The Great Governance Debate

A publication from the IoD today: thanks to @dinamedland for the headsup. Nice word cloud on the front cover.

But why "great"? Is there a lesser governance debate? Is there a debate at all? And what is the purpose of debates? Motions carried or defeated? Is this a sensible metaphor for corporate governance? I think that good governance happens in all the small conversations between the people involved. The Cadbury Code was all about stimulating those conversations, providing a language and a framework in which they could take place. It certainly wasn't about measurement of any sort. (Henry Mintzberg recently offered some cogent words about this.)

I did get beyond the front cover. I got as far as page 8 and realised I could do with a cup of tea and a cuddle with my cats while pondering my own inadequacies with regard to statistics and wondering whether it would be worth trying to address these at this stage of my life. It didn't take long to conclude that I could manage without knowing what "support vector machine regression" means. It certainly implies academic rigour, as does the Cass imprimatur, so I parked my anxieties and turned to the conclusions.

Ok, these are interim conclusions, but really?

"Different questions give different answers"? Really?

"Companies with higher governance scores have reputational advantage." You don't say!

"High-profile companies have reputational disadvantage

 Companies with lower scores in the predictive model (lowest tier) suffer from an average reputational disadvantage of -42. High-street banks have some of the strongest reputational disadvantages, ranging from -47 to -124."

Now that's quite interesting and might be worth exploring.

"Range of scores is relatively narrow.

We also note that the range of scores produced in the predictive model is relatively narrow. It may be that lower-scoring companies are already moving to develop and improve governance to deliver the levels seen by the higher-scoring companies."

That would also be worth investigating over time.

" Governance is a complex system. [Well, there's a surprise!]

The range of results from the instrumental factors in Section 6 above shows us that no single factor can determine how well a company delivers corporate governance. Companies that wish to improve their governance should address a wide variety of factors. Governance should be seen as the responsibility of the whole organisation."

I would certainly take issue with that final sentence. I blogged about the problems of blurring of boundaries between governance and management last August and I'll have more to say on that in a future post.

This may not seem very positive: I should probably read the report in more detail, to be fair. But it's my contribution to the debate, for now. Is anyone listening?