Archive for April, 2012

Governance is not a 4 letter expletive – a couple of lessons on the G-word

I learned a couple of unexpected lessons last week, and like many lessons in life, I’m not sure I feel the better for having learned them.

I have the pleasure of hanging out with a team of clever, capable consultants who mostly work with the management in client organisations, while I help their boards.  We were doing a workshop together, as part of a team training day, on “governance”.

I have an esteemed and proper friend who commented to me a while ago that: “After the C-word, (which he in fact spelt out carefully in all its 4 letter glory) the second worst word in the English language is ‘governance’.”  Apparently he was still scarred by an experience related to the G-word in a continuing professional education session he had recently to endure.

So here’s Lesson No. 1:

When I asked the group each to talk about what the term “governance” brought up for them, the broad consensus was that it is (in a verbatim from one team member) a “necessary evil”.

Somehow we have created around the concept of good corporate governance some strongly negative perceptions – of a function that has to be endured, rather than one which adds value.  It seems pretty clear that it is time to shift the debate, even if for starters we just edge gradually towards “necessary, but not evil”.

And Lesson No. 2:

Rather than spend the whole afternoon talking about legalities and structures, I hoped it might be enlightening to actually hold a board meeting – well, a mock one anyway.

We took as the major piece of business for our board meeting the most likely scenario this team would encounter in their day to day interface with boards: the approval of the organisation’s strategic plan for the next 3 years.

I allocated each team member an admittedly stereotypical role as a director, then let everyone know the broad nature of each other person’s role, and gave each of them some additional detail about their own role that the others wouldn’t know.  We used an abbreviated version of an actual client strategic plan as our documentation (but kept ourselves under Chatham House rules).

A couple of the roles were for directors who had some reasonable and objective misgivings about aspects of the plan;  another director was to play the self-appointed black hat thinker.

The chairman, without being specifically scripted to do so, took on as his job to get this strategic plan adopted.  While he carefully gave each director an opportunity to express their views, including the doubters and dissenters, he eventually applied a firm hand to push strongly for, and ultimately achieve, a resolution in favour of approving the plan as tabled.

The insight for me?  Major pieces of board business can take on a life of their own, with some real or manufactured imperative seeming to require their acceptance as proposed.

A debrief with the team afterwards revealed that the directors with concerns and misgivings felt that, even though they had been given a hearing, they had been steamrollered by the eventual adoption of the plan.  Their concerns, while having been aired, were not given sufficient consideration to be addressed by any amendments to the plan.

The chairman, though flushed with the success of having secure his resolution, was candid enough to admit subsequently that he might have been “a little manipulative”.

The comprehensive and internally consistent plan just looked, to the majority, too bullet-proof to accommodate challenge and tweaking.

Chairs, and supportive majorities, need to be careful not just to believe that giving dissenters a hearing is enough to deal with their issues; and to recognise that those issues might be serious enough to stop the momentum, and allow consideration of changes to that all-encompassing plan set out in the 65 very impressive PowerPoint slides from the consultants – even if doing so might all seem a bit inconvenient.

Note to chairs:  no, it’s not actually all about you, and whether you get the proposed resolutions up.  It’s what is best for the organisation as a whole, remember?  Which is not such a bad way to run a board, is it?

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