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    Mixed-sex boards are better. Yes, but why?

    Governance Leadership Performance Research
    Another research report on the topic of women on boards has just been published. This one was completed by Prof. Judith Zaichkowsky of Simon Fraser University in Canada. You can read the full report in the June 2014 issue of International Journal of Business Governance and Ethics (*), or read the headline findings here. Amongst other findings, Zaichkowsky found the boards with even one woman rated more highly than those with no female directors. This confirms a trend that was first noticed a decade or so ago.

    The most interesting part of the report for me was the means by which it was conducted and the scope of the findings. The study was based on the statistical analysis of a number of variables of interest. I don't doubt the validity of the results. However, the thing to keep in mind with statistical analyses is that they can only show, at best, correlations—which is exactly what Zaichkowsky achieved.

    Knowing that mixed-sex boards can and often do have higher corporate governance ratings is helpful. However, there is an elephant in the room. The killer question is to understand why mixed-sex boards rate more highly, so that other boards can learn and apply the knowledge to their own situation. I doubt the answer has much to do with gender per se. Women do something different in the boardroom or they bring something different to the discussion, I suspect. That different thing appears to be valuable, so I would love to know what it is!

    My suggestion to researchers thinking about tackling the "why" question is to get inside some boardrooms and observe what actually happens. That's what I did for my research (to explain how boards can influence performance outcomes). If you'd like to discuss how to achieve this, please contact me, I'd be very happy to exchange ideas, and to outline about how I went about the challenge of gaining access.

    (*) The original article is available from the IJBGE website, for a fee. 
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    Know your audience: Should I write in two "languages"?

    Governance Phd Research
    My wife and I had a wonderful dinner last night, with some newfound friends at their home. The four of us have quite different backgrounds, so the evening was primed for a wide-ranging conversation. And so it came to pass: we explored a rich tapestry of business, social, political, cultural and spiritual ideas. 

    During the conversation, Jane asked about my research, because she wanted to understand its practical application to business owners, boards and managers. She had heard a little about governance and boards. However, some of the stories in the media and suggestions that "every one should have a board" were a bit frightening. She said she had read some of my research papers, which she found interesting but hard to read. While she understood the words, some of the concepts and their practical application were harder to fathom. Jane asked why I write as I do.

    "For my audience", I said.
    "OK, that's great; but if you are uncovering some interesting things, to help boards perform better, why don't you write in a way that your audience can understand?"

    Jane perceived that my audience is (or should be) business owners, boards and managers, whereas my papers are actually written for, and to meet the expectations of, the research community. I have long planned to re-write my findings into a book format—after the doctoral journey is completed. However, the question set me thinking: should I write two versions of each paper: one for academic consumption and another, more accessible version, for boards and managers? Would this idea be helpful, or are the musings posted on this blog sufficient until the book appears?
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    Paper accepted for international conference

    Conferences Governance Phd Research
    I'm both thrilled and humbled by some news that arrived overnight. A paper that I prepared some time ago, The crucial importance of access to the advancement of governance research (read abstract), has passed through the double-blind review process and been accepted onto the programme of the 10th European Conference on Management, Leadership and Governance (ECMLG)! The conference is being held at VERN', in Zagreb, Croatia, in November.

    The paper discusses the difficulties that governance researchers face when their research is limited to the analysis of secondary data—typically interviews, surveys and questionnaires. It suggests that if researchers study what boards actually do, by observing board meetings directly, then it should be possible to learn enough to provide an explanation of how boards influence company performance outcomes (or not). The paper also includes some preliminary insights, which emerged from a series of boardroom observations conducted as part of my doctoral research. It will be interesting to see how this paper is received. Hopefully, it will give folk the confidence to press on and try different approaches to corporate governance research, to discover if and how boards create value, or whether they simply impose cost.

    The full paper will be available on the Research page immediately after it is presented at the conference.
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    ICMLG 2015 to be hosted in Auckland, New Zealand

    Conferences Governance Leadership Management Phd Research
    The 3rd International Conference on Management, Leadership and Governance (ICMLG) will be held in Auckland, New Zealand on 12–13 February 2015. This conference attracts leading thinkers from around the world. It is a significant opportunity to share research findings; debate emerging ideas on leadership, governance and strategic and operational management; contribute to the body of knowledge; and, importantly, meet some great people! In case you are wondering, the conference is designed for scholars and practitioners with an interest in these important topics.

    The call for papers has just been issued. I commend this conference to you, particularly if you undertake academic or commercial research, or if you are a doctoral candidate. I have delivered papers at the two previous conferences (click here and scroll down for details), and will be chairing a minitrack in Auckland.
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    Deloitte partner does boards and governance a disservice

    Governance Leadership Management Performance Research
    From time to time, I read newspaper articles and get annoyed. When I read this article, published today in the Dominion Post, the hairs on the back of my neck stood up. Do you notice anything odd or misleading? The article is easy to read and very accessible. The title is compelling, and the information is seemingly helpful. However, aspects of the article are poorly researched and, quite frankly, the suggestions do boards, owners and governance a disservice. Bill Hale, a partner at Deloitte, should know better. Allow me to explain, using one of the ten traits for business growth mentioned by Hale:
    Governance - A well-governed company is one that is under ‘adult supervision' - the founders are surrounded by people who have ‘been there and done that' before.
    Actually, this is not governance at all. This description perpetrates a serious misconception. Boards are not minders or coaches and governance is not a mentoring service, although many boards behave this way. Individuals directors or external advisors may perform these roles, but not boards should not. The concept of a board was established as a result of the separate of ownership and control—when absentee owners (investors, if you will) needed something to represent their interests and achieve their purposes. A seminal article, written by Berle and Means in 1932, makes the case very well. The board is an organisational-level structure: the purpose of which is to influence the achievement of performance outcomes, in accordance with the wishes of shareholders. Boards are responsible and accountable to the owners. Further, they are required (by law, in New Zealand, at least) to act in the best interests of the company.

    Can I suggest that corporate governance is actually a mechanism, through which business performance outcomes are achieved. Governance is not some structure or process as many (including Mr Hale it would seem) suggest, and the terms 'governance' and 'board' are not interchangeable. The activities and actions of boards (what they do), including setting strategy; making decisions; monitoring performance; and, hiring the CEO (for example), are processes—events that occur over time. Further, companies are made up of people, and people make choices. Consequently, the desired results—revenue growth in the case of the companies mentioned in this article—may or may not occur as a result of governance interventions, despite the best intentions of boards and managers—or anyone else that wishes to contribute.
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    Feltex case: yet more revelations

    Governance Management Performance Research
    There was another round of revelations in the Feltex Carpets case today, and they do not make good reading for the defendants. When I wrote about the case in March, the suggestion was that Feltex was a lemon and that most of the juice had been squeezed out already. It now appears as though the defendants knew of the sales shortfall before the IPO was launched. Oh dear. If this is correct, the directors knowingly oversold the business and misled prospective investors—which puts them is a very awkward position.

    The representative action case on behalf of 3639 former shareholders is being heard by Justice Robert Dobson. It has quite a complex case—both sides have been rolling in expert witnesses—so the judgement could be weeks away. Notwithstanding this, the decision has the potential to set an important precedent for future IPO activity, not to mention the duty of care responsibilities of directors and disclosure benchmark requirements. For this reason, it is being watched closely by investors; directors; advisors; and, the Institute of Directors in New Zealand (IoDNZ)—and rightly so.