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    The words we utter: Do they matter?

    Accountability Corporate Governance Governance Leadership Value Creation
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    As regular readers know, I read widely; topics I explore span (in addition to core themes of corporate governance and strategy) include philosophy, neuroscience, business, history, military strategy and more besides. I usually take notes, as an aide memoire for later reference. 
    Some articles are memorable, others less so. This one recently-published article piqued my attention because it reminded me of a question I face most weeks: "What do you do?" Most enquirers expect to hear a job title or a profession, to enable them to 'position' me, which is fine if the 'job' is a well-known profession or vocation, such as a doctor, teacher, plumber or lawyer. But what about a director, or an advisor? Is offering a one-word response helpful? Might it enlighten or obfuscate? 
    For those who understand the roles of director and advisor, one-word descriptors are adequate. But for others (the majority, even most?), the response is more likely to an awkward smile, as if to say, "I wonder what one of those is or does? Does he mean a company director, a movie director, an orchestra conductor, or something else?" or, "What is an advisor? It sounds like a fancy name for a consultant." What an unhelpful interaction!
    Clarity and simplicity are vital if we are to communicate effectively. And the effectiveness of what we utter—whether our message got through—is determined by the listener not the speaker.
    ​With this in mind, I try to read the person before answering. If they appear knowledgeable of business matters, I tend to say I work with boards, sometimes adding that I help them see around corners and govern with impact; an advisor. But if not, I say I'm a troubleshooter who works with business leaders, or something along those lines. One thing I never say: I'm a consultant—they are people who make decisions and implement things for others. I don't. Rather, I ask questions to gain insight and make suggestions. Whether the client takes up the advice or not is their decision. 
    So, returning to the headline question. The words we utter: do they matter? Yes, they surely do, if we are to communicate well. 
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    Checking the big picture: Are we still on track?

    Accountability Capitalism Complexity Decision Making Governance Leadership Performance Value Creation
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    The prospect of looking back on the year past at this juncture seems a little odd, even presumptuous, given five weeks remain in 2023. And yet, with the onset of the holiday season (Christmas, Hanukkah, Diwali, as relevant in your cultural setting), I have noticed minds are starting to turn; casual comments in my hearing indicate some people are starting to reflect on the year soon-to-be-gone; others upon what the future might hold.
    As someone called on to think broadly about organisational challenges and opportunities, and to share insights that might be helpful to helping boards govern with impact or realise organisational potential, I too, take time to ponder. To think about what has passed, what lies ahead, and how one can help is not only smart, it is vital—if one is to learn, make adjustments to stay on track and achieve goals and, over time, become a better person.
    Turn now to the person you see in the mirror. What did you set out to achieve in 2023? Did you set specific goals? If so, have you checked progress? Are you still on track? ​Have you taken into account changes in the environment around you and made adjustments, or have you pressed on in spite of changing circumstances? As a leader, you owe it to yourself—and all those you interact with—to check progress periodically and make adjustments if you have veered off track or lost sight of the goal.
    For the record, my goal for 2023 was audacious; to ensure every director and board I had the privilege of serving, globally, derived some benefit from the interaction. The goal was audacious because 'every' set a high bar; essentially, it left no room for slippage! Thankfully, feedback to date suggests I'm doing OK. Hopefully, the feedback still to come is consistent with that received through the year. If it is, I'll wrap up the year contented; tired but contented.
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    A journey, in thought and deed

    Accountability Corporate Governance Language Performance Research Rules Value Creation
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    When I was a boy, milk was free (I was raised on a dairy farm), but you could buy it in a glass bottle with a silver foil top (pasteurised but not homogenised) for four cents a pint at the general store. Television (once we got one, in 1969, to see the Apollo 11 moonshot) was a grainy, black-and-white experience, with a single channel available. You got to watch whatever the broadcaster chose to deliver across the airwaves.
    Now, milk costs several dollars a litre, but it comes in many different styles (blue, light blue, skim, lo-fat, full-cream, calcium fortified, lo-lactose and UHT—as well as products called milk that contain no milk at all, such as oat milk and almond milk, in a wide variety of packaging options). Television has changed too: from a take it or leave linear broadcast experience via rabbit-ear antennae, to a plethora of video-on-demand (streaming) options via the internet. 
    These are but two of thousands of examples that illustrate the onwards match of technology. Oh how life has changed, even in my lifetime.
    The onward march has also affected the way we communicate, not only personally with family and friends, but also with clients, suppliers and the general public as well. The notion of using a fountain pen to handwrite a letter, or making a toll call, seems quaint now—but some of us still value these moments. The emergence of social media has extended our reach in ways not thought possible twenty years ago. Sharing business cards, once commonplace, is now rare. If people want to contact me or learn about me, they tend check my LinkedIn profile (notice the assumption, that I have one), even before mentioning Google or asking about a website or blog. 
    And that brings me to the point of this muse, which is to share one aspect of a conversation with an esteemed company director, in the hope it might encourage others committed to serving the director community. Yesterday, I was asked about the role of social media in my business life, what channels I use and how long had I been using these. The first two questions were readily answered; the third took a little longer—because I needed to find the menu option!
    • Social media: LinkedIn is the only social platform I use. It complements my website and blog, as a forum to comment on topical issues, share articles written by other people and, candidly, reach boards and directors who make use of Linkedin as a trusted source of information. Previously, I used Twitter, but that did not last long for the platform was, I thought, little more than a soapbox for people to shout at each other. When I checked my LinkedIn profile, I was surprised to see I had first used the platform in July 2003, over twenty years ago and just three months after the platform was officially launched by Reid Hoffman!
    • Website: petercrow.com was first launched in November 2001, the month after I left paid employment and founded QuarryGroup, the global board advisory practice. Musings, the blog, came later, in March 2012. The websites were (and remain) online brochures, whereas the blog was created as a place to share my thoughts and test ideas while working on my doctorate. Since 2016, Musings has become a forum for a wider range of board and governance topics. Today, approaching 750 entries later, Musings is read widely, by a global audience.
    Thank you for permitting me to share my experience. I hope anyone considering using social media or a blog as a channel might be encouraged—not only to do so, but to stick at it over the longer term. My journey to date has been fulfilling; I have met thousands of people from many walks of life and, I hope, they have valued the interaction as much as I have.
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    Ten days in the UK & Europe: A snapshot

    Accountability Corporate Governance Diversity Family Business Leadership Research Strategy Value Creation
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    I have just arrived back in New Zealand, from ten days in the UK and Europe. My meetings with directors, advisors, academics, students and directors’ institutions had two primary objectives: to listen and to share. The listening aspect was to gain firsthand knowledge of issues and opportunities; the sharing aspect to provide updates on the craft of board work and my experiences as a practicing director.
     Learnings (a few immediate observations, in no particular order):
    • Directors say they are finding it hard to distinguish between signal  and noise—that which is material to monitoring and verifying performance and progress, and that which is, essentially, argumentation from stakeholders asserting preferences with only tenuous associations with sustainable performance.
    • ESG remains 'hot', although everyone I asked said the marketplace was fracturing. Acolytes are becoming more assertive, especially in their expectations that companies prioritise net zero, climatic change response, and equity above all else. Others are less convinced, as they are yet to see any increase in company performance or alpha. The gap between the groups is growing too—adherents have started using the 'anti-ESG' moniker, in an effort to claim the high ground. Detractors have not been silent either, saying the discourse needs to move away from what they describe as ideological fervour to pragmatism and common sense. 
    • Increasingly, directors are questioning whether quarterly board meetings (common in Europe) is actually a good idea. The directors I spoke with said they find it really difficult to keep up with compliance matters, much less contribute well to strategic items. The power balance leans reasonably strongly in favour of the CEO too.
    • Calls for optionality to be removed are becoming more commonplace. (Optionality meaning all directors of companies of substance should be required to be professionally qualified, in the same way as doctors and lawyers need to achieve and maintain a relevant professional accreditation.)
    • Geopolitical turbulence is front of mind (greater in Eastern Europe than Western Europe). The situation is exacerbated by economic headwinds and energy security concerns (think: gas and electricity supplies) despite Europe emerging from a mild winter. The UK and France (in particular) are also struggling with high inflation, strikes and, in France, a proposal to raise the age of retirement. Given the uncertainties, many leadership teams have shortened their strategic horizons and some have become quite defensive.
    • The Credit Suisse bailout by UBS unfolded before my eyes—I was in Zürich the day after the failure. Like many other failures, this one came as little surprise to insiders; the company has endured scandals and criticism for some years. (My early assessment: the board appears to have been asleep at the wheel.)
    • Directors continue to struggle with what corporate governance is and how it should be practiced. Sadly, the confusion observed during this trip is as widespread as in the past. Directors' institutions have a critical role to play, to clearly and straightforwardly assert what corporate governance is and, critically, what it is not. 
    Amongst it all, there were some gems:
    • ​Several directors spoke passionately about their work, and how efforts to engage more actively, with an underlying sense of purpose, is starting to make a difference.
    • Researchers are moving focus, from quantitative studies using public data, to trying to get inside boardrooms to observe boards in action (ie: the practice of governance).
    • Advisors to General Counsels, CEOs and SME founders have recognised a different conversation is needed to appeal to boards and directors. I was pleased to offer a few insights and suggestions.
    • I had the delight of delivering a guest lecture to forty or more researchers and students at Leeds Beckett University. The Q&A was fascinating—a candid exchange with people passionate about helping boards govern well.
    Several followup visits are now being planned, to advise, assess, educate and speak on topical board and organisational performance matters. If you want to discuss a matter of interest, or check my availability to assist, contact me for a confidential, obligation-free discussion.
    The headline picture, showing a derelict property in Soho, London, is analogous to the state of governance in many places in Europe: structurally sound but outwardly messy.  
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    Picking an adjective...

    Accountability Capitalism Corporate Governance Effectiveness Governance Performance Value Creation
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    When aiming to achieve something in business, is it better to be good, or effective, or both? ​Should boards for example pursue good governance, or prioritise effectiveness? And, are these qualifiers mutually exclusive, or can a board claim both? These 'challenge' questions have beset contemporary boards of directors, more so as various stakeholders have sought to impose their expectations and ideological preferences onto corporate values, purpose, strategy and decision making.
    If these questions are to be considered and answered well, agreement on the meaning of the adjectives is necessary. To wit:
    • 'Goodness' speaks to benevolence and decency—of doing the right thing. It conjures an ethical or moral motivation, of acting in the best interests of someone else. 
    • 'Effectiveness' is about producing an effect or achieving a goal, result or outcome.
    Instinctively, good governance sounds attractive. It satisfies a human condition; of doing the right thing and acting in the best interests of someone else (a particular stakeholder interest, for example). But what if doing the right thing has the effect of compromising the competitive position of the company; the achievement of agreed performance objectives; or, potentially, the viability of the company? And, what might be considered good by one person or group may not be upheld elsewhere. Turning to effectiveness, the threshold is more objective—either the goal is achieved or it is not. But, what if the pursuit of an agreed objective results in environmental or social harm, or some other negative consequence?  That is not acceptable either.
    Given the extremes, some sort of balance is needed, in the same way that every board must ensure conformance requirements are satisfied (compliance, value protection) and performance objectives are achieved (value creation). If this is reasonable, should a different adjective be used, to more adequately describe the value of the board's work?
    My recommendation: drop goodness and effectiveness, for one (at least) is highly subjective and has become emotively charged (think, what ESG has become), and the other focuses more on the goal without necessarily considering unintended consequences. Ultimately, in extremis, neither is sustainable without the other. Instead, boards should pursue enduring impact.
    Boards that strive to be effective in role without incurring social or environmental harms are more likely to exert a positive and enduring influence beyond the boardroom (that is, have impact). As a result, they should be well-regarded by shareholders and legitimate stakeholders as well. The Strategic Governance Framework offers insights to boards intent on realising the full potential of the companies they govern.
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    Ramping up, for the year ahead

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    And with little more than a blink, January 2023 is, nearly, done. January is, for me, a time to relax, reflect on the year past, spend time with family and friends, read and get ready for what lies ahead. 
    In the last ten days, things have started to ramp up again: international calls, my first board meeting for the year, and local enquiries—all indicators that minds are turning to board work and the pursuit of sustainable performance once more. ​Soon, I shall be travelling again too, in response to requests to discuss corporate governance, board work, and the role of the board in realising organisational potential.
    After a good break, I not only feel ready for what lies ahead, but excited at the opportunity to help boards and directors, academics and regulators grapple with some complex issues. The first three trips for the year are scheduled, as below—and planning is already underway for several more in the months to come.
    While events and engagements are being loaded into the diary daily, some gaps remain, mainly in Singapore and England. So, if you want to take advantage of me being in your neighbourhood, best to get in touch soon! If you want to talk or meet, but the timing doesn't suit, let me know anyway—there will be opportunities later in the year.
    Dates
    Location
    6–9 February
    Melbourne and Sydney, Australia
    12–15 February
    Singapore, Singapore
    13–25 March
    England, Scotland, Romania, Switzerland, Czechia