I'm following tweets from the IIA conference: they have had some very interesting speakers and I'm sorry to have missed it all but @Truenfair is doing a brilliant job of tweeting the essence of what's being said.
There seems to be a common theme around the need for senior management to be challenged and thus for IA to pick up this role. This resonates with the long-promoted idea that NEDs should offer constructive challenge. All well and good but before the notions of groupthink and the Abilene paradox were so widely promoted we all seemed to believe that consensus was a pretty good thing and worth striving for. I'm starting to feel a bit sorry for all the executives suffering this bombardment of constructive challenge.
Those of us who are natural challengers (yes, that's me) are not always sufficiently skilled in the practice of challenge to use this predisposition in a way that benefits our employers and organisations. It is all too easy to cross the line between constructive opposition and destructive mischief-making. If, after regular challenge, you are marked down as the stroppy one, people will begin to assume that you challenge everything without good reason and your potentially valuable contributions may be ignored. Shaking off the label is very difficult: I learned to change my behaviour in meetings and, possibly more importantly, to pay attention to my facial expressions and body language.
What I most wanted throughout my career was to be properly managed. (The word management is greatly scorned in higher education, unless of course you work in a business school where it is taught, often by people who have never done it.) Over the years I worked for two deans who did manage me and I will always be grateful for the way that they helped me to progress but I've worked for many other people who just found me a great nuisance. I needed a manager who would see how useful my critical approach could be and would help me choose the topics and the arenas in which they could be most helpful. I gradually developed sufficient understanding of the political environment of the university to be able to do this for myself but by then I think it was a lost cause as many people thought they could guess what I was going to say before I even spoke. Frustration with this led to the increasing temptation to be difficult just for the sake of it - a good signal that I was ready to retire.
I have sat on many interview panels. Sometimes I have seen good candidates rejected because they did not fully meet the criteria for appointment but where the hidden agenda was the sense that they would be difficult to manage, posing a risk to the group. But surely managing those people to bring out the best in them, for the organisation and for their own personal development, is just what management is about? (Managing the challenger: suddenly I see a consultancy opportunity opening up.. Or maybe an airport book..)
There are some points in organisational progress where challenge is really important - and where this disruptive innovation I keep hearing about can be really valuable. There are other points where people just need some calm space, possibly to reflect and regroup, and where challenge, however constructive, may not be positive. If challengers - NEDs, IAs, any sort - are constantly on the case and see this as their main role they may engender a standard response which negates the value of the challenge at the time when it is most needed.
Wednesday 9 July 2014
Monday 7 July 2014
Company secretaries deserve better
I have long been interested in the role of the company secretary. When I first started teaching at Oxford Polytechnic we offered courses leading to ICSA examinations and I taught the accounting course for several years. At that time, the accounting paper was very challenging: the questions were often more difficult than those of the accounting bodies' examinations. Our students had a good success rate and were clearly committed to pursuing the qualification and developing their company secretary role. I often wondered how they fared but had no opportunity to follow them up.
My interest was rekindled in my early research on audit committees, from a corporate governance compliance perspective. It became clear to me that the company secretary had an important procedural role but in those days it was not unusual to find that the finance director was also the company secretary, which gave him (or her: I did meet one woman holding the role, who told me that she had experienced more prejudice from being a member of CIMA rather than an FCA than she did on a gender basis) considerable power. My first encounter with the term "general counsel" also intrigued me as it appeared to subsume the company secretary role.
A position seen as combinable with other senior roles suggested that the company secretary community could be struggling to define itself professionally and this idea resonated with my subsequent study of internal auditors, another group viewed as chiefly responsible for compliance issues but in reality with a very much broader role (you can read more about this here ). So I chatted up some company secretaries and started attending ICSA conferences to find out more, in the hope of developing a future research project looking at how the role is interpreted in organisational settings and by company secretaries themselves, with broader potential insights into how corporate governance is enacted by practitioners and the way in which professional bodies and qualifications develop over time.
I'm still hoping to pursue this. There is very little academic research in this specific area so I am always keen to read anything that might be relevant. So I was eager to read the report commissioned by ICSA from Professor Andrew Kakabadse (see here: free but you need to supply some details before you can download it).
As a review of how company secretaries perceive themselves, which may have been the intention of the commission, it's a nice story and I can imagine that many ICSA members will be nodding away as they read it. Anecdotes are always good to read, especially if they confirm your own experience. But from a team of academics, this is disappointing stuff. The method used to conduct the study is briefly mentioned but no detail about data collection or analysis is provided that might give the interested reader a sense of the authority of the study.
I don't think anyone would argue with any of the 12 key findings: intuitively one would sense that most of them capture what is already known about the role. The first finding is interesting:
"The role of the company secretary is much more than just administrative. At its best, it delivers strategic leadership, acting as a vital bridge between the executive management and the board and facilitating the delivery of organisational objectives."
This to me reads like the manifesto of a group seeking to capture board influence. In my presentation at last year's Management Accounting Research Group conference at LSE I talked about the blurred boundary between governance and management and noted that the development of smaller, independent boards had led to two issues of potential concern.
Firstly, operational areas were using the word governance inappropriately (sales governance, IT governance, supply chain governance, marketing governance etc) possibly in an attempt to re-establish influence in the corporate governance area now that they were relegated to executive board status: hence the blurring of boundaries.
Secondly, the CEO was now effectively the link between the board and the executives: given that the entire panoply of corporate governance regulation was devised to curb the power of the CEO, doesn't this position seem paradoxical?
If company secretaries are now claiming to be that bridge, this could potentially be an important defence against such a charge, but it is difficult to see how this plays out in practice. A properly structured qualitative research study could provide the insights needed. But this report seems to be little more than a collection of quotes from a loose group of interested parties. Company secretaries deserve better.
My interest was rekindled in my early research on audit committees, from a corporate governance compliance perspective. It became clear to me that the company secretary had an important procedural role but in those days it was not unusual to find that the finance director was also the company secretary, which gave him (or her: I did meet one woman holding the role, who told me that she had experienced more prejudice from being a member of CIMA rather than an FCA than she did on a gender basis) considerable power. My first encounter with the term "general counsel" also intrigued me as it appeared to subsume the company secretary role.
A position seen as combinable with other senior roles suggested that the company secretary community could be struggling to define itself professionally and this idea resonated with my subsequent study of internal auditors, another group viewed as chiefly responsible for compliance issues but in reality with a very much broader role (you can read more about this here ). So I chatted up some company secretaries and started attending ICSA conferences to find out more, in the hope of developing a future research project looking at how the role is interpreted in organisational settings and by company secretaries themselves, with broader potential insights into how corporate governance is enacted by practitioners and the way in which professional bodies and qualifications develop over time.
I'm still hoping to pursue this. There is very little academic research in this specific area so I am always keen to read anything that might be relevant. So I was eager to read the report commissioned by ICSA from Professor Andrew Kakabadse (see here: free but you need to supply some details before you can download it).
As a review of how company secretaries perceive themselves, which may have been the intention of the commission, it's a nice story and I can imagine that many ICSA members will be nodding away as they read it. Anecdotes are always good to read, especially if they confirm your own experience. But from a team of academics, this is disappointing stuff. The method used to conduct the study is briefly mentioned but no detail about data collection or analysis is provided that might give the interested reader a sense of the authority of the study.
I don't think anyone would argue with any of the 12 key findings: intuitively one would sense that most of them capture what is already known about the role. The first finding is interesting:
"The role of the company secretary is much more than just administrative. At its best, it delivers strategic leadership, acting as a vital bridge between the executive management and the board and facilitating the delivery of organisational objectives."
This to me reads like the manifesto of a group seeking to capture board influence. In my presentation at last year's Management Accounting Research Group conference at LSE I talked about the blurred boundary between governance and management and noted that the development of smaller, independent boards had led to two issues of potential concern.
Firstly, operational areas were using the word governance inappropriately (sales governance, IT governance, supply chain governance, marketing governance etc) possibly in an attempt to re-establish influence in the corporate governance area now that they were relegated to executive board status: hence the blurring of boundaries.
Secondly, the CEO was now effectively the link between the board and the executives: given that the entire panoply of corporate governance regulation was devised to curb the power of the CEO, doesn't this position seem paradoxical?
If company secretaries are now claiming to be that bridge, this could potentially be an important defence against such a charge, but it is difficult to see how this plays out in practice. A properly structured qualitative research study could provide the insights needed. But this report seems to be little more than a collection of quotes from a loose group of interested parties. Company secretaries deserve better.
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