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    ICMLG'15: Board roles in SMEs

    Conferences Governance Performance Research
    Wafa Khlif, a Tunisian professor working at a French university in Spain (Toulouse Business School, Barcelona), presented the results of recent research into boards in small–medium enterprises (SMEs). The purpose of the research was to understand how boards work and the role they play in the governance of SMEs. 
    The research suggests that boards perform different roles in organisations, from that of an entirely passive bystander (she uses the wonderfully descriptive term, legal fiction) through effective cooperation to that of a dominant bully. However, most of the research has investigated large and typically publicly listed firms. Precious little research has been published on SME boards, until now. Khlif interviewed 26 directors and chief executives of six Tunisian-based SMEs over a two year period.
    All four of the important roles of boards that had been identified in larger firms—control, service, strategy and mediation—were also apparent in smaller companies. However, no single combination or arrangement of the roles was apparent. As with larger companies, considerable variation in the way boards work, and their purported dynamism and impact on firm performance (as claimed by interviewees), was apparent in the interview data that Khlif and her colleagues collected and analysed. However, some combinations of roles that are more common in larger firms (the watchdog, for example) is not so common in smaller firms (where the owner is more likely to be directly involved as a director and/or a manager).
    The framework that Khlif and her colleagues developed as part of their research shows how the important roles can "fit" together in SMEs, and the types of background factors (firm complexity, ownership span, amongst others) that might influence how the roles are performed are identified. However, the research did not explore the link between board roles and business performance.
    From an academic perspective, this research provides support to the idea that the role of the board cannot be adequately explained by a single theory. It provides strong guidance for practice as well: boards and board situations are all different, so forget about 'best practice' cookie-cutter models. Therefore, owners and boards that ignore the organisational context when boards are being established or reviewed do so at their peril.
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    ICMLG'15: Crucial attributes of successful entrepreneurs

    Conferences Performance Research
    Bob Perkins of Mercer University, Atlanta, has been studying leadership and entrepreneurship for many years. His recent focus has been on leadership theory and the discovery of essential tasks that entrepreneurs need to accomplish during the start-up phase of the business lifecycle. This work is necessary because many of the classical leadership models do not fit the start-up situation that well.
    In his work to date, Perkins has identified three essential start-up task behaviours:
    • Article a clear and compelling vision
    • Build brand identity and image
    • Assemble a capable team
    Perkins' delivery was polished and his material interesting. However, I came away wondering whether these tasks are actually any different from that the leaders of larger enterprises need to perform. Then the penny dropped. The CEO of Coca-cola does not need to develop a brand identity, that work is already done. Perkins was quick to qualify his work as being at a preliminary stage, and that further analysis may see some adjustments and refinements. I look forward to following Perkins' work. If he can confirm the essential tasks, and form them into an entrepreneur-specific leadership model, the implications for commerce could be quite significant.
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    ICMLG'15: Day 2 keynote

    Conferences Leadership Performance
    Well, Day 2 has started with a bang! Andrea Thompson, Managing Director of Catapult a leadership consulting practice, delivered an inspirational message about leadership; the essential place of leadership in great organisations and the hidden sources of success. Thompson suggested that organisations have a backbone comprised seven elements:
    • Vision
    • Strategy
    • Leadership philosophy
    • Purpose
    • Values
    • Brand
    • Story
    Thompson also suggested that the nature of leadership needs to change, because the world we live in is changing. Paradigms and structures that have served well in the past may not work in the future. Thompson proposed that leaders must possess a new portfolio of skills and attributes if they are to lead effectively in the future: 
    Backbones can be well-developed (and provide strength), or poorly developed. Crucially, all seven elements are well-developed in effective organisations. Effective leaders know this: they seek to achieve strength all the way up and down the organisational backbone. Purpose is intentionally positioned at the centre: this is the starting point—everything else builds on and from purpose. Effective leaders start with purpose, to discover why organisations exist (cf. what they do, which is management talk). She then worked through the other elements of the backbone and linked everything back to purpose. Her stories and examples were quite insightful.
    • Contextual awareness
    • Conceptual thinking
    • Agility
    • Collaboration
    • Diversity
    • Purpose
    • Autonomy
    • Unique beings
    • Environmental stewardship
    Thompson then moved on to discuss how leaders lead. She suggested that great leaders tell stories, their own stories. They tell life stories; they tell stories about important or significant moments; and, they tell stories about other people. And if they tell stories well, people listen and they believe. Effective leaders give hope. Thompson set a great platform for a busy day of presentations and discussions. If the discussion over coffee was any guide, she left a great impression on the audience. 
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    ICMLG'15: Day one wrap

    Conferences Ethics Governance Language Leadership Management Performance Research
    The first day of ICMLG2015 has been completed, with a very pleasant dinner cruise on Auckland Harbour. The three-hour cruise gave delegates time to enjoy the view back to the city across one of the world's great harbours; to get to know each other better; and, to reflect on the conference to date. The conversations were upbeat—both for the venue and logistics (thanks AUT and Massey) and the topical nature of the presentations and discussion on Day 1. The following points provide the tiniest of glimpses into some of the conversations and thinking so far:
    • Is 'good enough' actually good enough? Many academic researchers pursue high degrees of precision, whereas most consumers (business leaders and boards in this case) are happy to gain insights and a general sense. Several of the delegates, encouraged by Phil O'Reilly's keynote, have openly questioned whether business schools should come down from their ivory towers. Good stuff!
    • Can we go faster? Research needs to change gear, to get ahead of the curve. Instead of reporting what has occurred, researchers need to provide guidance for leaders and for board practice, to explain what can happen to business performance if certain activities or events occur.
    • Does the researcher have a role 'within' the research? Much quantitative/positivist research has the researcher as an external bystander, whereas qualitative/interpretivist research approaches often expect the researcher to position themselves 'within the research'. The risks of the latter are many, but the relevance of much of the research produced by the former is questionable. the research agenda needs to move beyond simply counting things or describing things. I think a middle ground exists. However, explanatory research inspired by realism is not well understood in business schools—yet.
    • The chasm between business and research simply must be bridged. That many businesses do not think of contacting business schools to commission research is an indictment on business schools, not business. Business researchers need to possess business experience and acumen, so they know what they are looking at when they investigate business phenomena. More work—much more—is needed on this score.
    • Are business researchers tantalisingly close to a breakthrough? Thomas Kuhn (The structure of scientific revolutions) spoke about this decades ago. Much research simply builds, incrementally, on what has gone before. Assumptions are reinforced, myths perpetrated and are mistakes legitimised. However, every so often, a step-change occurs. Kuhn called it a paradigm shift. Several of the delegates think that business research—and board and governance research in particular—is on the cusp of such a paradigm shift.
    In addition, many new relationships were formed, ideas for collegial working groups were discussed and several invitations were issued for cross-border and multinational cooperation. (Gosh, that sounds like the OECD or the United Nations!) I'm looking forward to seeing and hearing how the discussion builds and develops on Day 2, starting with Andrea Thompson's keynote.
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    ICMLG'15: Breaking to mould—new perspectives on executive development

    Conferences Language Leadership Performance Research
    Dorothy McKee, University of Ulster, Northern Ireland, presented a fascinating paper that explored the extent to which executive development (read professional development for executives) that focusses on leadership, governance and business ethics has a positive impact on business performance.
    The research was insightful, for it bridges the oft-discussed chasm that exists between academia and practice. Courses bathed in research rigour and practical application are far less common than you'd expect. I have been critical of the way many academics happily resist any activities that might see them becoming tainted by 'the real world'. Yet McKee walked right into the centre of the issue, and intentionally so, to try to gain some understanding as to what is really going on and what needs to go on to ensure executives are appropriate equipped to to lead and direct well. She surveyed and interviewed a group of business executives who are also graduate business students (Masters level). The findings were very revealing:
    • Leadership is a key feature that differentiates effective from ineffective boards, and collaborative leadership was particularly important
    • Many executives believe that gender balance has a positive impact on leadership decision-making, event though the research does not categorically support this perception
    • Effective interpersonal relationships are crucial to optimise the workings of the board (read: board processes and practices)
    While none of these insights were particularly revolutionary, they reinforce the "I think this is correct but can't put my finger on it" perceptions held by many working directors and business executives. The insights provide great guidance for professional bodies (including the Irish Institute of Directors) to inform the development of their professional development programme. They also speak volumes to academics, to get busy and to produce some meaningful theory-based models and frameworks to support the emerging perceptions of skilled and insightful executives.
    Given the overlap between our research interests and professional backgrounds, McKee and I plan to get together in a few months time, and advance these ideas, with a view to developing some new professional programmes for working directors. If you are interested in learning more, including the possibility of becoming an early adopter, please contact me.
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    ICMLG'15: the state of corporate governance research

    Accountability Conferences Governance Performance Research
    James Lockhart, of Massey University, presented the results of an investigation he undertook, to understand what the research community has added in terms of knowledge about corporate governance in the last two decades. He did this by re-reading every issue of the top corporate governance journal (entitled Corporate Governance: An International Review). Over the 22 years since the first issue, 782 papers have been published (totalling 11,063 pages!). Lockhart has reviewed all of them, categorised them and done some analysis.
    Sadly, his findings provide little comfort for the research community. They also challenge many of the commonly-held 'maxims' that have defined the commentary of belief system about the phenomenon:
    • There is no unifying theory—simply put, we don't have a common understanding of what corporate governance is or does
    • There is no coherent research agenda.
    • The rate of progress (of research) is perhaps best described as 'plodding'.
    • There seems to be a fundamental failure amongst researchers to understand the motivation of business.
    • While most researchers claim 'agency theory' is the dominant theory, the reality is quite different: Approximately 42% of the research is based on agency theory. The rest is fragmented across five or six other theoretical frameworks.
    • Only 21 of the 782 papers even attempted to attribute causality or approach the subject of prediction (that if boards do X, then the likelihood of performance outcomes is Y).
    Gosh, this is a real indictment. It's little wonder that boards are reluctant to admit researchers to boardrooms to undertake research. Researchers are producing outputs for sure, but the queue of companies and directors waiting to consume the findings because they are relevant is remarkably short.
    Lockhart's verbal summary was consistent with my own findings: that much of what business schools produce is of questionable value. If the research agenda is to be advanced in any meaningful way, then a whole new approach is not only warranted, it is crucial.