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    It's not working. But why is nobody talking about it?

    Guest blog: Tim Sillay (Wellington, New Zealand)
    I'm angry. It appears that as a society, we are hell bent on eliminating risk. There doesn't appear to be any sensible discussion on acceptable levels of risk, witness the current implementation of the health and safety legislation. When you see a site board on a building site list 'uneven ground' as a hazard, it is obvious that things have become seriously retarded.
    Now I'm not saying we should stand idly by and watch people bury depleted uranium, or leave boxes of dynamite laying around school playgrounds, but these futile attempts to wrap the world in cotton wool are breeding entire generations with no ability to assess or manage real world risk. What it is breeding is an entire generation of 'non-producers', paper shuffling bureaucrats whose job it is to police this whole mess.
    Let's face it, we've cut down all the trees in the playgrounds and removed all the really fun playground equipment, so little Johnny has no idea that walking on a slender branch will eventually result in hard contact with mother earth. You can't play bull rush or ball tag, so he also has no idea that fast moving people or things really hurt when they hit you... How are you going to figure practical application of geometry if you don't live the dream of 'tangent to the arc' on the witch’s hat? How do you figure out that some kids are better at sport, some are better at math and some are just plain stupid if everyone gets a certificate for participation.
    So by the time Johnny has completed his tertiary education and graduated with real world skills in something like coffee making, subsequently sued his employer for allowing him to come into contact with a hot cuppa and taken a nice safe office job as a health and safety inspector in an egalitarian agency where everyone has an opinion and everyone’s opinion matters, little Johnny, with no ability to judge what is and is not a real world risk, with no concept that someone may be smarter, more experienced or just plain crazy is the man who may eventually rise through the ranks and craft policy.
    With no one to argue the toss, the policy pendulum has swung firmly to the outer limit of 'no risk is acceptable' and 'all people are equals'.
    Which is patently ridiculous. This is just not the way the world works. This is what happens when as a country, you stop producing things. You lose the generational memory and experience of what it means to balance risk and reward. You forget that some people are good at thinking about stuff and some people just like to do stuff. The western world would not exist if it was settled under this legislation. When the thinkers start mandating to the doers, or the doers revolt against the thinkers, when you reach a point in the development of civilisation where no injury, code violation or upset feelings shall go unpunished, you are, quite frankly, fucked.
    But here I find a startling double standard. Let's start with a Saturday evening some three weeks ago when I received the unsettling news that a wonderful lady and long time acquaintance of ours had been murdered by her friend. Shock, disbelief, anger but most of all a sense of a grand imbalance in the fabric of the world. How can such a gentle girl have met such a violent end? What possible sequence of events led to this? How did we as a society so obsessed with the elimination of risk let this happen? 
    And there it was, that of which we shall never speak, our old bed fellow mental health. Over the last 30 years as we moved inexorably towards this sham world of universal acceptance, equality, tolerance and non-productivity we forgot that crazy people are actually crazy.
    Somewhere, in spite of all the signs to the contrary, we forgot all about unacceptable risk. I fail to see the chain of logic symbolised by these responses:
    • "It's not polite to incarcerate."
    • "This simply will not do."
    • "Let's tear down Kimberly, Kingseat and Lake Alice."
    • "You weren’t yourself when you did it."
    • "Be a good boy, take your drugs and hangout downtown shuffling through rubbish bins."
    • "What possible harm can you do."
    Somewhere, the policy wonks ran riot over the doers, those who lived the reality of day-to-day life with the insane.
    I can hear the sharp intake of breath. I can hear the agonised humanitarian wails of "You can't say that". I can even hear the bean counters rationalise it on a cost basis. I bet if you listened carefully, on a quiet day where the wind is blowing in just the right direction, you'll find an actuarial report that rationalises the occasional damaged child or other collateral damage about a crazy person gone off the rails.
    But you'd better be whispering. We NEVER discuss this kind of thing in polite society.
    So here's a brief history lesson. Teenage Suicide. It was a bloody epidemic in the 80's. I lost several from the circle and it hurt. It hurt a hell of a lot. Witnessing the grieving parents of a teenage girl will stay with me forever. It was more horrendous than the senseless killing of my friend by a crazy person, in as much as there is a scale for these things.
    It obviously was a problem, it obviously wasn't acceptable. So what did we do as a society? WE STARTED TALKING ABOUT IT.
    So I applaud the news that Coroner Michael Robb is conducting an enquiry into mental health related killings. Long may it make front page news. Maybe, just perhaps, this senseless, vile, unfathomable thing is the point where we all cry ‘enough’.
    Guest blog: Tim Sillay (Wellington, New Zealand)
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    Downtime is great for relocating your True North

    Busy-ness seems to be a fact of life for many people these days. Whether it is running between commitments, as a business person, as a parent or anything in between, downtime has become a precious commodity—one to be treasured and nurtured. Modern conveniences like unlimited wifi (including on some flights nowadays) mean we are never far away from activity and doing things that, in our own mind at least, add to our personal sense of worth.
    While busy-ness can be a good thing, more often than not sustained periods of busy-ness will lead to reduced effectiveness and possibly even burnout or breakdown. We get so wound up doing stuff that our world closes in around us, until we lose sight of 'why'—our True North. Loosing perspective is not good for us, or those around us.
    As a senior executive or company director with significant responsibilities, you no doubt have a busy schedule. How do you keep things in perspective to ensure that you are actually effective in your work? Do you have an anchor, a True North, and do you referencing back to it? ​​
    For me, downtime is the key to effectiveness—slowing the heart rate; getting away from people; taking time out to explore ideas (that would not normally even register on my everyday radar); and, in so doing, remind myself of what really matters, my True North. I do that by reading. Here's a selection of the books currently on my reading list. If you read as a means of maintaining your perspective, I commend them to you.
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    PS: What you do to keep track of your True North doesn't really matter. Go for a walk, paint, read, sew, draw or whatever else takes your fancy. That you are taking time out from the busy-ness of life is what will make the difference to your effectiveness—as paradoxical as that may seem. 
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    On the director–shareholder relationship

    It had to happen. Someone just asked one of 'those' questions. Should boards of directors communicate with shareholders? Great question Lex Suvanto! You can read his blog post here. Amongst his comments, Suvanto makes two quite startling observations: 
    Many directors are passionately against the idea of engaging directly with shareholders.
    Directors also correctly point out that the board should not say anything out of step with management anyway, so they question the value of this effort, especially given limited available time that directors can devote.
    These observations, and others in the article raise important supplementary questions about how boards conceive their role and the mindset of directors—including these:
    Ultimately, appropriate responses to these questions are straightforward if boards understand the statutory framework and directors have a clear understanding of both why boards exist and what boards (should) do (i.e., corporate governance).
    ​Directors are appointed by shareholders to ensure the effective operation of the company, in accordance with shareholder wishes (whatever they might be). If the senior-most decision-maker in the company is the board, is it not reasonable to expect the board to both understand what the shareholders want from their investment and subsequently provide an account to those that put them there? I think so. Suvanto's article contains some helpful suggestions to get started. I'm available if you want to chat further.
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    On boards, #Brexit, bravado...and reality

    News emerged today that many FTSE 250 company boards had made no contingency plans for a possible #Brexit decision. As Alice Korngold notes in her article, this highlights serious deficiencies in relation to risk management, board process and board composition. Korngold is right to challenge boards on this exposure. But does Korngold go far enough? Most of the concerns expressed are framed in the context of a traditional understanding of boards and corporate governance: monitoring the executive and managing various risks.
    Directors carry important duties, to the company and shareholders. In addition to acting in the company's best interests, directors have an important responsibility to deliver value to shareholders (in whatever form might be agreed). This means that monitoring the executive and managing risks is insufficient. More is required. Boards also need to make important decisions to set the company on a path towards a desired future state.
    An increasing percentage of directors say they are involved in strategy (read the surveys), suggesting boards do take their responsibilities seriously. However, observations of boards in session (i.e., board meetings) suggests that a gap exists between claimed and actual behaviour. Korngold's commentary adds to those concerns. That some boards are not performing the 'basics' of monitoring performance and managing risk adequately—let alone driving future performance—is problematic. What confidence can shareholders have that boards are considering strategic options and determining an appropriate strategy to achieve the company's purpose? The bluff and bravado that has permeated the discourse needs to be replaced with an authentic commitment to drive business performance. Is this too much to ask?
    Looking to the future, if the result of the British plebiscite does little more than motivate boards to take the future performance of the company more seriously, then it will have been a worthwhile exercise. Until then, Barton and Wiseman's observations are likely to remain—sadly—resoundingly accurate.
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    On diversity in the boardroom: A brief update

    The matter of diversity in corporate boardrooms has been the topic of much debate in recent years. Some people have claimed that the die is cast: that the presence of women (or some other group) in the boardroom leads to increased business performance. Others are less convinced. I have contributed to the debate on a few occasions, both as a panelist and in print. You can read some of my comments here and here, or use the search box to find other articles on diversity.
    While the debate goes on in the trenches, some commentators have begun to stand back, to offer a more holistic perspective. Jeff Jacoby, for example, has just written this article, published in the The Boston Globe. His balanced summary highlights various aspects of the debate. Two sentences stand out:
    "The evidence that more female board members means higher corporate profits is murky at best."
    "Either way, what no study has managed to nail down is causation."
    With these comments and others in the article, Jacoby has put his finger on the core of the issue. Board effectiveness (especially any relationship between board attributes and subsequent firm performance) is a complex issue. No one structure, composition or set of behaviours fits all situations (much less all companies). 
    Looking ahead, the challenge is two-fold. First, everyone who is interested and capable of making an effective contribution in the boardroom needs to be encouraged to offer themselves as a serious director candidate. Shareholders (or their nomination committees) need to work hard to find and appoint the best candidates—regardless of any physical attribute or notional diversity variable. The ability to govern well in the team environment must be the compelling basis of assessment. Second, the rhetoric needs to continue to mature, beyond the blunt instrument of observable characteristics to focus the subtleties of what actually matters—the capabilities of directors (individually and collectively) and the quality of boardroom interaction and debate as boards consider options; make strategic decisions; and, pursue performance goals in the context of the agreed purpose of the company.
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    Board effectiveness is possible and sustainable

    Several months ago, the editors of Ethical Boardroom contacted me to write another article for their magazine. Previously, I'd written articles on governance issues in New Zealand and Australia and accountability; and, provided a commentary piece on internships. Given a free reign (within the bounds of editorial deadlines), I agreed to share some observations about the boards of social enterprises and, in particular, explore board effectiveness—all based on recent experiences in boardrooms and with members of social enterprise boards. The article is now available here.
    The commentary, which has generated considerable interest and feedback—including amongst directors and boards of profit-seeking companies—suggests that the 'secret' of effective board contributions lies in board members looking ahead and working together towards an agreed goal.  My doctoral research bears this out: the board's ability to exert influence from and beyond the boardroom (including over firm performance) seems to be contingent on the board maintaining a close involvement in strategic management, and a few (I found five) characteristics of directors and social interactions being expressed as the board does so.
    If the large number of people that have already seen the article and asked questions is any indication, the topics of board effectiveness and sustainable business performance are of great interest. The feedback has been gratifying. Thank you. If you want to learn more about board effectiveness; the underlying 'performance' characteristics of boards; or, how to embrace a high performance board environment, please get in touch.