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    Stepping beyond the summer of (boardroom) malaise. But how?

    Accountability Decision Making Governance Performance Research Strategy
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    In recent months, news of another round of corporate scandals (Mintzberg thinks 'syndrome' is a better descriptor) have dominated our newspapers and Internet news feeds. All seem to be failures of corporate governance: HSBC, FIFA, Toshiba and, most recently, Volkswagen. While failure is nothing new, why have these failures occurred and why now? What's happening (or, more probably, not happening) in our corporate boardrooms at the moment?
    While each case is to some extent unique, an interesting pattern starts to emerge if we stand back a little and take a holistic view of several failures together: a well-regarded business, with both a strong trading record over an extended period and great brand equity commensurate with its public reputation, hits turbulence leading to failure or scandal. Questions are asked, investigations follow, significant irregularities are exposed and fingers are pointed. Eventually the spotlight is turned onto the board. All roads lead to Rome, after all.
    The seemingly steady flow of failures has seen a great malaise descend over the business and investor community during the northern summer. Measures developed to reduce the incidence of failure (including the OECD corporate governance principles and various in-country codes) have not had the intended effect. Indeed, they have rung hollow. To the casual observer, the situation seems to be bad, possibly hopeless. However, glimmers of hope are starting to appear.
    In the past six weeks, I have asked all of the director groups that I have spent time with for their opinion—as a litmus test of sorts. A strong majority of the 350+ directors across several countries (England, Eire, USA, New Zealand and Australia) say things need to change. Most think that current conceptions of board practice and corporate governance are not helpful if the goal of business is value creation; and that strategy needs to feature more prominently on the board's agenda. While most of the commentary is anecdotal, it is consistent with emerging research.
    Could this small sample of emerging and established directors of mid-size businesses be the vanguard of change? I've begun exploring ideas with several boards—on the assumption that the answer is yes. However, this is a case of the more the merrier so please get in touch if you want to 'join the party'.
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    Volkswagen emissions debacle: portent of a bigger problem?

    Accountability Decision Making Governance Leadership Management Research Strategy
    News that Volkswagen AG has been systematically pulling the wool over the eyes of its customers, regulators and the stock market has resulted in a predictable and rightful backlash this week. The stock price has plummeted, the brand reputation is in tatters and the chief executive is gone (albeit with a stellar severance package and not before attempting to deflect blame towards others).
    The crisis raises all manner of issues, and many different levels. That the board apparently knew nothing of the problem is a bitter pill to swallow. Why not? Was the board asleep at the wheel, or was something else amiss? That it then made all manner of comments heightened the concern.
    Once the emission cloud settles and people gather to understand the root cause, the folk at Volkswagen could do far worse than to look in the mirror—and specifically at how corporate governance is practised. That the two-layer board structure lacked knowledge suggests either ignorance (the board was asleep) or collusion. Neither option covers the boards in glory.
    Might this sad case take us closer to a tipping point, of finally admitting the extant conception of corporate governance (a compliance framework of processes and controls, predominantly) is conducive to neither long-term business performance nor value creation? And, if so, will action be taken to embrace new conceptions of corporate governance, board practice and value creation? For the good of all stakeholders and society more generally, I hope the answer is yes.
    Are you troubled by the Volkswagen experience? If you want to explore new conceptions of corporate governance that are informed by robust research and real-world experience, and test their applicability in your boardroom, please get in touch. I stand ready to help.
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    "Involve the non-executive director in strategy"

    Accountability Decision Making Governance Performance Research Strategy
    The board's involvement in strategy has been hotly debated in some quarters in recent years, especially as the focus of attention for business performance has moved from the chief executive to the board. Is strategy the domain of management, or of the board?
    Thankfully, the extreme options (strategy is totally the responsibility of management or imposed by the board) are no longer widely supported. The discourse seems to be coalescing on the more collaborative options of a board-led, managment-led or a joint development process—although the merits of which one of these is 'best' continue to be debated.
    Once directors and managers understand what strategy is (check the graphic), a decision to actively involve the board seems obvious. If the purpose of the board is to ensure the long-term performance of the company, in accordance with the wishes of shareholders, why wouldn't the board roll up its sleeves?
    An increasing number of commentators are now nailing their colours to the mast on this point. For example, this article, published in Director (the Institute of Directors' magazine), recommends that all non-executive directors (NEDs) should be actively looking at all strategy options and be making strategic decisions. I couldn't agree more, but would add that all directors (not just NEDs) should be involved in the process, together. While this recommendation demands more of directors, emerging research seems to suggest the approach is not without merit.
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    When boards are dissected, they are no longer boards

    Decision Making Governance Leadership Performance Phd Research Strategy
    The modern society we live in has many benefits. Life expectancy and well-being have steadily improved for many: health and education being important building blocks. Most would agree that progress has been 'good'.
    Paradoxically, life has become more complex in some quarters, and answers to some everyday problems remain elusive. The human response to complexity—dissection in search of 'truth' and understanding—has not helped. The reductive assumption that the sum of knowledge of the parts explains the whole is helpful in science, but in social science it fails. Companies (boards, in particular) are a case in point. The pursuit of a single truth ('best practice') is about as helpful to understanding how boards work as dissection studies of body parts is helpful to understanding how humans interact or experience life. 
    The problem is that when boards are dissected and individual elements are studied in search of answers about how boards work, the subject of research is no longer the board. Thus, the very essence of the socially-dynamic entity (the board) being studied is lost. As a consequence, any conclusions cannot, by definition, be representative of what the board as a whole is, does, or might contribute. 
    If we are to understand how boards work and to discover any relationship between boards and business performance, boards must be studied holistically: both in situ and in action. While every situation considered by a board is (to a greater or lesser extent) unique, emerging research suggests that some patterns can be discerned if the empirical data collected from within the boardroom is abstracted. An important dependency appears to be the decisions made by the board when it is in session. The quality (and, therefore, the potential impact) of board decisions appears to be associated with the quality of social interactions between directors and qualities of the directors themselves, as they seek to fulfil their duties. These qualities and social interactions are the subject of my doctoral research, currently before the examination panel. I look forward to sharing the results of this work, here and elsewhere, once the examination process is complete.
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    Applied research: Strategy in the boardroom

    Decision Making Governance Leadership Research Strategy
    My nine-day visit to the UK and Ireland to discuss board and corporate governance topics and to share emerging research with board directors, executives and academics is drawing to a close. From meetings in the hallowed halls of the Institute of Directors on Pall Mall, office buildings, various fine dining restaurants and cafés, and university premises in Wolverhampton and Ulster; to master class presentations and a guest lecture, it has been a delight to engage with people who are deeply interested in corporate governance and the board's role in business performance. Thank you.
    Now, the task of addressing the numerous requests for more information, and to schedule future meetings, speaking and advisory engagements beckons. This is my priority over the coming days.
    Amongst the enquiries and discussion notes, several people have asked for more information about strategy in the boardroom. While I have written about this in the past, and strategy has been a core element in my doctoral research, interest in up-to-date applied research appears to be high. Given this, my intention is investigate some of the practical challenges faced by boards over the coming months and to publish the findings. However, such research needs willing participants...
    If you or your company board might be interested in participating in research, please get in touch. I am particularly interested in publicly-listed firms, high-growth businesses and social enterprises; in the UK, Europe, the US and Australia. Your expression of interest and any decision to participate (or not) would be entirely confidential, and neither you nor nor your company or social enterprise would be identifiable in any research report that ensues.
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    48 hours in (close to) paradise

    Accountability Decision Making Governance Leadership Performance Speaking Engagements Strategy
    When travelling, what's your favourite destination? Mine—from a work perspective anyway—is anywhere where board directors and executives who are eager to debate issues of boardroom practice and business performance. Since Tuesday evening, I have been in Dublin, Belfast and Dublin (again) doing exactly that—addressing groups of directors and answering questions. Matters of strategy in the boardroom; diversity; board structure; accountability; and, culture, amongst other topics, were discussed with vigour.
    To work with well over 70 directors and executives, all of whom were motivated by the discovery of board practices that might lead to improved business performance outcomes, has been wonderful. Thank you to the Ulster University Business School and the Irish Times Training for inviting me to visit the Emerald Isle to work with such influential people. That these busy directors and executives gave their time to debate important issues bodes well for the future performance of Irish businesses and social enterprises. I look forward to hearing great stories of success in the months to come!