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    Back into (writing) gear

    Corporate Governance Decision Making Governance Language Research Tough Questions
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    Over the past couple of months, I have been deeply embedded in a pro-bono advisory engagement, and fulfilling several speaking and capability-building assignments—to such an extent that my writing has languished. Progress on Boardcraft stalled, and my last blog entry was back in May. But now, with those commitments in hand, I have surfaced to draw breath, scan the vista, and to begin writing again.
    Starting next week, I will pick up my pen (keyboard!) once more, to share my thoughts and observations on corporate governance, the board's role in driving organisational performance, and other topics that catch my attention. Expect a new muse some time on the first Monday of each month.
    As we get going again, may I ask a favour? Please tell me what you want to know about (as a comment to this post or via private message) and I'll do what I can to respond. This is a genuine offer to explore anything of interest—except if it is illegal or immoral, of course!
    For now, have a great weekend. See you Monday!
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    Looking back, for guidance to move forward

    Corporate Governance Decision Making Director Development Effectiveness Governance Language Performance Research
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    Questions of where we came from, why various things happened or evolved as they did, and what we can learn from them to guide us as we live our lives fascinate many people—me included. From neo-lithic henges and stone circles, to the development of more recent industrial-scale enablers (notably, the wheel, the printing press, manufactories, the motor car and the Internet), man has long been fascinated with history, innovation and possibility. When we ponder historical developments and innovations such as the examples noted here—and other foundational things like language, writing, mathematics, ethics and civics—we gain insight to apply in our daily lives or use as a springboard to try to make new discoveries. This maxim applies personally, in family and social groups, and more broadly in society—and if we ignore it, it may be to our peril.
    The idea of learning from those who have gone before us is applicable in organisations too. How else would individuals and teams know what to do? This is what learning and development departments organise, and why professional development programmes exist.
    In the realm of boards and boardwork, relevant questions include three I have been asked most often over the past two decades: What is corporate governance; what is the role of the board; and, how should governance be practiced? That these questions are asked so often suggests directors (at a population level) lack the knowledge needed to be effective.
    Helping directors and boards govern with impact is a calling for me, so when Mark Banicevich invited me to explore the history of corporate governance—well, make a fleeting visit across a few high points in the Western context—I jumped at the chance. Hopefully, the commentary is helpful. Do let me know whether you agree or disagree with the various perspectives, and why, because I’m no Yoda (use the comment section below, or contact me directly). Life is a learning journey for me as well!
    This conversation is the third in a series recorded recently. Recordings of the first and second conversations are also available.
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    On commitment: how far will you go?

    Accountability Decision Making Family Business Governance Performance Tough Questions
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    Several times in the past year, I have been asked for advice, even to intervene, in situations where relationships between board members have become strained, or shareholders have fallen out—with each other or with board members—over differing expectations around returns and/or succession. Each situation has been both complex and demanding, for they involve people and human emotion.
    The following vignettes are illustrative of the types of things that can go wrong and the ensuing behaviours of various actors:
    • ​Four directors of Christchurch City Holdings Limited have resigned following a relationship breakdown with CCHL’s shareholder, the Christchurch City Council. Reports suggest the shareholder wanted dividends paid at levels the board thought was above what CCHL could sustainably provide. Despite considerable effort to resolve the matters, four directors have decided that the demands are unreasonable; enough is enough, and they have walked away. One, Abby Foote, is an esteemed director and Chartered Fellow of the Institute of Directors.
    • A large-scale family company has been experiencing some difficulties, and several ‘next generation’ leaders think the patriarch should step aside. The company has a long history of success and balance sheet growth, and it has enjoyed a positive reputation in the market. But now, the patriarch, who thinks he is still the best person to run the business despite poor health, has become a stumbling block. The sole independent director can no longer claim to be independent either, as she has been captured by the patriarch. Family members are frustrated, and company performance is languishing.
    • The shareholders of a business active in agriculture and forestry in two countries have found themselves at odds over the future of the business. The largest livestock unit has struggled to make a profit in recent years, and the trees on the main forestry block are reaching maturity. Some brave decisions need to be made to secure the future of the business. Some of the shareholders have sought advice from a consultant, and they seem to be comfortable with the advice (to harvest the trees to fund continued dividend payments that they have come to rely on), despite a clear conflict of interest (the consultant is a shareholder of a lumber milling business that stands to gain from the harvest). Other shareholders want to engage some independent advice and take a longer-term approach to sustainable performance and value creation.
    As is typical in board and shareholder matters, options are many and resolutions are far from clear cut. What options might a capable independent director consider in such circumstances?
    • Should they try all reasonable options (such as the CCHL board appears to have done), but reserve the option of resigning if a satisfactory resolution cannot be achieved; or,
    • should they steadfastly remain loyal to the shareholder who appointed them, even if they disagree and are no longer being effective; or,
    • ​should they continue to try to achieve a resolution having noted the duties owed and fiduciary responsibility, despite the risk of legal challenge and reputational damage?
    These are questions of commitment and duty. Directors need to not only recognise this, but consider options amidst ambiguity, and work within the constraints of the law and what is ethically acceptable. Essentially, these questions ask how far a director is prepared to travel, how hard they are prepared to work, how long they might prepared to wait before enough is enough. Are they prepared to make decisions that may be unpopular or even unpalatable, because such decisions are in the best interests of the company? Will they go to the ends of the earth, so to speak? Or does the preservation of reputation rank more highly than acting in the best interests of the company—essentially, will they bail when the possibility of reputational damage arises (as several directors of Wynyard Group reportedly did just before the company failed several years ago)?
    Directors would be well-advised to have asked themselves these questions before they accept an appointment. They should also be prepared to act (step away) if the thresholds they set themselves are surpassed, or if they no longer have the expertise or courage to act.
    Of the directors you know, how many possess the wisdom and maturity to act diligently, in the best interests of the company?
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    When things go wrong...what can be done?

    Accountability Corporate Governance Decision Making Effectiveness Family Business Governance Performance Research Value Creation
    Boards, and an oft-mentioned but mysterious concept—governance—are topical. Daily, it seems, these terms feature in our newspapers and on social media, usually because something has gone wrong. And when it does, ​the chattering class is not slow to react. Typically, the targets of their comments are the board and management of the organisation.  That seemingly strong organisations suffer significant missteps—or even, fail outright—on a fairly regular basis is worrisome; the societal and economic consequences are not insignificant. What can be done?
    Recently, the inimitable Mark Banicevich invited me to discuss boardroom success and failure, and to offer guidance that boards wanting to lift their game may wish to consider. 
    Hopefully, our discussion is helpful and enlightening. Regardless, I welcome questions and comments, either here or send me an email.
    This is my second conversation with Mark (the third will be published in May). If you missed the first, you can access it here: Governance around the world.
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    Around the world, in twenty minutes

    Accountability Corporate Governance Director Development Governance Leadership Sustainability
    Recently, I had the great fortune to sit with Mark Banicevich, a business leader, to record a set of three fireside chats for his Governance Bites series. Mark was keen to get my take on several topical aspects of boards and governance.
    The first of the three conversations is now available to watch. (The second and third conversations in the series will be posted in April and May.) In this conversation, we explored board work in various jurisdictions, noting differences and similarities along the way. 
    While a 20-minute whistle-stop conversation is hardly sufficient to do the task justice, I do hope it encourages you to explore further, and is a catalyst for some conversations. ​
    And, may I ask... is the commentary helpful or not? What do you agree or disagree with? I'd be glad to hear your thoughts, either in the comments section below, or directly, if you prefer.
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    The words we utter: Do they matter?

    Accountability Corporate Governance Governance Leadership Value Creation
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    As regular readers know, I read widely; topics I explore span (in addition to core themes of corporate governance and strategy) include philosophy, neuroscience, business, history, military strategy and more besides. I usually take notes, as an aide memoire for later reference. 
    Some articles are memorable, others less so. This one recently-published article piqued my attention because it reminded me of a question I face most weeks: "What do you do?" Most enquirers expect to hear a job title or a profession, to enable them to 'position' me, which is fine if the 'job' is a well-known profession or vocation, such as a doctor, teacher, plumber or lawyer. But what about a director, or an advisor? Is offering a one-word response helpful? Might it enlighten or obfuscate? 
    For those who understand the roles of director and advisor, one-word descriptors are adequate. But for others (the majority, even most?), the response is more likely to an awkward smile, as if to say, "I wonder what one of those is or does? Does he mean a company director, a movie director, an orchestra conductor, or something else?" or, "What is an advisor? It sounds like a fancy name for a consultant." What an unhelpful interaction!
    Clarity and simplicity are vital if we are to communicate effectively. And the effectiveness of what we utter—whether our message got through—is determined by the listener not the speaker.
    ​With this in mind, I try to read the person before answering. If they appear knowledgeable of business matters, I tend to say I work with boards, sometimes adding that I help them see around corners and govern with impact; an advisor. But if not, I say I'm a troubleshooter who works with business leaders, or something along those lines. One thing I never say: I'm a consultant—they are people who make decisions and implement things for others. I don't. Rather, I ask questions to gain insight and make suggestions. Whether the client takes up the advice or not is their decision. 
    So, returning to the headline question. The words we utter: do they matter? Yes, they surely do, if we are to communicate well.