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    Boards and accountability: honoured to have article published

    Accountability Governance Leadership Management Research
    Several of the articles from the winter edition of Ethical Boardroom are now available online, including the one that the editorial board asked me to write, on accountability in the boardroom. Here's a snippet:
    The role of the director bears a weighty responsibility, so directors need to take their appointments, and the accountability that goes with such appointments, seriously. Most do, but some, clearly, flout the boundaries of moral, ethical, and in some cases, legal acceptability. Directors need to be beyond reproach. Clear demarcations of what is acceptable – and what is not – need to be established. This may mean that the curious propensity to collect directorships, as some badge of honour it would seem, needs to be called into question by shareholders and by the profession’s body. That directors with six or more appointments have any hope of providing any more than a cursory contribution is beyond us. The challenge, of course, is holding directors to account for this level of performance, among peers, in the public domain and through any legal processes that may be required.
    Click here to read the full article. Thank you to the editors for the opportunity to make a contribution. I hope it stimulates some debate and, in some small way, advances the understanding of how boards can and should contribute to business success. If you have any feedback, or would like to explore the issues raised in the article, please contact me.
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    Thank you!

    Governance Phd Research
    Christmas is nigh. In four days time, the hurly-burly that typically precedes Christmas—decorating houses, selecting gifts, preparing food and organising travel and accommodation—will be over. The decorations will be taken down and packed away, and most of us will take some time off work. As we relax, many of us recall major events from the year and ponder what the future might hold. I'm no exception, although I have some unfinished business to deal with first: to say thank you.
    • Thank you for your support and encouragement through 2014.
    • Thank you for your interest in the research outcomes that are starting to take shape.
    • Thank you to those unnamed people that have been there when the going has been tough.
    The goal I set twelve months ago, of completing the doctoral thesis for submission by Christmas, has slipped my grasp. However, good progress was made throughout the year. My new goal, of submitting the thesis by Waitangi Day, is quite achievable. Despite this hiccup, the level of support and encouragement that has flowed throughout the year has been amazing. Thank you. I have met people—some of whom have become friends—at conferences; in business meetings; at workshops; and, on LinkedIn, Twitter and email. Some of the conversations have blown me away. That such a broad church of people from all around the world might be interested in learning how boards can influence business performance has given me great hope; that the research may have some real value in practice.
    I will 'sign off' from the thesis write-up on 23 December, and not return to it until 2 January. I'm tired and need a break to recharge for the final push to submit the thesis and then to prepare for the oral examination.
    Looking to 2015, I have three main priorities:
    • Complete the doctorate!
    • Recommence advisory work, and share my research findings
    • Secure one, or maybe two, new board appointments
    If you think you might want some assistance in 2015; or, if have a board vacancy; or, if want to hear about my research or have me speak; or, if you simply want stay in touch, please let me know. I'd love to hear from you. To follow my work, please check this page periodically—the musings will continue to be published for as long as people read them and say they are helpful. Merry Christmas.
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    Speaking and advisory tour: UK & Europe in March 2015

    Governance Performance Research
    A few weeks ago, I signalled my intention to return to the UK and Europe in March 2015, to fulfil speaking and advisory engagements. The trip is now confirmed: I arrive in London on Sunday 8 March, and will be available for meetings anywhere within the UK and Europe, as follows:
    Mon 9 March
    Tue 10 March
    Wed 11 March
    Thu 12 March
    Fri 13 March
    Mon 16 March
    Tue 17 March
    Wed 18 March
    Thu 19 March
    Fri 20 March
    available
    speaking Leeds
    available
    speaking in Winchester
    available
    meetings in London
    available
    major European city (subject to confirmation)
    available
    depart for New Zealand
    If you would like me address a public audience; work with a board or executive team; attend a symposium; facilitate a workshop; discuss the findings of my doctoral research; or, explore collaborative research opportunities, please contact me. I'm happy to explore any aspect of board practice, corporate governance, strategy, business performance and related topics that might interest you. I look forward to hearing from you, to understand how I can help.
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    When is the board not "all in it together"?

    Governance Performance
    The recent sentencing of former South Canterbury Finance director, Ed Sullivan, has raised an interesting issue for directors. Most professional development providers, the Institute of Directors included, teach that the board is a collective of directors and, therefore, the collective responsibility applies. However, the Sullivan case suggests otherwise. Sullivan was found guilty of making false statements (including failure to disclose a related party transaction) and deception. Another director and the CEO were acquitted. The collective responsibility—that the decisions of the board are the decisions of the whole board—has been trumped in this case. Or has it? Whereas other cases against directors have resulted in guilty verdicts across the board (albeit with variations in sentencing), fault is apportioned to one director only in this case. An approachable summary of the verdicts and basis for each judgement, has been published here. 
    Mr Sullivan appears to have overstepped the mark on several occasions, by making false statements or by withholding information. Justice Heath determined that Mr Sullivan acted alone, and that decisions to make statements or withhold the information were his decisions. It seems that they were not decisions of the board, and therein lies the important distinction. All directors are culpable for decisions made (or not made) by the board—whether every director was present when the decision was made or not—whereas individual responsibility applies when individuals act outside the board. This is because the board is a collective of directors and, therefore, binding decisions of the board can only be made by the board (ie. during meetings of the board).
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    Museum CEO exposed as ineffective. But what of the board?

    Governance Management Performance
    Te Papa, the Museum of New Zealand, is front-page news today. This time, the museum has "lifted the lid on Michael Houlihan's disastrous tenure as its chief executive"—a strong opening statement by the newspaper. Houlihan has presided over several years of poor business and financial performance since his arrival in 2010. However, two big loss-making exhibitions and the Chief Executive not coming "anywhere near meeting any of the targets we gave" led the board to its decision to agree to Houlihan's departure.
    Thankfully, the Te Papa board has now acted. A new Chief Executive has been appointed, and the museum is looking to the future. The Minister of Culture and Heritage seems to have had her confidence restored as well, now "[new] Chief Executive Rick Ellis and Chair Evan Williams are now steering the ship in the right direction".
    The newspaper suggests that the problem lay with the Chief Executive, by implying that he was ineffective. Indeed he may have been, but is that where the enquiry should stop? The Chief Executive is accountable to the board, so the board should not be beyond scrutiny. The board's job is to govern (to steer and to pilot). This is (or should be) an active role. Why did it take two years to act? Was it asleep at the wheel? Some further enquiry is likely to be beneficial—not as a witch hunt, but to reveal insights and provide guidance for other boards.
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    That composition will be the #corpgov story of 2015: Really?

    Governance Leadership Performance Research
    Sorry folks, but I have just seen red. Rich Fields, a correspondent at Tapestry Networks, has just proclaimed that board composition will be the big corporate governance story in 2015. I'm surprised, really surprised. 
    For well over a decade now, the academic and practitioner communities have been exploring a wide range of board structure and composition options, in search of a causal link with business performance. Many attributes of boards and directors have been investigated including gender; CEO duality; independent director; board size; and, diversity, amongst others. Positive, neutral and negative associations have been reported in the research. Earlier this week, I wrote a thought piece on independent directors, and offered the following conclusion:
    A variety of conclusions are apparent in the research. Cause has not been established. It's a bit like saying that female directors cause companies to perform better. Increasingly, people are realising that board performance is more likely to be contingent on what directors do in certain situations than on who they are or any specific board structure or composition. Like gender, the independence attribute is likely to be a proxy for something else. We need to discover what that might be, so it can be used to qualify the suitability of director candidates and inform board performance assessments.
    Respectfully, I suggest Mr Fields needs to think a little harder about what is known already and what is yet to be discovered. Aspects of composition may be topical, but to suggest that board composition will be the hot topic is rather myopic. We need to move on, and turn over some other rocks, elsewhere.