Conferences - Peter Crow | Helping boards govern with impact

Published on: 27 February 2014

Advancing governance research beyond correlations

A couple of months ago, I was asked to consider submitting a paper to the British Academy of Management (BAM), for presentation at the annual conference (in Belfast, Northern Ireland this year). The BAM conference is attended by over 850 delegates, from academia and the working world. Once I got over the surprise of being asked to contribute to such an esteemed conference, the challenge of choosing a topic loomed large in my mind.

The topic I have selected plays to the foundation of my current research work: that of finding a way to move beyond the limitations of the research methods that have been favoured by many governance researchers. Researchers are really good at counting and measuring things, but the process of digging deeper, to explain why something is as it is (in my case, how boards influence company performance) has proved to be much harder. The aim of the paper I have written is two-fold:

Challenge the foundational assumptions and normative input-output approach that has dominated the much of governance research agenda
Suggest an alternative approach to governance research, to enable the researchers to move beyond correlations toward the postulation of credible explanations and theories

The paper was submitted last night. The ideas in it are somewhat contentious, so it will be interesting to see how the paper is received, and whether it is accepted on the programme. Please contact me if you'd like a sneak-peak at the abstract now, or to be sent a copy of the paper after it is presented.

Published on: 20 February 2014

My multifaceted week: the life of a governance researcher

Please excuse my silence over the last ten days or so. I have been concentrating on several important research tasks and some family matters, and this has precluded me writing any musings. To give you an idea, here's a list of some of my activities from the last week:

Prepared for and observed the February meeting of the Company Alpha(*) board, to collect more research data.
Prepared for the next observation of the Company Beta board, to occur in a few days' time.
Attended a PhD forum, a new initiative run by Massey University School of Management to bring its doctoral candidates together from the three campuses for support, encouragement and technical assistance with the process of research.
Reviewed feedback provided by my supervisors, of the first substantive draft of the research methodology chapter that I sent them a couple of weeks ago.
Continued the refinement process of the methodology chapter, ahead of reforming it into a standalone paper suitable for submission to the BAM conference.
Hosted guests visiting from Belgium. Our daughter's host parents from her twelve-month student exchange to Flanders are on holiday in New Zealand at present.
Drove our daughter and her gear to Massey University (90-100 minutes drive north of our home), to start her tertiary career. (She's enrolled in the Business Studies programme, and will be living on-campus in one of the hostels.)

I'm hoping things will settle down a little next week, so I can finalise the BAM paper; spend some more time on data analysis; start thinking about the slidedeck for my presentation to the International Conference on Management, Leadership and Governance in Boston, Mass. on 20–21 March; and, resume normal transmission on Musings.

(*) Companies Alpha and Beta are the two companies who have provided me with access to observe their boards in action and collect governance data. Both are quasi-public, high-growth organisations of substance domiciled in New Zealand. Anonymity is a condition of research so all other information that may enable the companies to be identified is withheld.

Published on: 13 January 2014

2014: A big year ahead...

The first couple of weeks of January are usually a fairly laid-back affair in New Zealand. As a population, we tend to 'get away' after the hustle and bustle of Christmas. We camp, we get out on the water, we hike, we read, and we share each other's company over food and drink. Corporate offices and factories are usually fairly quiet, with skeletal staff keeping things ticking over until things get underway again, usually in the second or third week or the year.

One of my habits during the summer break is to think about the year ahead, to get a sense of where my priorities should lie. When I get back to my desk (6 January this year), I write my ideas down, make some choices and load important dates and deadlines into my diary.

This year the decision process was easy: my doctorate is the priority. Here's a snapshot of how my year is shaping up at this stage:

January: write methodology chapter for thesis; quick personal visit to Sydney
February: write paper for British Academy of Management conference; continue boardroom observations; finalise methodology chapter
March: speak at International Conference on Management, Leadership and Governance (Babson, Mass); continue boardroom observations; commence analysis of data
April: update literature review chapter; continue boardroom observations; continue data analysis
May: final boardroom observation; continue data analysis
June: continue data analysis; second round CEO & Chair interviews; finalise literature review chapter
July: complete data analysis; write paper for European Conference on Management, Leadership and Governance; short winter break
August: thesis writing in earnest; think about conclusions
September: speak at British Academy of Management (Belfast, Northern Ireland); thesis writing; assemble first substantive draft of thesis
October: finalise first substantive draft for review by supervisors
November: update thesis based on feedback from supervisors; speak at European Conference on Management, Leadership and Governance (Zagreb, Croatia)
December: complete final draft of thesis; submit thesis!

What does 2014 hold for you?

Published on: 12 December 2013

AUT governance symposium: reflections

I had the privilege of attending a corporate governance symposium in Auckland yesterday. The one-day symposium, hosted by Auckland University of Technology (AUT), was held in the recently opened Sir Paul Reeves Building on the main AUT campus. It's a great facility. Approximately 30 researchers and other experts, including several international speakers, gathered to discuss recent developments in the field of governance. Topics included ethics, performance, diversity, technology and remuneration. There were seven main presentations throughout the day, and twelve supporting papers (presented in two concurrent streams after morning tea and after lunch). Some of the main presentations are summarised below:

Thomas Clarke (University of Technology, Sydney) provided the opening keynote. He spoke about emerging challenges for directors, not the least of which is structural. While the four primary functions of the board are strategy formulation, policy making, monitoring and supervision and accountability (see, R. I. Tricker), most boards spend most of their time monitoring performance, a past-focussed, internal activity. The changing context of business requires that boards embrace change, lest any value that they are able to deliver is lost. This includes the adoption of meaningful (board performance) evaluation processes, embracing a greater level of diversity around the board table, and the gaining of a greater knowledge of the business being governed.
Vincent Naidu (VINCI Law) provided a sobering reflection when he spoke about the duties directors owe to shareholders and to the company, and the consequences of not fulfilling these duties. He suggested that nine out of every ten failures fall into the second category—failures by directors to fulfil their duties to the company. Most of the breaches can be described with one of four summary descriptors: responsibility transference; passing the buck; "it wasn't me, it wasn't me"; and, "it's all about me". Naidu reminded delegates that the word governance is derived the Greek word kubernao ("to steer"). Directors need to keep a watchful eye, and they cannot afford to fall asleep at the wheel. Sadly, many still do.
Julie Cassidy (AUT) summarised proposed changes to the Companies Act, particularly provisions to criminalise breaches of certain duties of directors. The proposed changes are limited to serious breaches of sections 131 (act in good faith) and 135 (reckless trading). In contrast, the scope of the provisions in the Australian statute is much more extensive. Cassidy called for officials and politicians to look at the Australian context more closely, with a view to including a more extensive set of provisions. There is considerable resistance to the addition of any criminal consequences in some quarters (surprise, surprise). However, the disreputable actions of some have tarnished the reputations of the majority (who are well-meaning and hard-working). So, something needs to be done.
Kevin McCaffrey (Effective Governance Consultants) spoke passionately about advisory boards. He asserted that many owners of small-medium enterprises (SMEs) and consultants to SMEs simply don't understand vital differences between boards of directors and advisors to boards. In the eyes of the law, groups of advisors that meet regularly and perform duties similar to those of directors may be deemed to be acting as directors. Consequently, they bear all of the legal responsibilities, accountabilities and consequences of a director, even though they don't realise it. The safest way forward for groups of advisors is to avoid "advisory board" language, and to meet on demand for specific advisory tasks only. McCaffrey's talk provided a welcome and timely wake-up call. SME consultants, business incubators, angel investors and professional bodies all need to take note.

The symposium delivered great value to attendees—if the many complementary comments overheard during drinks at the end of the day is any indicator. Dr Coral Ingley's vision, and hard work to breathe life into it, needs to be acknowledged and applauded. Well done Coral. I hope the AUT corporate governance symposium becomes an annual event, to bring researchers, experts and (importantly) practitioners together to share and test ideas, in order to improve governance in this part of the world. It would fill a gaping void.

Published on: 12 December 2013

ANZAM'13: final reflections

A couple of correspondents have noticed (and commented!) that my dispatches from the ANZAM conference, held in Hobart 4-6 Dec, appeared to be incomplete because the last dispatch posted covered the keynote at the beginning of the second day. Indeed, this is correct. Most of the leadership and governance papers that I was interested in were presented on the first day. I spent much of the second day in one-on-one discussions with other researchers, exploring ideas that had been presented earlier in the conference, and testing a few ideas of my own. This proved to be a very valuable albeit more private time for me, because I was able to correct a few assumptions and misunderstandings, and get some additional clarity on some concepts that I didn't grasp well when they were first presented.

One session that proved to be very interesting was the interactive session on management education and the rise of MOOCs (massively open online courses). This new concept, of an entire course of material delivered online has caught the attention of many. The concept sounds great on paper, particularly to extend reach. However, the delivery model is not without its challenges (no opportunity to interact with others to thrash out ideas on a whiteboard, for example), and the financial model needs work (currently, access is free). Notwithstanding these points, the concept has merit as a delivery model alongside others. MOOCs should not be regarded as a panacea to replace the traditional (though high-cost) classroom learning model, as some have suggested.

Overall, the conference met my expectations. It was well-organised, with plenty of opportunity to interact with other delegates. However, the quality of the papers was lower than I expected. Some described some simply outstanding pieces of research, but, many others were straightforward reports of statistical analyses of readily available data. Papers in this category lacked any insightful commentary to assist future research, or help managers improve their performance in the field. In my opinion, some of these papers should have been rejected at the review stage. A smaller collection of higher quality papers makes for a better conference. If this shortcoming can be addressed, then the appeal, relevance and usefulness of ANZAM—to researchers and managers alike—will be enhanced I'm sure.

Published on: 5 December 2013

ANZAM'13: Keynote presentation, day2

The keynote to open the second day of the ANZAM conference was delivered by Prof Jonathan West, of University of Tasmania. His talk, Are innovation theory and practice oxymoronic? Tasmania as Exemplar, provided a breath of fresh air and a reality check for those involved in innovation research and entrepreneurial activities.

West noted that, despite the best intentions of researchers, very little innovation research has any meaningful impact on practice. He suggested that this is because most research and practice is based on the myths that innovation is necessarily based on high-technology, and that "we (Tasmanians) punch above our weight". He then proceeded to dispel the myths and offer an alternative approach. Millions of dollars are spent every year, on strategies and innovations efforts that have no real chance of providing a material return. Rather than ignore existing successful industries (in Tasmania's case: wine, horticulture, aquaculture, others) and try to create whole new replacement industries (high-tech, biotech, nanotech), West asserted that stronger innovation outcomes (and the follow on economic and societal benefits) would be far more likely if innovation efforts were focussed on improving existing strong industries and sectors.

West used the example of the wine industry, and suggested that if the size of the industry was doubled—through investment and genetic, product, production and distribution innovations—then the level of unemployment and a host of other negative indicators would plummet. The natural assets of the state and the demand for premium wine suggest such growth is readily achievable. However, two serious stumbling blocks exist: belief in the myths noted above are so deeply held, and innovating within an existing successful industry simply isn't "sexy". Consequently, governments and industry are reluctant to invest for the common good, and, in many cases, innovation efforts are subverted by incumbent companies for fear of increased competition emerging. The promise of the holy grail (biotech, nanotech and information technology) is simply too compelling, even though the chance of achieving a strong return is slim, at best.

West's remit was refreshing, for it tackled what is clearly a delicate topic head on. Such candour needs to be encouraged.

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