Tag: Board Effectiveness

Focus

What do you see?

How clearly?

How far do you see?

My picture shows the Kerry Peninsula in Western Ireland taken from the Dingle Peninsula. Do you focus on the surf hitting the shore along the impressive 5 km Inch Strand; the sparkling track of light across Dingle Bay; the mountains of the Ring of Kerry or the extraordinary variety of cloud formations. Do you anticipate the arrival of Storm Agnes moving across the Atlantic Ocean and due to hit Western Ireland a few hours after I captured this picture. For those of you who have joined me virtually, you will have seen my library of cloud formations used as backgrounds. My eyes are drawn to the far horizon and then move to the foreground before widening to encompass the whole picture. 

Many ‘experts’ have long advocated that we need to hold different horizons in mind at the same time, among them McKinsey 3 Horizons Model

What we naturally focus on is not automatically the same as colleagues. We each have a unique strengths profile which includes our propensity to focus on detail and our ability to see strategic horizons. What may seem obvious to one person may be obscure to another. Cognitive diversity is prized as contributing to better thinking and decision making. Creating an environment in which different perspectives are honestly shared is an essential foundation to effective governance by boards.

It takes effort to hold now, soon and the future in mind. When times are tough, the frequent response is to focus on survival now. The business challenges of the past five years have provided stories of organisations managing crises effectively but failing to think beyond the immediate situation.

We are also aware of imaginative businesses that made tough decisions about activities they needed to modify or stop and others they needed to invest in and launch. Courage, curiosity and creative thinking characterised the successful navigators. Importantly, the leaders in these businesses demonstrated an interest in and empathy with their internal and external stakeholders, engaging in continuous conversations and providing a strong sense of purpose and direction.

Wise boards are able to shift their focus according to priorities. Increasingly they consider immediate matters requiring their decision making and strategic issues for reflection and discussion at each board meeting. The practice of separating strategic thinking and planning to an annual or six-monthly event can prevent the entrepreneurial and opportunistic leadership required in volatile times.

Where trust exists between the board, the business and it’s stakeholders, it lays the foundation for empowered operators to make responsive decisions to adapt and meet the requirements of their markets. Tracking performance, recognising contributions and celebrating adaptability are important board activities, which create focus and sustain momentum in their businesses. They require the visible and inspirational involvement of directors with genuine curiosity and a desire to listen and learn.

Returning to the picture above, what did you see? The following situational questions provide food for thought about focus:

Now – presenting situation.

Q: What is the tide state and when will it turn?

Q: What time of day is it and where is the sun positioned?

Q: What is the air pressure and visibility level?

Soon – emerging themes.

Q: How soon will the light change – sunset time?

Q: What is the wind direction and speed?

Q: What weather fronts are expected, when and what severity?

Later- alternative developments.

Q: What are the levels of erosion impacting the coastline and how will global warming impact the communities living on the coast of Western Ireland?

Q: How will the local seafaring industries – fishing and tourist excursions – be impacted by changes to the sea and weather conditions?

Q: How can the community of Dingle Peninsula adapt to changes in their natural environment?

Contemporary thinking?

How do I stay current?

Expertise takes effort to achieve. It can carry recognition, qualifications and position. The danger is always to rest on our laurels.

Our expertise must be relevant and relevance is impacted by changes to the context in which our expertise will be applied.

Staying current takes continuous and consistent effort.

September seems to be the month when clients ask me this question. Perhaps a Summer break has provided time to reflect and individuals have returned with a renewed appetite for auditing their currency. Quarter four will certainly be a busy one for boards with increased regulatory and legislative requirements to fulfil and contemporary thinking to apply.

Three habits to develop and nurture:

  1. Develop curiosity and healthy scepticism.  Many thought leaders highlight the importance of investing time in reading and listening. In a busy world with continuously shifting priorities and deadlines, protecting this time requires our active commitment and regular practice. We also need to avoid living in an echo chamber where only inputs which support our world view manage to get through the natural filters we apply.
  1. Recognise the changes which are material. Tools exist to enable us to focus on what is relevant for us now and for the future. These need to be imaginatively rather than mechanistically applied. When we set filters to help focus our efforts, it is important to recognise that they need monitoring. We also need to be realistic about our capacity to track changes and avoid noise. Our efforts are enhanced when we identify sources which provide aggregated and unbiased insights and learn to recognise patterns and interconnections.
  1. Seek relationships which will constructively challenge our certainties. In order to connect with people and sources who don’t think like us, we need to be open minded and willing to adapt our thinking. This habit is less comfortable than a natural gravitation to familiar communities. The value of cognitive diversity on boards is well publicised. Encouraging a wide range of voices to inform our thinking and decision making has been a feature of high- performance boards and individual directors.

Benefits:

  1. Continuous surprise. When we travel hopefully and take alternative paths to inform our thinking and decisions, we avoid boredom and dated or obsolete thinking.
  1. Ability to contribute valuable insights. With currency comes amplification of our voice and invitations to share insights with others.
  1. Network of sources and relationships. Collaborating and working in partnership to scan an increasingly complex world, builds trust and a wider understanding of our context. From tracking what has and is happening, our focus can change to discussing how change may develop in the future.

Where to start:

It is often said that making a habit takes 21 days while ensuring it is embedded takes 90 days. Choosing to develop the three habits mentioned above will also involve deciding what we are going to stop doing. A conversation with our coach, mentor or sounding board is a useful first step.

‘The headhunter just rang. Should I be interested?’

©Lucy Burley Ceramics

In these challenging times, choosing to lead an organisation requires Situational Intelligence – knowing yourself well and understanding the context in which you operate. The following thoughts and questions are based on our Situational Intelligence methodology, co-created with Dr Laurence Lyons. They are informed by applying that thinking when coaching in the c suite and facilitating board development. 

A director’s perspective

Sitting on a board is a responsibility and a privilege. People expect much of the individuals who lead organisations whether in the public, private or third sector. Scrutiny is continuous. Personal reputations are precious. They take time to build and can easily be lost.

The roles of directors and trustees should not to be undertaken lightly. It is wise to carefully pick the boards you join and ensure that you are properly supported in order to effectively fulfil your duties and obligations.

Whether you are a director of a large, listed entity in a regulated sector, a trustee of a charity, a director of a hospital or the founder of a small business, you are responsible and your liability can be unlimited. Look down the road and you will see more regulation and legislation coming.

There are no universal solutions, so understanding your context matters and informs the strategic choices you make. It is also important to recognise that as a member of a board, your beliefs, decisions and behaviour have a significant impact on the value you contribute to the organisations you lead.

Situational Intelligence.

Dr Laurence Lyons and I started working together in the early 1990s at the launch of The Henley Future Work Forum. We combined our experience of supporting boards and directors to highlight a different way of thinking, more relevant for the complex and changing business environments in which we operate. The result is our Situational Intelligence methodology, a pragmatic approach to making sense of our complex and volatile world.

Situational Intelligence is based on understanding the strategic context in which you operate, what your organisation is here to do, what it believes is good and right, what it wants to achieve and what priorities it has set. Defining your situation – your objectives and the people you need to engage with. Understanding what motivates each individual in that specific situation. Recognising your own strengths, potential and reputation. Once you have developed those insights, you are in a position to choose the approach which will create a motivated community of people prepared to enable you to achieve your objectives. 

Responding to the headhunter – due diligence questions

Q1 Exactly what role is being offered?

Will the position provide me with the power to influence/decide/act?

What responsibilities and accountabilities are involved?

Therefore, what is the level of risk/liability and how does that fit with my own risk appetite?

What am I expected to give and what return will I get? What are the costs and benefits in tangible and intangible terms.

What value could I bring? Why me?

Q2 Would the right people be there with me?

Does everyone know what we are here to do – the purpose?

Does everyone know what board capability we need to deliver that purpose?

What value does each individual contribute?

Where are the board capability gaps? How could I fill them?

What is the boardroom culture – collaborative:challenging?

Q3 Are we clear about the way we will operate?

What governance framework would enable me to provide the expected value?

Where is the focus of the board’s attention – strategic:operational?

How diverse are the voices and insights offered and heard in the boardroom?

What opportunity exists to empower others to lead?

Is the board fit for purpose or fit for the future?

Navigating your path

Stepping forward takes courage. Awareness of your own strengths, style and reputation/ brand can increase your confidence. Your success is often based on your ability to contribute and orchestrate the contributions of others.

Curiosity helps you create and recognise opportunities, particularly those that are counter-intuitive. Preparing for those opportunities involves reflecting on the past, learning in the present and positioning yourself for the future.

The importance of developing a support network cannot be overstated. Ensuring you have a sounding board will enable you to engage in safe but challenging conversations. Expectations can be high that you will always have the answer. Your network is powerful when it included diversity of thinking and exposes you to a wide range of ideas.

It is always flattering to be approached but choosing wisely is essential for success.

Searching for Amber

Alderburgh Shoreline – Summer Solstice Sunrise

After asking thousands of directors and their governance advisors to define what they mean by ‘Good’ business, the themes over several decades have largely remained the same though the language and emphasis changes.

‘We admire organisations with a clear sense of purpose. They must also tell a compelling story about what they believe in and where they are heading.’

‘Good’ businesses are well led by boards able to challenge and arrive at cohesive decisions. They invite contributions from a variety of stakeholders, to inform their choices.’

‘The best board decision-making is informed by an understanding of the organisation’s capability and capacity, together with the environment in which it operates. Risks are assessed against appetite, beliefs and the requirement to be agile in a changing world.’

‘The golden thread between beliefs, decisions and actions is transparent.’

This apparently simple agenda is difficult to formulate, implement and sustain. In 2023, the debate focuses on ethics, sustainability, ESG and EDI. These themes have pre-occupied boards for decades, though their mnemonics change.  

Multiple initiatives exist to identify, promote, audit and enforce ‘Good’ practice. Some are regulatory and some are advisory. For example:

The UK FRC Stewardship Code principles provide a clear framework to require asset owners, managers and advisors to enable investors to make informed choices.

The IFRS International Sustainability Standards Board recently published their reporting standards IFRS 1 and IFRS 2. They have been designed to enable organisations to evidence both their company performance and their commitment to driving sustainable value creation. The results should enable better informed investor choices.  

Since 2006, the B Corp movement has been certifying organisations globally and sharing ‘Good’. Their JEDI framework is one of a number of tools designed to enable business to be a force for ‘Good.’

However, despite the publications of standards, regulations and best practice sharing, adoption is slow. PwC publication Strategy + Business July 2023 highlights the gap between sustainability agendas and their delivery. 81% of investors will tolerate a small decrease (1% point or less) in profitability in exchange for ESG action.

Organisations position their beliefs and direction and we, as investors, may choose portfolios with good business credentials but be unwilling to forego returns in the short term. As customers of those same organisations, we may be attracted to those whose philosophy matches our own. The critical question is whether we are prepared to modify our expectations of the products and services they provide in order to support their investment in long term sustainability.  

And as I publish this post, today’s mail from McKinsey asks ‘How to create a more sustainable, inclusive and growing future.’

Something to reflect on while watching the tide roll in. And for the curious, sadly I haven’t found any amber yet but I did see the sun rise.

Governance Leadership Programme 2010 – 2022

This is the moment to thank the many individuals who collaborated and contributed to the Governance Leadership Programme (GLP) over the past twelve years. With publication of the Governance Hot 100 2023 it is wonderful to once again see Alumni among the nominees and winners.  

Back in 2010, prompted by enquiries from my clients, I approached the Joint Managing Directors of the Institute of Chartered Secretaries and Administrators’ (ICSA’s) commercial business. We discussed the need for The Institute to provide non-technical personal development for senior, experienced professionals. The GLP was co-designed to enable individuals to develop Situational Intelligence™. Participants were provided with opportunities to reflect on how they thought, decided and behaved in the situations they faced. Providing facilitated conversations in trusted groups and peer and professional coaching, the programme reached a global alumni of governance professionals drawn from CGIUKI and  Europe, Africa, Asia, North and South America. With a focus on currency and practicality, GLP encouraged hundreds of individuals to be curious and brave.

Among the many inspiring colleagues, speakers and hosts who shared their own stories and insights, special mention goes to:

Will Booth who co-designed the programme and bought so many people together in this valuable collaboration.

Simon Osborne who was an active and enthusiastic sponsor and advocate.

David Venus and Charis Evans who were among the gracious hosts.

Chris Moon who excited and challenged each group to explore their own resilience.

Victoria Whyte, David Press, Jeremy Small, David Gracie, Annemarie Durbin, Rob Bellhouse and Lyn Coloff who were among the many wise and generous speakers.

Ten of the best #GLPWisdom

  1. People always remember how you made them feel #GLPWisdom
  2. The biggest limit in life is the way you choose to think #GLPWisdom
  3. Understand your strengths and reputation #GLPWisdom
  4. Be easy to deal with, a capable and safe pair of hands #GLPWisdom
  5. Understand the language of the boardroom #GLPWisdom
  6. With difficult people find out why they are behaving like that and work on an accommodation #GLPWisdom
  7. Flex your style to fit the situation #GLPWisdom
  8. Create the opportunity for healthy tension and robust debate #GLPWisdom
  9. Be curious, learn continuously and know what is coming up #GLPWisdom
  10. Build your support network #GLPWisdom

Thank you all.

Anna Bateson,

Founder of Cutting through the Grey

GLP Programme Director

Board dynamics

Insights from practitioners

In conversations with Chairs and CEOs from across the private, public and third sectors, a number of clear themes are emerging on HOW TO create and sustain effective Board dynamics in tough times. The insights fall into three key areas:

Develop effective connections:

Meet Directors on a 1:1 basis between formal events to build relationships based on a real understanding of each individual’s strengths and ability to contribute to Board discussions.

Identify how each Director operates, the way they prefer to engage and the format in which they can digest information to inform their decision making.

Check out assumptions to make sure they are well founded. Don’t fall into the trap of ascribing views to individuals based on your own perceptions.

Create continuous dialogue:

Tell the whole story to everyone, not partial stories to different audiences. They are all instantly connected and will know.

Tell the truth. It builds confidence and trust, which will create resilience in tough times.

Listen to insights and challenges, particularly from stakeholders who hold different views.

Build understanding of context:

Focus the Board on strategic discussions and avoid tactical game playing, however satisfying for individual egos.

Develop the big picture but ensure that operational reality checks also occur.

Ensure that there is collective understanding of risk appetite and that it informs your discussions.

And the final message from practitioners:

“Don’t try and bounce the Board!”

Reflections 3 years on

March 2020 Looking back at my diary, the month started with a busy week facilitating a number of different workshops for Boards of Directors and Governance Professionals in London. On Friday 6 March I replanned all my Q2 scheduled activity for virtual delivery. Looking back, it is difficult to identify the single trigger which prompted me to replan. Based on my experience as a founder member of The Henley Future Work Forum (FWF) back in the 1980s, and my subsequent collaboration with Dr Laurence Lyons, the FWF co-founder and Research Director, the technological and behavioural transition was smooth. I am fortunate to have a valued support network and trusted client relationships.

Adversity Much of my time over the last three years has been spent supporting business leaders as they navigate adversity. The privileged position of being invited to talk with leaders across multiple sectors and territories, highlights two truths:

– Adversity corrodes inspirational leadership

– Adversity reinforces inspirational leadership

Identifying angels and devils has pre-occupied business authors for decades. The corrosive damage which toxic behaviour can wreak on any organisation is universally recognised. Perhaps it is surprising that multiple recent examples exist of visible devilry being tolerated and condoned. The behaviour can be viral and damages people.

Conversely, spirits lift with examples of inspiring leadership practiced passionately and altruistically. This celebration of angels is also viral and draws together communities of loyal followers, eager to share and collaborate.  

Leaders Our decisions and behaviour are scrutinised to determine whether we are devils or angels, or perhaps a bit of both. Taking time to consider the impact we have on others is essential, but as a solitary activity we can be selective in what we choose to see and believe. It takes curiosity and also bravery to develop self-awareness of the real impact of our behaviour and how people perceive us.

Relationships Resilient and agile leaders nurture relationships, investing time and effort in building and sustaining trust. These relationships extend beyond the boundaries of their organisations and create continuous conversations which lead to shared solutions to challenges. It is heartening to hear many examples of supply chains and customers collaborating to sustain organisations in the difficult trading environment of the last three years.

Constructive challenge Talking to people who don’t think like us takes more effort but provides insights which may be far more valuable than existing in an echo chamber. Inspirational leaders are increasingly ensuring that they make robust strategic decisions by creating small groups of empowered individuals with the brief to rigorously test implications and impact.  The practice is not new. When co-writing the British Airways Leadership Story with Tony Voller back in 2004, we highlighted how the CEO, Rod Eddington, navigated the airline through 9/11 supported by a ‘Gang of 5’ constructive challengers who gathered ideas and perceptions from across the airline and beyond.

Learning The last three years have been characterised as ‘unprecedented.’ Reflecting on  the organisations who have navigated well, one characteristic stands out. They have experienced adversity before and learned from it. Going far beyond a mechanistic review process generating ‘lessons learned,’ these organisations have probed to discover causes behind symptoms and developed new ways of operating which anticipate change. Mistakes are shared not hidden and ‘near misses’ are discussed openly. This behaviour requires the visible sponsorship and involvement of all leaders to become instinctive. It requires inspirational leaders.

Behaviours to admire

As the season for recognition and awards progresses, stories are shared of the behaviour which defines excellence in organisations and their leaders.

With the privilege of coaching directors and their advisors over many years, delivering chartered qualifications and judging professional awards, common themes are apparent to me. They highlight the behaviour we admire and seek to emulate:

Explaining why – Organisations, initiatives and individuals who can clearly articulate their purpose are able to attract and retain the interest and attention of their audiences. Their decisions and behaviour are continuously judged against that purpose.

With a human face – It is easy to intend being clear about what you believe in, taking decisions in the light of those beliefs and behaving in a way which is consistent with your stated principles and values. Living your values at organisation and individual level takes effort but pays dividends. Values in practice are evident in the opportunities you choose not to pursue as well as the actions you take.

In conversation – Award-winning organisations and individuals recognise the importance of visible and continuous dialogue with their stakeholders. Their project Gannt-charts have ‘engagement activity’ as the top line. Effective conversations listen to the unfiltered voices of diverse people and respond in a way which demonstrates appreciation for ideas contributed and an understanding of concerns.  

Working together – Collaborative ventures, based on common understanding and commitment, deliver value for all participants. Identifying individuals and organisations with complementary strengths provides a foundation for creating productive and enjoyable relationships. Award winning partnerships are defined by natural curiosity, the desire to look beyond the current and obvious and anticipate changing trends and the opportunities they provide.  

For the greater good – Altruistic leaders, clearly motivated by more than self- interest, attract loyal followers. They understand that leadership is about more than directing and controlling. The generosity of spirit which enables others, characterises excellence. The media have labelled the late Queen Elizabeth II as a globally recognised exemplar of ‘servant leader’. Recognising the organisation as a separate legal entity, identifying the expectations and aspirations of all stakeholders and balancing the collective good are all characteristics of award-winning organisations.

And delivering – Promises made and kept inspire trust and confidence. They epitomise an organisation’s or individual’s lived brand. Intentions are laudable but delivery is essential. Excellence is demonstrated by behaviours that pay continuous attention to progress against objectives and that track both the achievement of outcomes and the approach taken.

Directors ask the right questions to develop ‘Situational Intelligence’

Effective boards know how to ask questions of their organisations and board advisors. The opportunities for individual directors to ask searching questions are often greatest during their own due diligence activity through the recruitment, appointment and onboarding process.

Remaining curious and asking challenging questions is an essential strength for any director. Vigilance is better than complacency given the significant responsibility and liability which directors carry.

Rigorous questioning can establish:

– Fashion or true sentiment

– Initiative or strategic intention

– Clear purpose or agile rebranding

– True or disposable values

It pays dividends to develop a real understanding of the context in which you are expected to add value as a director.

Words matter, behaviour must follow

Over decades, business language has developed. Fashionable boardroom vocabulary adopts three letter acronyms referencing philanthropy, socialisation, corporate responsibility, compliance, governance, stakeholder engagement, sustainability, diversity, inclusion, environmental conscience. The words which leaders use may change but to be trusted, true sentiment must be apparent and behaviour must follow.  A strong foundation for trust is to develop a clear and common understanding of what the words mean.

Purpose – why we exist

Purpose guides strategic choices, provides clarity and a rationale for activity.  It is seen by internal and external stakeholders and can guide consistency of messages. Director due diligence pre-appointment will often involve making judgements on the clarity and resilience of an organisation’s purpose.

Culture – what we believe and how we behave

Our values are evidenced by what we choose not to do as well as what we do and how we do it. Shrewd Director candidates use every opportunity to establish the extent to which beliefs, principles and values are embedded in an organisations’ practices. Beyond a menu of fine words is the reality of what is acceptable behaviour. Valuing difference underpins the practices which deliver diversity and inclusion. 

Strategy – what we aspire to be and how we will deliver that aspiration 

Multiple metrics arrive in the boardroom. Newly appointed Directors are in the privileged position of contributing to and observing strategic decision being made. Astute individuals notice what really drives strategic decision making and the success with which the organisation balances the requirement for short term performance with the need to build long term stability. Understanding the board’s appetite for risk and change and the level of organisational agility, helps newly appointed directors to challenge effectively.

Stakeholders – who we choose to work for and with

Our brand is a promise to our stakeholders. In a transparent world, all stakeholders can see the promises we make to each other. We are judged on whether our promises are fair and whether we keep them. If we can’t keep our promises we are judged by the clarity with which we explain why. In today’s turbulent world, demonstrating an understanding of  the attitudes, aspirations and intentions of organisational  stakeholders is one of the most critical strengths a newly appointed director can evidence.

Responsible business

Government, regulators, investors, talent and consumers are among the many stakeholders calling for clarity on the ways organisations make strategic decisions, prioritise and implement those decisions. Evidence is required to demonstrate materiality, commitment, action and the impact of initiatives.  The way in which a board formally and informally reports progress and performance is critical in developing stakeholder perceptions of the voracity of the board. Being a director is not for the faint hearted.