Governance - Peter Crow | Helping boards govern with impact

Published on: 18 November 2015

The boardroom agenda: Raising the bar on board effectiveness

I will be in Singapore early next week (23–25 November) for the "The Boardroom Agenda" conference at the Ritz-Carlton Millenia. The attendance list includes senior chairmen, directors, company secretaries and chief executives from across Asia and the Middle East.

The main aim of the conference is to 'raise the bar' on board performance and take the board's effectiveness to greater heights. In addition to five plenary presentations, two parallel streams (Board Insiders and Council, and Board Guardians) of cases studies, mini think-tanks and deep dive sessions are scheduled. The third day is dedicated to an optional masterclass workshop.

My main contributions will be on Day Two. I will be a panelist (The Board Governance Dialogue); delivering a presentation (Responding to the re-emergence of director's duties and liabilities); and, chairing the Board Insiders and Council stream. For more information:

Summaries of important insights will be posted here.

Finally, if you are in Singapore on Mon 23 or Tue 24 and wish to meet privately to discuss other matters of interest, I am available to do so over dinner. Please get in touch if you want to take advantage of this.

Published on: 15 November 2015

ECMLG'15: Performance evaluation systems for corporate directors

Demands on boards to ensure desired company performance outcomes are achieved have led to increased scrutiny of directors and director effectiveness in recent years. Performance evaluation systems (PES) have emerged as a tool of choice to assess director performance. However, the influence of such systems on business performance is largely unknown.

Marie-Josée Roy reported the findings of a recent Canadian study that examined PES closely, in an attempt to bridge the knowledge gap. Roy's survey-based study of 89 large Canadian companies identified three distinct types of PES (exemplar, formal, minimalist—definitions of which were provided in her supporting paper). The typology was based on descriptions provided by survey respondents. Her analysis revealed some interesting correlations, including that boards with an exemplar PES were more likely to be involved in important board roles of strategy and monitoring, and were more likely to be effective in these roles.

While Roy's study was helpful in that it provided empirical evidence on board performance evaluation systems, it did not resolve the crucial question of how, in actuality, an effective PES might work. Survey respondents can (and often do) provide answers of convenience. Sadly, knowledge of whether any PES in use is actually useful (or not) for improving director and board performance remains largely unanswered. Other approaches to research, including longitundinal observations of boards in action and (probably) pyschological assessments are likely to be required if tangible progress is to be made. Even then, another even more vexing question—of whether improved board effectiveness leads to improved company performance—lies in wait.

Published on: 15 November 2015

ECMLG'15: On cyber defence and leadership

The second day of the 11th European Conference on Management, Leadership and Governance opened with an outstanding keynote delivered by Lt. Col. Paulo Nunes of the Portugese Military Academy. Nunes is the Programme Leader of a NATO-sponsored multinational cyber defence education and training (MN CD E+T) project (click for more details).

The digital and physical worlds are, increasingly, being integrated—to the extent that some would suggest the existence of a blurred reality. 'Cyber' is a red-hot topic in both the business and military worlds, to the extent that it has become the frontline of various attempts to achieve both legal and illegal political, military and economic objectives. Nunes reported that the biggest weakness in the system is people, the human firewall.

The MN CD E+T project has been commissioned to design and implement an integrated approach to increasing awareness and providing training at the nation, NATO, EU and business levels to prepare, detect and respond the various weaknesses and threats. This includes work to determine expected behaviours and desired operational outcomes, and then to develop and deliver appropriate learning systems. Seventeen nations are currently involved in the programme, with more enrolments expected in the coming months.

If implemented well, the programme offers considerable benefits to businesses of all sizes and types. Boards and directors would be well advised to receive briefings and allocate time to think critically through the issues and implications.

Published on: 15 November 2015

Insights for boards, from a learned gentleman one Friday afternoon

I was party to a fascinating conversation on Friday evening, with a gentleman—in the full sense of the word—in the lobby of a comfortable hotel in Lisbon, Portugal. The gentleman, a learned business professor, advanced in years but razor sharp of mind, was asked to comment on the Portuguese political situation, particularly as it related to the recent election and the selection of a new Prime Minister.

After a considered pause of some twenty seconds or more, and the repeated stroking of his furrowed brow, he responded. Speaking in somewhat broken but ultimately capable English, the professor said "Aah, the situation is interesting, very interesting. We have many challenges; Portugal needs strong leadership."

The professor went on to describe several challenges and difficulties, including that the highest polling party lacks the numbers to nominate their leader as Prime Minister and govern by majority. A complicating factor is that the President of Portugal will soon complete his term. The situation is unstable. If it cannot be resolved quickly, a coalition of minor parties including an extreme leftist party may try to usurp power and turn away from the gains made in recent years. The professor suggested that the main casualities will be the economy and the wellbeing of the people. The small audience of four leaned in as the professor spoke, enthralled by the palpable intensity of the situation.

The parallels and lessons for companies, and boards in particular, are stark.

Boards that are not united in purpose cannot hope to lead the company they are charged with overseeing effectvely. Similarly, chief executives without a clear mandate to lead risk stasis. Those that run agendae in variance to agreed priorities or strategies put the future prosperity (and, potentially, the viability) of the business at risk.

In society, democracy has it benefits, but only to a point. When a group of people—be it the electorate, a group of executive managers or a board of directors—can't agree, the organisation can't hope to compete effectively or make progress towards value creation goals. As with the Portuguese election result, such situations in business are not sustainable. Strong leadership is required, from the top, to break the deadlock.

As we parted ways, the professor graciously invited me to return to Portugal, both to spend more time with him and to share insights with business leaders. If the quality of our brief exchange is any indication of what might be possible in a wider context, I look forward to that day, and very much so. Thank you professor.

Published on: 13 November 2015

ECMLG'15: Opening Keynote

The 11th European Conference on Management, Leadership and Governance (ECMLG) got underway this morning, at the Military Academy in Lisbon, Portugal. Nearly 90 researchers, from 28 countries have assembled to present their research and debate emergent ideas and models.

The overall theme of the conference was set by Colonel Nuno Lemos Pires when he delivered the opening keynote address From Leaders to Commanders. His talk provided some interesting contrasts between leadership in a civilian context and a military context:

Whereas many leaders choose their team and mission, commanders do not chose their team nor do they chose the mission to be accomplished.
Whereas the natural human condition is towards nepotism, the military context is one of renouncing individual freedoms and preferences in favour of the greater good.
Military leadership (commandership) needs to embrace—almost by definition—multi-national, multi-cultural and multi-dimensional elements, whereas this is not necessarily the case in civilian leadership.

Notwithstanding these contrasts and tensions, Pires then described several attributes of effective military leadership that appear to be applicable in the civilian context:

Critical thinking, to ask 'why' and understand motivation (cf. blind followership)
Individuality and initiative (in effect, ownership)
A habit of searching for and discussing contradictory options, to find 'better ways' (continuous improvement).

Leadership is a complex topic. In drawing both contrasts and parallels, including a direct challenge of the 'command and control' perception of military leadership, Pires set the scene well set for an interesting two days ahead.

Published on: 13 November 2015

ECMLG'15: Human-oriented performance management

The translation of strategy and goals into actionable targets and outcomes is a challenge for many organisations. Rob ter Hedde and Benny de Wall (Utrecht, Netherlands) have been investigating this challenge. While many think in terms of 'hard priorities' of operational efficiency and organisational design, ter Hedde and de Waal focused on human factors. They presented a model consisting of four dimensions—strategy translation; dialogue and action orientation; continuous improvement and organisational learning; and, information and visualisation—and suggested that the link between strategy and effective implementation was contingent on this four dimensional model being set in motion.

Their results showed that anchoring the organisation's objectives and strategy in the minds, hearts and hands of the people (staff and other stakeholders) is crucial for performance improvements. While not explicitly stated, this research reinforces the importance of clearly annunciating core purpose—the 'why'. People are more likely to get behind causes that things. The civil rights leader, Martin Luther King, provided a very famous demonstration of this with his Dream speech. Just imagine the [non]impact if MLK had uttered "I have a plan...".

Tags