The Post: Why your board should watch it, altogether

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At the end of your next board meeting I recommend that you and your fellow board members should all go out to the cinema, watch The Post, and then have dinner together to discuss it.
I feel certain that when your CFO reads my justification for such wild extravagance they will be convinced of the ROI.
First, The Post contains all they need to know about sexism in the boardroom and what they can do to fix it.
Some people will wince when they watch this film. At one board meeting all the men talk over the woman who owns the business, The Washington Post.
At the climax of the film, Speilberg manages to convey sexism at its most bullying by arranging all the men around Meryl Streep’s character who is seated, with them hulking close and over her as she is trying to make a crucial business decision.
He then has a wide shot of her breaking free, physically, of her so called board “colleagues” and then she takes her decision, with great courage.
Second, for the price of a few cinema tickets, some popcorn and a Nando’s your board could learn the importance of having a shared purpose and how that is probably the best hedge against business, legal and reputation risk that money can buy.
The film appears to be about The First Amendment, but it’s deeper message is about wholesome shared objectives. If the word wholesome makes you feel queasy, then get used to it. Because wholesome is back in fashion, big time. Just clock the reaction to The
President’s Club shenanigans last week.
By wholesome I mean: an ethical focus, which goes beyond the bottom line, to address society as a whole.
By shared I mean just that: everyone around the board room table goes through the pain of figuring out what sentence they are all willing to sign up to that makes their endeavour worthwhile.
And there are no marks for saying it’s about making money. Making money in business goes without saying. It’s like saying people must breath. And any idiot can make loads of money if you screw enough people. T’was ever thus.
That’s why the kid running a protection racket in the playground was rich. But was he clever? No, just a little thug.
And there are lots of thugs in business. Are you one of them? If not, are there thugs on your board? If so get them off. And this film might help.
Because there’s one thing a thug can’t stand and that’s consensus on a matter of principle.
Their narcissism and cowardice are wholly exposed when faced with the light of a shared objective, which stacks.
Does your board have a shared objective beyond making money which stacks? If not you should put that fact at the top of your Risk Register.
Some say Carillion went under, not because it ran out of cash, but because it lost its sense of shared purpose which led to it running out of cash.
Finally, the film is a textbook study on how organisations should work with their in-house counsel: the latter should be fiercely independent and the former required to justify constantly their actions to the in-house counsel.
These reasons aside, your CFO should approve the jolly if only because this writer loves Streep. She can do no wrong. And if she’s in a film it must, by definition, be worth seeing.
Tom Hanks isn’t bad either. And Spielberg knows a thing or two about pointing a camera.
What’s not to like?

Progressive boards: why not use the Jacinda Arden story to revolutionise “mat leave” in your business?

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“Woman at work with a baby” should not be headline news. Work in the 21st Century must be about integrating home and work life in a manner that does not put work higher than the society it serves. The issue is: how will her employers best support her and her family because they should and not how Prime Minister Arden will cope being prime minister, as if having a baby is somehow an inconvenience.

I posted the paragraph above on LinkedIn last week along with a link to the news story and one person commented as follows: “Work does not ‘serve society’ other than (perhaps) under communism.”

That wasn’t the general view as many people “liked” the post, but I suspect that any talk of work serving society will elicit the communism/socialism challenge from some.

However, these challengers will become increasingly marginalised as the number of high profile “capitalists” write openly about the needs of society. Larry Fink, CEO of BlackRock, for example, has recently said that “society is demanding that companies, both public and private, serve a social purpose” (The Daily Telegraph, 17th Jan 2017). He is one of many.

It’s now possible to talk about society and business in the same sentence without being branded “a red under the bed”. However, all of this talk will remain just that – talk – until we address the tricky issue that in the current system capital takes priority over all other needs. There must be a mid-point between winner takes all capitalism and the perils of the proven disasters in far left models.

Now the Jacinda Ardern story may give progressive boards the excuse to confront this conundrum head-on. Why not abandon the concept of “leave” altogether? By that I mean, all leave: holiday, compassionate, sick, and that most horrible of all abbreviations “mat (and pat) leave”. The whole concept of being at work versus not at work, which is nonsense. People are people, whether at home or at work.

Why not give everyone a fixed price contract with a job specification that focuses on adding as much value as possible to the organisation? Why not make every effort to create an environment that maximises their chances of doing that? What better way to do that than to understand the personal issues of each employee and to do everything possible to make their lives fulfilling?

What better place to start than to abandon the “working day” to allow people to work with unlimited flexibility depending on their circumstances? Home life would not be a drag on work life – it would come first, with the blessing of the business. Does this sound utterly fanciful to you?

If it does, is that because a) you would like it to be, but believe it can’t be because no one would allow it or b) you believe it can’t be because capital is king and it would all cost too much or c) you believe that work and non-work should be completely separate?

If your board is progressive and wants to experiment with new ways of working because the old ways are no longer fit for purpose I would encourage you, as others have done successfully, to try out new models.

If you and your board feel that capital is king and profit will always trump society’s needs, I understand your view but your board should, if only for risk management reasons, reflect on why the likes of Larry Fink and others are using the “s word”? Do they see something on the horizon that you don’t?

If you and your board feel that the boundaries between work and home life should not be porous, then you must accept that you can’t have it both ways. If you want people to bring their “whole personalities” to work, then you must take their whole lives into account.

If you don’t, they will leave a large percentage of their value “at Reception”, and you will be losing out even before they start working for you. How can you justify that to your board?

Could a Devil’s Advocate process prevent a Carillion situation in your business?

Business cartoon showing people in a meeting, including the devil, and a new idea on the chart.  Devil says, 'I would like to play devil's advocate on this idea also'.It’s easy to throw rocks at Carillion. As some of the reasons for its collapse are emerging, so are the grim implications for those immediately affected. These problems will have been complex and only those involved know the truth.

But all of us, in business, are affected and implicated, are we not? Do we all not stand in the same corporate governance glasshouse that we have jointly constructed, rocks at the ready? Could this, or a similar catastrophe, not easily happen in your business, your department, or to your board? None of us should feel entitled to schadenfreude.

The situation reminds me of the film Sliding Doors, in which we are presented with two alternative outcomes: one in which the main character just makes it through the closing doors of a train and the other, they don’t. The movie proceeds to document the implications of these two alternate realities, popularising the expression: ‘a sliding doors moment’. It’s a powerful image.

I wonder how many sliding door moments occurred at the main and operating boards at Carillion and in the meeting rooms of the contracting government departments? What decisions were taken when and by whom? Decisions that, in aggregate, led to this nightmare.

Or, what decisions were not taken, or conversations not had, or horizons not scanned and by whom? But crucially, was it safe to speak up?

Many will say that’s the role of the non-executive directors: to ask the hard questions. But the power of NXDs is limited by the culture of the board, how much they’re told and their own courage.

Or you might say that this is market forces properly, if brutally, at work. Cash is king. You can lose money forever but run out of cash only once. And, dress it up any way you like, Carillion ran out of cash. This is capitalism working. The strong survive. The weak go to the wall. Another gladiator bites the dust in the coliseum that is the City of London.

And technically you would be right, except that this analysis ignores one factor: society gave Carillion a mandate to trade and without that mandate, it could not have traded, or run out of cash.

So I say again: are we all not responsible for this? For the creditors, who will be lucky if they get a penny in the pound? For the families whose lives will be wrecked? For the further erosion of trust in business?

So what to do? Well, you can do nothing and nothing will change; or you can decide at your next board meeting that you want to put in place processes that would reduce these risks for your business.

Is your reaction that it can’t happen to your business? That yours is too risk averse? That your corporate governance is perfect?

If that’s what you think, stop reading this now, although you might benefit from reading How The Mighty Fail by Jim Collins. Hubris is reason number one.

But if you choose to take a courageous step and suggest change then you will be forced to confront the reason why all businesses go bust or experience, as the lawyers euphemistically like to call it, ‘a major risk event’.

Businesses run out of cash because of the decisions taken that result in the owners of cash pulling the plug.

There is no mystery here. The cause of failure will be in the decision- making processes unless it’s a force majeure event. And even then, shouldn’t force majeure be on your risk register?

So how can you ‘de-risk’ the decision-making processes in your boardroom, particularly on your operating board or ExCo where you have access to more information and real decisions are made?

What if at every main and operating board meeting in your business one member, by rotation, were appointed as the Devil’s Advocate for that meeting with permission, nay the expectation, that they can say the unsayable, speak truth to power and challenge, for the sake of it, every key decision?

I suspect, if done properly, many key decisions would be either reversed or amended. But more importantly, many important matters – especially risky conduct, which is risky behaviour over time – would be called out.

But your Devil’s Advocate would require a mandate to represent all stakeholders – not just shareholders and the banks, but creditors, large and small, employees, their families and the environment.

No chance you may say.

It matters. Why is Larry Fink, CEO of BlackRock, of all people, saying that “society is demanding that companies, both public and private, serve a social purpose”? (The Daily Telegraph, 17th Jan 2017).

Why did Philip Augar write, regarding the governance at one FTSE company that’s in trouble, that “none of the right questions had been asked”, and that “The alternative, carrying on as before, has already led to a fractured society…”? (FT, January 4th, 2017).

Why did Merryn Somerset Webb, the editor in chief of Money Week, write only last month (also in the FT) that since “most adults in the UK have a stake in the listed UK sector, they should know that – be able to act upon it”?

The reason these three are saying what would be unsayable ten years ago is because the zeitgeist is changing. Women are standing up to predatory men at work. Electorates are defying age-old voting patterns. And investors are seeing the writing on the wall for old processes.

They see that the current model isn’t working. They also see that it’s not a binary solution – capitalism versus socialism, but a midpoint which gives all stakeholders a say in matters which affect them.

Perhaps the term should be Stakeholder Advocate and not Devil’s Advocate.

But if these arguments do not persuade you to implement a devil’s advocacy process at your board meetings you might ask yourself why?

Is it because you’re afraid? If you are, then the seeds of self-destruction are already sown in your organisation.

It’s only a matter of time.