patriarch should step aside. The company has a long history of success and balance sheet growth, and it has enjoyed a positive reputation in the market. But now, the patriarch, who thinks he is still the best person to run the business despite poor health, has become a stumbling block. The sole independent director can no longer claim to be independent either, as she has been captured by the patriarch. Family members are frustrated, and company performance is languishing.
    • The shareholders of a business active in agriculture and forestry in two countries have found themselves at odds over the future of the business. The largest livestock unit has struggled to make a profit in recent years, and the trees on the main forestry block are reaching maturity. Some brave decisions need to be made to secure the future of the business. Some of the shareholders have sought advice from a consultant, and they seem to be comfortable with the advice (to harvest the trees to fund continued dividend payments that they have come to rely on), despite a clear conflict of interest (the consultant is a shareholder of a lumber milling business that stands to gain from the harvest). Other shareholders want to engage some independent advice and take a longer-term approach to sustainable performance and value creation.
    As is typical in board and shareholder matters, options are many and resolutions are far from clear cut. What options might a capable independent director consider in such circumstances?
    • Should they try all reasonable options (such as the CCHL board appears to have done), but reserve the option of resigning if a satisfactory resolution cannot be achieved; or,
    • should they steadfastly remain loyal to the shareholder who appointed them, even if they disagree and are no longer being effective; or,
    • ​should they continue to try to achieve a resolution having noted the duties owed and fiduciary responsibility, despite the risk of legal challenge and reputational damage?
    These are questions of commitment and duty. Directors need to not only recognise this, but consider options amidst ambiguity, and work within the constraints of the law and what is ethically acceptable. Essentially, these questions ask how far a director is prepared to travel, how hard they are prepared to work, how long they might prepared to wait before enough is enough. Are they prepared to make decisions that may be unpopular or even unpalatable, because such decisions are in the best interests of the company? Will they go to the ends of the earth, so to speak? Or does the preservation of reputation rank more highly than acting in the best interests of the company—essentially, will they bail when the possibility of reputational damage arises (as several directors of Wynyard Group reportedly did just before the company failed several years ago)?
    Directors would be well-advised to have asked themselves these questions before they accept an appointment. They should also be prepared to act (step away) if the thresholds they set themselves are surpassed, or if they no longer have the expertise or courage to act.
    Of the directors you know, how many possess the wisdom and maturity to act diligently, in the best interests of the company?
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    Your turn: crowdsourcing Musings!

    Accountability Corporate Governance Decision Making Governance Guest Post Readings Tough Questions
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    A few weeks ago, while facilitating a board masterclass at Naivasha, Kenya, I had the good fortune to see some local wildlife at close range. Some people consider walking in close proximity to wild animals to be dangerous, for it may portend harm or injury, but others embrace the activity with open arms.
    Thinking, that well-spring from which ideas and insights emerge, innovations are birthed, and humanity progresses and flourishes, is similarly polarising.
    One of the things I have been thinking about recently is quite selfish: What direction should I take my writing in 2024? Musings is nearly twelve years old (first entry was in March 2012, which coincided with my doctoral research efforts, and sharing of conference papers and articles). While the longevity makes it a rarity, my motivation has not changed. It has been to share thoughts on corporate governance, strategy and boardcraft; our place in the world; and other topics that catch my attention. Apart from the introduction of 'boardcraft', a word I coined in 2020, this overarching goal has remained consistent since day one.
    From humble beginnings, when entries garnered just a few readers, the blog is now widely read. Over the years, many readers have been graciously engaged in a discussion about a topical matter, or asked for help to realise potential. And that has been wonderful, thank you. ​And, as you might expect, some entries have garnered high attention; others less so. Readers seem to prefer pragmatic guidance over provocations or calls to think more deeply about something. Recent examples of the former include writings on questions, chairmanship, and storytelling.
    Now, as we stand on the cusp of 2024, my hope is that Musings remains relevant and useful into the future. And with that, may I ask a favour? (Actually, provide an opportunity, to crowdsource Musings!) 
    What topics and style would ensure Musings remains relevant and useful as it moves into its teenage years? Do respond in the comments block below, or send me an email. And, thank you in advance.
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    Taking time to read and to think, to re-charge

    Accountability Change Decision Making Leadership Performance Readings Tough Questions
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    Twice this week, I have been asked about my reading and thinking habits. One enquirer wanted to know much time I spend reading and pondering insights garnered from various authors; the other whether I schedule [slow] thinking time. 
    Although neither asked explicitly, both enquirers seemed to assume that quiet time and the notion of reading widely are important to me. And, indeed they are. But, why?
    The practice of reading serves, I think, two inherent objectives: to maintain currency with trends and developments, and to become a better person. The objective is not to become a technical expert capable of regurgitating data and ideas (ChatGPT can do that), but a more holistic thinker—one who discerns problems and opportunities, considers them from different perspectives, asks appropriate questions and draws relevant conclusions. More succinctly, someone who leads a reflective life.
    May I propose something? To philosophise is to breathe. In my experience, and that of others who I have been fortunate to interact with, the ideas that emerge from the practice of philosophising provide a solid foundation for that which follows. And yet many business leaders and board directors claim to be too busy to take time to ponder (think about) possibilities that might lie below the surface or around the corner. Quite why such a (seemingly) bedrock activity is neglected is a curiosity to me; high quality thinking is an antecedent of effective leadership and governance, n'cest ce-pas?
    When people I interact with, especially friends and clients, say they see a better me (someone who is on top of his game, is nice to be around and who offers relevant and considered advice), such observations tend to coincide with a period of reading literature (or other so-called 'brainy' books) and thinking deeply about the questions posed by the authors. While comments like this are gratifying, they serve a higher purpose: to remind me to make time, regardless of what else is going on around me.
    (And, in case you are wondering, my answers to the enquirers were, "About 12–15 hours each week" and, "Yes.")