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    What research can we accept then?

    Phd Readings Research Teaching
    I had a fantastic meeting with my PhD supervisor earlier this week, to review my approach to the research methodology chapter of my thesis. When we stopped for some lunch and a walk outside, James showed me two articles from the 19 October 2013 issue of The Economist. They blew my mind. Entitled How science goes wrong and Trouble at the lab, the articles outlined how much of the so-called scientific research conducted by academics is actually a load of rubbish. For example:
    • Last year researchers at one biotech firm, Amgen, found they could reproduce just six of 53 'landmark' studies in cancer research.
    • A leading computer scientist frets that three-quarters of papers in his subfield are bunk.
    • In 2000–10 roughly 80,000 patients took part in clinical trials based on research that was later retracted because of mistakes or improprieties.

    The examples and supporting narrative floored me—it was sobering reading. The points about how research is conducted, how research articles are reviewed and, most importantly, how research is funded (the funding mechanisms drives the behaviours) were enlightening. The lingering question in my mind, having dwelt on these articles over the last two days, is this: just what research can we accept then? The answer probably lies in the maxim recorded in the first sentence of the 'goes wrong' article: 'trust, but verify'.

    The exercise was a timely and helpful wakeup call for my own efforts, to ensure my work is 'good science'. Thank you James.
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    2014: A big year ahead...

    Conferences Phd Research
    The first couple of weeks of January are usually a fairly laid-back affair in New Zealand. As a population, we tend to 'get away' after the hustle and bustle of Christmas. We camp, we get out on the water, we hike, we read, and we share each other's company over food and drink. Corporate offices and factories are usually fairly quiet, with skeletal staff keeping things ticking over until things get underway again, usually in the second or third week or the year.

    One of my habits during the summer break is to think about the year ahead, to get a sense of where my priorities should lie. When I get back to my desk (6 January this year), I write my ideas down, make some choices and load important dates and deadlines into my diary.

    This year the decision process was easy: my doctorate is the priority. Here's a snapshot of how my year is shaping up at this stage:
    • January: write methodology chapter for thesis; quick personal visit to Sydney
    • February: write paper for British Academy of Management conference; continue boardroom observations; finalise methodology chapter
    • March: speak at International Conference on Management, Leadership and Governance (Babson, Mass); continue boardroom observations; commence analysis of data
    • April: update literature review chapter; continue boardroom observations; continue data analysis
    • May: final boardroom observation; continue data analysis
    • June: continue data analysis; second round CEO & Chair interviews; finalise literature review chapter
    • July: complete data analysis; write paper for European Conference on Management, Leadership and Governance; short winter break
    • August: thesis writing in earnest; think about conclusions
    • September: speak at British Academy of Management (Belfast, Northern Ireland); thesis writing; assemble first substantive draft of thesis
    • October: finalise first substantive draft for review by supervisors 
    • November: update thesis based on feedback from supervisors; speak at European Conference on Management, Leadership and Governance (Zagreb, Croatia)
    • December: complete final draft of thesis; submit thesis! 

    What does 2014 hold for you?
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    Do you remember the Cadbury Report (1992)?

    Governance Leadership Management Performance Research Strategy
    Christmas 2013 is now history, which means 2014—and all the rituals associated with New Year—is nigh. For many people, the act of hanging a new calendar on the office wall in the last few days of December carries far more significance than simply closing off one year and opening the next. It stirs thoughts of the future, of what lies ahead, of one's dreams, hopes and aspirations. I am amongst those that think about the future and what lies ahead when the new calendar is hung. However, this year, I'd like to briefly look back before looking forward, lest an important anniversary in the world of corporate governance is overlooked.

    The Cadbury Report has just turned 21 years old. Do you remember the Cadbury Report and the recommendations it contained? The so-called Cadbury Report was actually the Report of the Committee on the Financial Aspects of Corporate Governance. An archive containing copies of Sir Adrian Cadbury's speeches, the report itself, and other related matters is now available online. The Report was commissioned following several scandals and company collapses, and the damage to investor confidence that ensued. It provided several recommendations to improve corporate governance. Amongst other items, these included:
    • that the roles of Chair and CEO be separated and held by two different people
    • that the majority of the board be outside directors
    • that an Audit committee, comprised of outside directors, be appointed

    The goal was to improve trust, transparency and performance. Subsequent to the Report, many companies have adopted the recommendations (motivated perhaps by the London Stock Exchanges "comply or explain" requirement), although not without resistance and reluctance in some quarters.

    The question to be asked on the occasion of the Report's 21st birthday is whether the recommendations have improved corporate governance and, perhaps more importantly, company performance. Sadly, the evidence is mixed, very mixed. History shows that the structural provisions, including those contained in the Cadbury Report, were insufficient to prevent the high-profile failures of the early 2000s (Enron, WorldCom, Tyco, et al), the global financial crisis of 2007–2008, and some more recent failures in New Zealand and elsewhere as well. But that should not be a surprise to anyone, because the purpose of rules and structures is to provide boundaries. Rules and structures cannot ensure or predict any level of future performance. The human condition; ethics; and, the propensity to act in good faith (or otherwise) need to be factored in, if a performance orientation is to be pursued.
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    Signing off for 2013...

    Phd Research Societal Wellbeing
    Unless something compelling occurs in the next few days, this blog entry is likely to be my last for 2013. Christmas is upon us, so it is time to pause.

    Christmas can mean different things to different people. For some, the deep spiritual significance of remembering the birth of Jesus is almost palpable. For others, Christmas is an opportunity to buy and give gifts, to eat and to catch up with family and friends. Yet others enjoy Christmas because it is "time off"—a holiday. However you spend Christmas this year, may it be a joyful time for you.

    Overall, I've had a good year. The opportunity to travel (to speak in Australia, Asia and Europe), to meet some wonderful people, and to spend time pondering some pretty tough questions to do with my research, has been amazing. While there have been several times during the year when I've felt becalmed, it's not until I've stopped in the last few days and looked back that I've realised just how far I've travelled. I hope it's the same for you as you take stock this Christmas season. Thank you for your support and encouragement throughout the year, I appreciate it.
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    On shareholder primacy, groupthink and hubris

    Governance Leadership Management Performance Research Strategy
    I spent much of the day yesterday in the company of my doctoral supervisor, an outstanding Masters candidate and a very capable governance consultant. The purpose of the meeting was to tackle some interesting—and rather challenging—questions to do with the practices of governance, hubris and groupthink, collective decision-making and cognitive biases. In addition to being topical (read further down this blog), these topics seem to be important building blocks towards gaining a robust understanding of governance in practice. Others appear to be exploring similar topics as well.

    We made good progress, but a long list of questions and opportunities to dig deeper remain. While I'm not at liberty to discuss what emerged, several seemingly separate strands of thought, research and practice appear to be coalescing. Normally when I come away from such sessions, I listen to a podcast to clear my mind. However my mind was in overdrive yesterday as I drove home. Could a grand theory of governance, so long ruled out by many, be possible after all? 
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    AUT governance symposium: reflections

    Conferences Governance Leadership Management Research Strategy
    I had the privilege of attending a corporate governance symposium in Auckland yesterday. The one-day symposium, hosted by Auckland University of Technology (AUT), was held in the recently opened Sir Paul Reeves Building on the main AUT campus. It's a great facility. Approximately 30 researchers and other experts, including several international speakers, gathered to discuss recent developments in the field of governance. Topics included ethics, performance, diversity, technology and remuneration. There were seven main presentations throughout the day, and twelve supporting papers (presented in two concurrent streams after morning tea and after lunch). Some of the main presentations are summarised below:
    • Thomas Clarke (University of Technology, Sydney) provided the opening keynote. He spoke about emerging challenges for directors, not the least of which is structural. While the four primary functions of the board are strategy formulation, policy making, monitoring and supervision and accountability (see, R. I. Tricker), most boards spend most of their time monitoring performance, a past-focussed, internal activity. The changing context of business requires that boards embrace change, lest any value that they are able to deliver is lost. This includes the adoption of meaningful (board performance) evaluation processes, embracing a greater level of diversity around the board table, and the gaining of a greater knowledge of the business being governed.
    • Vincent Naidu (VINCI Law) provided a sobering reflection when he spoke about the duties directors owe to shareholders and to the company, and the consequences of not fulfilling these duties. He suggested that nine out of every ten failures fall into the second category—failures by directors to fulfil their duties to the company. Most of the breaches can be described with one of four summary descriptors: responsibility transference; passing the buck; "it wasn't me, it wasn't me"; and, "it's all about me". Naidu reminded delegates that the word governance is derived the Greek word kubernao ("to steer"). Directors need to keep a watchful eye, and they cannot afford to fall asleep at the wheel. Sadly, many still do.
    • Julie Cassidy (AUT) summarised proposed changes to the Companies Act, particularly provisions to criminalise breaches of certain duties of directors. The proposed changes are limited to serious breaches of sections 131 (act in good faith) and 135 (reckless trading). In contrast, the scope of the provisions in the Australian statute is much more extensive. Cassidy called for officials and politicians to look at the Australian context more closely, with a view to including a more extensive set of provisions. There is considerable resistance to the addition of any criminal consequences in some quarters (surprise, surprise). However, the disreputable actions of some have tarnished the reputations of the majority (who are well-meaning and hard-working). So, something needs to be done. 
    • Kevin McCaffrey (Effective Governance Consultants) spoke passionately about advisory boards. He asserted that many owners of small-medium enterprises (SMEs) and consultants to SMEs simply don't understand vital differences between boards of directors and advisors to boards. In the eyes of the law, groups of advisors that meet regularly and perform duties similar to those of directors may be deemed to be acting as directors. Consequently, they bear all of the legal responsibilities, accountabilities and consequences of a director, even though they don't realise it. The safest way forward for groups of advisors is to avoid "advisory board" language, and to meet on demand for specific advisory tasks only. McCaffrey's talk provided a welcome and timely wake-up call. SME consultants, business incubators, angel investors and professional bodies all need to take note.

    The symposium delivered great value to attendees—if the many complementary comments overheard during drinks at the end of the day is any indicator. Dr Coral Ingley's vision, and hard work to breathe life into it, needs to be acknowledged and applauded. Well done Coral. I hope the AUT corporate governance symposium becomes an annual event, to bring researchers, experts and (importantly) practitioners together to share and test ideas, in order to improve governance in this part of the world. It would fill a gaping void.