Friday 6 Jan

An interesting paper ( Michael C. Withers, Amy J. Hillman and Albert A. Cannella, Jr. "A Multidisciplinary Review of the Director Selection Literature" Journal of Management 2012 38: 243) raises the question about how directors make decisions about serving on boards which I identified as an important lacuna in NED research in the paper I presented in Brussels (Dec 2010, can't believe it was more than a year ago and I still haven't found the time to write it up properly). The authors don't answer it, of course, but it's good to see it flagged up as an issue that needs to be investigated.

Their review seems very comprehensive and well-organised. I like the way they use Mace, and Lorsch and Maciver, two classic texts on directors, as ways to classify the literature. Their discussion of the bifurcated market for directors - broadly,some sought for monitoring, some for resource provision, as I understand it - raises another point. The UK literature suggested that there was a tension for NEDs between the roles of monitor and advisor (Ezzamel and Watson used the nice metaphor of wearing two hats) but the work done by Roberts, Stiles and McNulty which underpinned the Higgs report seemed to contradict that, or at least indicate that NEDs didn't see this as a problem. The difference hinges on whether a single individual is expected to perform both roles or whether the numbers of NEDs on the board is sufficient to allow the appointment of individuals to fulfil more specifically one of the two roles. As UK boards became predominantly non-exec - a later development than in the US - this could have been a factor in reducing that potential tension.

One thing that I shall certainly do if the NEDs in the public/third sector research gets off the ground is ask NEDs why they are doing the job and, if possible, investigate the appointment process.


Watching this

http://corpgov.proxyexchange.org/2012/01/video-friday-no-legal-duty-to-maximize-shareholder-value/

sent me to see what Lynn Stout has published recently and I found her 2010 book  "Cultivating Conscience: How Good Laws Make Good People", so I've ordered a second hand copy from Amazon (inter-library loan takes such a long time!)

I picked up the link from one of James McRitchie's useful tweets (@corpgovnet) and realised that as well as following up email and Google Reader alerts I spend quite a lot of time following up Twitter links from people like James. I've left the LinkedIn Boards and Advisors group: the traffic was very heavy and I found myself reading far too much anecdotal information posted by consultants, some with some tenuous academic connections, who have no time for rigorous academic analysis and really just want to sell their services.

But I haven't written anything other than emails today...