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    Does better governance lead to better company performance?

    Governance Management Performance Phd Research
    It's been said that better boards usually lead to better business performance. Such claims have been widely reported—in the press; in classrooms; amongst consultants; and, during informal chatter amongst business executives—however they are potentially misleading.

    I am amongst those who would like to think that better leads to better performance. However, I'm not sure what "better" means, nor that any direct link exists between governance and performance. Does "better" mean more active, more experienced, more diverse, more engaged, or more something-else? We need to find out, so we know what we are talking about. To the second point, we don't know how boards influence performance. Several researchers have postulated a relationship between governance and performance but, as yet, conclusive explanations have remained elusive. Thus, my doctoral research.

    If you have grappled with these questions, I'd love to hear from you, with a view to sharing some ideas and testing a few theories that are starting to form in my mind.
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    ANZAM'13: CEO replacement decisions

    Conferences Governance Management Performance Phd Research Strategy
    The replacement of a poor performing CEO is an important but challenging task of boards. Young Kim's (University of New South Wales) summarised recent research into factors which contribute to the speed with which boards make CEO dismissal decisions. Her quantitative study, using data from 348 publicly-listed US firms, explored the relationship between external signals of declining performance (analyst downgrades), the board's interpretation of any signalled decline, and the time to any subsequent dismissal of the CEO. The results revealed that three factors seem to be significant to the speed with which the board makes any CEO dismissal decision. According to Kim, boards made dismissal decisions more quickly when:
    • The magnitude of performance drops were high/strong (gross failure to achieve performance targets)
    • The performance drop represented a large variation from a previously consistent pattern of performance
    • The performance drop was more extreme than prevailing industry patterns

    These results were encouraging. They confirmed my intuition that most boards tend to react only when large changes or variations from forecast occur, and that the response they turn to first is to dismiss the CEO. In so doing, the larger problem—of boards operating as the "ambulance at the base of the cliff"—is brought into stark relief. The continuing failure of boards to understand the operational context within which the company operates, and to monitor performance against strategy adequately, amazes me. Kim's study provides a useful launch pad for further research, perhaps using qualitative methodology, to understand the motivations of boards, and the changes needed to move boards into the role of the top of the cliff. I intend to chat with Kim about this, because I suspect there are synergies between her work and mine.
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    ECMLG'13: Observations and insights

    Conferences Governance Management Performance Phd Research Strategy
    Later this week—on Thu 14 and Fri 15 November—I will be speaking at the 9th European Conference on Management, Leadership and Governance in Klagenfurt, Austria. I'm looking forward to renewing acquaintances and making some new connections; to presenting a paper to an international audience which will include some of the world's leading governance scholars; to testing some emergent ideas; and, to learning from others throughout the two days. 

    I plan to post reflections here during the conference, so check back if you'd like to hear about the latest developments in management, leadership and governance research and practice.
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    My "re-conceptualisation" paper has been accepted for ICMLG

    Conferences Phd Research
    Great news—in the form of two emails—awaited my arrival at the desk this morning.

    The first was from the organisers of the 2nd International Conference on Management, Leadership and Governance, to be held at Babson University, Mass, USA, in March 2014, advising that my paper entitled Towards a re-conceptualisation of governance, via strategic decision-making and performance has been accepted onto the conference programme. That this paper has been accepted is a significant milestone on my doctoral journey, for it signals that the ideas and conclusions that are starting to emerge from my work are of interest to others.

    The second was from the family that I lived with during my AFS student exchange to northern Minnesota in 1979–80. Somewhat presumptuously, to wrote to them last week to mention the possibility of the conference, and to ask whether I could visit if the trip went ahead. My host parents are now well into their 80s, and I have not seen them since 1990, so I was hoping they'd be agreeable. The reply was amazing, for not only are they happy for me to visit, but they have already organised a function, and arranged for my host siblings to travel from various points on the compass to be there as well.

    News like this really lift one's spirit and makes the long—and at times arduous—doctoral journey so very worthwhile.
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    Three-weeks of busy-ness...

    Conferences Governance Phd Research
    I'm working my way through a busy three-week period in my PhD programme: a period of gathering data, attending meetings, writing papers, preparing speeches and testing ideas. Having successfully navigated a travel-heavy programme last week, this week is a little more orderly, with another round of interviews and meetings in (just!) two cities. However, the travel kicks in again on Saturday, with a flight to Klagenfurt Austria, via London and Vienna, to attend and speak at the 9th European Conference on Management, Leadership and Governance (13–15 Nov). The programme looks very interesting, with a wide variety of peer-reviewed papers to be presented by some very capable scholars. One of my papers will be presented on Thursday morning, and the other later the same day.

    Despite the busy-ness of the period, the opportunity to meet some of the world's leading governance scholars, to further test the ideas that are starting to emerge from my research, is one I am very much looking forward to. For readers interested in the ECMLG conference, do pop back next week, because I intend to share my thoughts and insights here, as I did at the ICMLG conference in Bangkok earlier this year. 
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    Swimming in data...but some clarity is starting to emerge

    Governance Performance Phd Research
    I'm sitting at my desk looking at a fantail flitting between the branches of the tree just outside the window. It's a great distraction from what I should be doing: cataloguing the pile of data gathered in the last week, including 900MB of sound recordings and 28 pages of handwritten notes, from two board meeting observations and three interviews. The insights from this latest data need to be compared with insights from data gathered earlier. While this process is akin to swimming in data, there is some good news: five "causal powers" (that may explain how boards influence business performance) are starting to emerge. However, I keep reminding myself not to jump to conclusions, for there is more data to gather and more analysis to conduct. The ideas forming in my mind could be significant, or they could be a mirage. Time will tell. The fantail has gone now, so it's back to work. I'll keep you informed.