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    Applied research: Strategy in the boardroom

    Decision Making Governance Leadership Research Strategy
    My nine-day visit to the UK and Ireland to discuss board and corporate governance topics and to share emerging research with board directors, executives and academics is drawing to a close. From meetings in the hallowed halls of the Institute of Directors on Pall Mall, office buildings, various fine dining restaurants and cafés, and university premises in Wolverhampton and Ulster; to master class presentations and a guest lecture, it has been a delight to engage with people who are deeply interested in corporate governance and the board's role in business performance. Thank you.
    Now, the task of addressing the numerous requests for more information, and to schedule future meetings, speaking and advisory engagements beckons. This is my priority over the coming days.
    Amongst the enquiries and discussion notes, several people have asked for more information about strategy in the boardroom. While I have written about this in the past, and strategy has been a core element in my doctoral research, interest in up-to-date applied research appears to be high. Given this, my intention is investigate some of the practical challenges faced by boards over the coming months and to publish the findings. However, such research needs willing participants...
    If you or your company board might be interested in participating in research, please get in touch. I am particularly interested in publicly-listed firms, high-growth businesses and social enterprises; in the UK, Europe, the US and Australia. Your expression of interest and any decision to participate (or not) would be entirely confidential, and neither you nor nor your company or social enterprise would be identifiable in any research report that ensues.
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    Getting over ourselves: a crucial competence for directors?

    Accountability Decision Making Governance Leadership Performance Research
    Board meetings are uncompromising places of work and decision-making. Not only are boards themselves inherently socially-dynamic (they are make up of people, after all!), but every situation is different and directors meet infrequently and they generally need to act on incomplete data.
    Consequently, decision-making effectiveness is largely dependent on directors working well together when the board is in session. However, that is much easier said than done. In fact, recent research suggests that we humans struggle to understand the minds of others, even though we think we are good at it. This renders group dynamics difficult, at best. 
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    One of the biggest barriers to understanding is egocentrism—we can't get over ourselves. We over-estimate knowledge and capability, including that of others to understand what we say or mean. The problem is exacerbated by the technological world of electronic mail (which strips out tone and meaning), and even more so the abbreviated 140-character world of Twitter and text messages.
    If directors are to make effective contributions in boardrooms they need to get over themselves. Older and more experienced directors are not exempt from this problem—they are just as prone to making assumptions as their younger or less experienced colleagues. 
    Techniques that might be helpful for directors wanting to make effective contributions include meeting together in social settings to learn more about each other; asking questions during board meetings with open hands and a humble spirit; careful (reflective) listening, to limit assumptions and check understanding; and, the demonstration of a collective empathy amongst directors. Perhaps it might even be helpful to appoint a psychologist onto the board! Please note this is not a categorical list—if you have evidence-based suggestions, please feel free to share them.
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    48 hours in (close to) paradise

    Accountability Decision Making Governance Leadership Performance Speaking Engagements Strategy
    When travelling, what's your favourite destination? Mine—from a work perspective anyway—is anywhere where board directors and executives who are eager to debate issues of boardroom practice and business performance. Since Tuesday evening, I have been in Dublin, Belfast and Dublin (again) doing exactly that—addressing groups of directors and answering questions. Matters of strategy in the boardroom; diversity; board structure; accountability; and, culture, amongst other topics, were discussed with vigour.
    To work with well over 70 directors and executives, all of whom were motivated by the discovery of board practices that might lead to improved business performance outcomes, has been wonderful. Thank you to the Ulster University Business School and the Irish Times Training for inviting me to visit the Emerald Isle to work with such influential people. That these busy directors and executives gave their time to debate important issues bodes well for the future performance of Irish businesses and social enterprises. I look forward to hearing great stories of success in the months to come!
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    Are the latest OECD #corpgov principles an opportunity lost?

    Accountability Decision Making Ethics Governance Leadership Performance
    Finance Ministers from the twenty most powerful trading nations, the G20, have endorsed a new set of corporate governance principles published by the OECD. The principles provide recommendations on matters including shareholder rights, executive remuneration, financial disclosure, the behaviour of institutional investors and how stock markets should function.
    The OECD principles have been promoted as contributing to more effective corporate governance. That sounds good—but what does 'effective corporate governance' mean and why might it be important? The OECD preamble offers this guidance:
    Good corporate governance is not an end in itself. It is a means to create market confidence and business integrity, which in turn is essential for companies that need access to equity capital for long term investment.  
    Wow, this suggests that corporate governance is a mechanism to protect investors and markets. The responsibility of the board for business performance is not mentioned—thus implying that  corporate governance is not a performance-based mechanism through which to pursue wealth creation. Rather it is positioned as a conformance tool to manage agency costs. What is the likelihood of boards spending time thinking about the purpose of the company, strategy or future performance if they are beholden to a set of conformance-oriented principles? 
    Sadly, it would be appear that these latest OECD principles represent an opportunity lost—for medium-sized and privately-held companies at least.
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    Cybersecurity: is it time for a Goldilocks conversation?

    Accountability Decision Making Governance Leadership Performance
    Cybersecurity is getting lots of airtime at present, often for all the wrong reasons. Reports of leaks, hacks, and data breaches pervade news sites on an almost daily basis it seems. Sadly, many news articles are sensationalist: but that is what sells the news, I guess.
    Many studies have been conducted to try to understand the problem—most of which seem to offer little when it comes to meaningful recommendations for directors seeking to mitigate business risk. Consequently, most studies and reports go in one ear and other the other.
    However, a recent study by the Ponemon Institute does make interesting reading (link here). The purpose of the study was to determine if boards of directors are a help or hindrance to creating a strong cybersecurity posture. Significant differences between how boards and IT security folk perceive risk (especially cybersecurity risk) were exposed. The technical people tend to talk it up (validly or otherwise), whereas directors typically consider cybersecurity as one risk amongst many others. That directors and technical people have quite different perceptions about cybersecurity is hardly a surprise. However, it does highlight an operational problem. The perception gap has the potential to see either too much or too little invested in appropriate risk mitigation measures. Either way, the impact on the overall performance of the business is likely to be significant. How might this be addressed?
    Perhaps the answer lies in a candid Goldilocks meeting, whereby directors, executives and IT security folk meet together (for as long as it takes), to discuss and reach agreement on two things:
    • Understand cybersecurity from a risk perspective
    • The nature of cybersecurity risk and how it might be addressed
    A Goldilocks meeting should have the effect of ensuring that the board is suitably informed about cybersecurity matters, and the IT security people should gain an appreciation of the balance of the risks the board needs to consider. An appropriate action plan, agreed between the parties and based on a common understanding, could ensue.
    To have the board, executives and technical people working together with an agreed purpose and outcome in mind, rather than talking past each other as is typical in many cases I have witnessed, might sound fanciful. However, it's bound to do wonders for morale and culture. Perhaps it might be the most beneficial outcome!
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    Seven days out ...

    Decision Making
    The final countdown to a busy speaking and advisory trip to the UK and Eire is now underway. That four presentation slide decks are now ready means just one more set of slides remains to be created ahead of a series of seminars, master classes, roundtable forums and private meetings starting 1 September. A wide range of topics will be discussed, including:
    To be a participant in what is shaping up to be an interesting series of discussions with leading practitioners and academics will be an honour. If you are based in the UK or Eire, I hope you can join the conversation. Regardless, a summary of the main discussion points from each public session will be posted here. If you would like more information, please get in touch.
    Now to finalise the remaining slide deck, and confirm the trip logistics...