Category Archives: Coaching

Corporate Governance – exercising a “duty of awareness” in the age of social media

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Do we need a new theory of Corporate Governance? Is it time to look at a new model that reflects the current environment in which businesses operate, an era characterised by:

  • social media,
  • corporate and social responsibility,
  • shareholder and consumer activism,
  • increased market connectivity, and
  • rapid generational change?

Has the law fallen behind in being able to regulate and oversee contemporary corporate behaviour – where compliance with and adherence to the letter of the law may no longer be enough to meet community standards or satisfy shareholder expectations?

The question arose during a roundtable discussion I attended recently, comprising non-executive directors, entrepreneurs, corporate advisers and governance experts. Some of the issues we kicked around included:

  • the efficacy of running more frequent board interaction via the use of technology (as opposed to the standard face-to-face monthly board meeting);
  • the ethics of minimising cross-border taxation by multinational companies (even though it may be legal under international tax law);
  • the imperative to develop more inclusive and diversified boards (including networking into broader stakeholder groups);
  • the perils of ill-considered public comments made by CEOs (and the resulting social media backlash); and
  • the risk of harking back to some “golden age” of corporate behaviour (assuming such an era actually existed)

Our current perspectives on Corporate Governance largely derive from the late 1980s and early 1990s when a series of authoritative studies and reports led to new Codes of Practice and updated corporations laws – I’m referring to the work done by and in the name of Tricker, Carver, Monks, Cadbury, Greenbury, Hilmer and Hempel. And while in recent years we have seen increased scrutiny on CSR, directors’ remuneration and financial oversight by boards (plus Sarbanes-Oxley, Dodd-Frank and IFRS), the reality is that most of the earlier Corporate Governance reforms were introduced just as the internet went public and just as financial markets were being deregulated. So it could be argued that the reforms were ill-equipped for, or could not have anticipated, the changes to come – witness for example, the SEC’s recent approval of social media as an appropriate platform for corporate disclosure.

In Australia, Corporate Governance is described simply as “good decisions being made by the right person”, and the obligations of company directors are summarised as follows:

  • your primary duty is to the shareholders;
  • you must act with appropriate due care and diligence;
  • you must not allow the company to trade while insolvent;
  • you must exercise your powers in good faith and in the best interests of the company;
  • you must not improperly use your position of (or information obtained as) a director to benefit yourself or another person, or to cause detriment to the company.

On one level, the test of whether an organization has exercised good judgement in making a decision is, “would you be embarrassed if this was reported on the front page of tomorrow’s newspaper?” At another, Corporate Governance is reduced to a compliance checklist of risk mitigation measures.

The Australian courts (in the OneTel and Centro cases) have expanded and reinforced the duty of care (particularly in relation to the business judgement rule) to place greater accountability on individual directors to consider what a reasonable person would do in exercising their duty of care and diligence:

  • To understand the fundamentals of the business
  • To keep themselves informed of the company’s activities
  • To monitor the company’s activities (e.g., through active questioning)

The question we should be addressing is: “Does imposing a broad duty of care and specific fiduciary obligations ensure an appropriate level of Corporate Governance?” I would argue that in light of a rapidly changing operating environment, we would be well-advised to exercise a “duty of awareness” in respect of our Corporate Governance standards. In my view, directors need to take a wider perspective in understanding and monitoring the business fundamentals and the company’s activities. Some may argue that this is not a new duty, it has simply been forgotten in recent times – and in the era of social media, when it is far easier to “get caught out”, it would be prudent to have more regard for the broader context.

A “duty of awareness” offers an appropriate counter-balance to the numerous areas of self-regulation by industry sectors and by individual companies. It provides an objective test for assessing “if not, why not” explanations required under both voluntary and mandatory Codes of Practice – i.e., did the respondent take into account all relevant factors, and did the respondent adopt a sufficient level of awareness in evaluating its options under a chosen course of action?

The “duty of awareness” means that at an individual level, directors would be obliged to reflect on their contribution to and participation in board decisions; boards would need to consider the likely impact of their decisions on the company’s performance and on wider stakeholders; and companies would be expected to have regard to their standing as a good corporate citizen, not merely a compliant one.

Acknowledgements: I am grateful to Andrew Donovan of Thoughtpost Governance and Dale Simpson of Bravo Consulting Group for their invaluable contributions to this article.

Portfolio, Portmanteau or Protean: what shape is your career?

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In a previous article, I commented on the non-linear nature of career development in the Information Age, in response to changes brought about by new technology, market dynamics and demographic trends.

Following recent research and policy proposals on workforce flexibility and workplace productivity by the Australian Workforce and Productivity Agency and the Australian Industry Group it is clear that more than ever, employees must take more responsibility for managing their own career, and be willing to embrace life-long learning and skills re-training to navigate non-traditional career paths.

Whether it is the need to address the current shortage of IT skills, or the need to prepare for the post-mining boom, employers will have to re-think traditional approaches to hiring, engaging and performance managing the workforce; and employees will be obliged to re-think the shape of a traditional career trajectory to take advantage of new opportunities, and to remain relevant in the modern workplace.

There are essentially three career models emerging: Portfolio, Portmanteau and Protean.

Portfolio Career: this model is probably quite familiar to more mature workers, who have embarked on a mix of different career activities, either as a planned transition to retirement or as a means to re-enter the workforce; or by default in response to external changes in employment circumstances.

In this scenario, someone might work part-time in a paid job or consulting role, volunteer part-time for a not-for-profit organisation and hold 1 or 2 non-executive board positions. In my own case, for example, I consult to a number of corporate clients on a regular basis, I am a member of an advisory board for a family owned business, I am working on start-up projects, and I have also been known to do some broadcasting on community radio. My significant other, meanwhile, balances a part-time job in accounting with her practice as an artist and art teacher.

This portfolio career model is no longer the exclusive domain of baby-boomers – witness a former and much younger colleague of mine who undertakes a series of HR contract roles, while helping to build a new IT business with her partner. The portfolio career typically appeals to people who enjoy a variety of different activities, have a broader mix of skills and experience, or who wish to create a personal work-life balance.

Portmanteau Career: this is a term I have coined myself, in an attempt to describe a career model that applies to either meaning of “portmanteau” – a) a travelling case, or b) a compound word.

In the former meaning, a portmanteau career is one where an employee’s skills are easily transferable to another role, a different organization, or even a new industry – the skills are literally portable, and can be carried from place to place. In my own case, I once transitioned from law publishing to financial information services, even though at the time I knew little about the latter – it was the core skills around content development, product management and commercial publishing models that were applicable and relevant.

In the latter meaning, a portmanteau career can be a product of new and emerging technologies or sectors. For example, digital media and social networks (in themselves, “portmanteau” industries) are attracting people with a mix of IT and marketing skills, a combination that would have been highly unlikely 10-15 years ago.

Protean Career: the protean career model is not a new concept but has been brought into the spotlight by the current economic environment, a supply/demand mismatch in skills, and the challenge of employees taking responsibility for their own careers. This challenge especially applies to employees coming into the workplace for the first time – even recent graduates who have gravitated towards a specific career path or vocation based on their choice of courses and qualifications  must be cognizant of the fact that they need to maintain and update their skills and knowledge once they enter the workforce.

In my own case, after graduating in law, and following a career as a paralegal, I decided I wanted to make a move into publishing. I retrained as an editor, and then looked for roles where I could combine my academic qualification with my personal interest – resulting in a successful career in law publishing.

I would summarise the protean career model as one where the individual defines, manages and determines his or her own destiny, rather than letting a career “happen” to them. It requires a pro-active approach to career management, combined with continuous skills improvement, supported by formal and informal learning, a willingness to embrace flexibility, an appetite for taking informed risks – and all underpinned by heightened self-awareness gained through experience and enhanced personal development.

The person who understands and pursues a protean career will likely be creating their own work, managing their own work preferences, and making easier and happier work choices.

In each of these career models, employers must also be willing to embrace flexibility, to adopt creative solutions for hiring and engaging their workforce, and to resist traditional “square pegs for square holes” resourcing models. As the productivity and flexibility debate continues to gain traction, the opportunity to re-think traditional approaches to career development and career management should not be lost in the noise.

Would you take career advice from a sushi chef?

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The cohorts of Baby Boomers who entered the workforce during the latter stages of the Industrial Age represent the last generation who contemplated lifelong employment in the same career, if not in the same organization or even in the same job. Here in the Information Age, with increasing numbers of employees engaged in knowledge work, the notion of a single career for life, let alone a single job for life, is pure fantasy.

In the Information Age, our willingness to embrace career change is as important as our ability to develop and maintain our core technical skills. For example, while we may think it is necessary to become experts in the latest technology, it’s equally important to understand how and why that technology is being deployed in particular situations – this is where the real learning occurs, as both the content and the context for that technical application will inevitably change.

The Agrarian Age helped define the concept of life-long occupations – in agriculture, the military, government service, science and medicine, the trades and professions, and even among unskilled labourers.  Think of the workers who toiled their whole lives on building the great mediaeval cathedrals, never to see the final results of their labour as those major construction projects took several generations to complete.

The Industrial Age ushered in occupations that relied on workers acquiring and applying technical, practical and manual skills that in essence changed very little during their lifetime, particularly on manufacturing production lines. This era also saw the development of the formal workplace and business establishments, in contrast to the largely home-based work patterns of before.

The Information Age continues to see rapid changes in workplace structures, employment patterns and career development. This change demands that knowledge workers constantly improve their skills – keeping up to date with new technology, engaging in the latest management theory, embracing new business models. This continuous learning process is not best served by staying in the same role, the same environment or the same mindset for lengthy periods. Personal change is a surer way of keeping in touch with universal changes.

So for latter-day job seekers who are looking for insights into their own career choices and options, why would they take career advice from someone who has been doing the exact same thing for 50 years or more?  I was reminded of this when a recent edition of my high school alumni newsletter reported that a long-serving member of staff had retired after more than 40 years in the job. During my own time at the school, this particular teacher was also the careers adviser, and without meaning to disrespect his teaching abilities, why would anyone take careers advice from someone who had stayed in the same job his whole career?

And yet, who could fail to appreciate the explicit career advice in the critically acclaimed documentary, “Jiro Dreams of Sushi” (made by David Gelb in 2011)?

Jiro Ono has been making sushi for over 70 years, but continues to hone his skills as a sushi shokunin, always seeking perfection, constantly finding new and better ways to create his dishes. As a master sushi chef, Jiro makes sure he knows his suppliers and is familiar with their produce. As a leader he is quick to acknowledge that the food he serves to his customers is the result of much hard work and detailed preparation by his team of chefs. As a teacher, his Michelin 3-Star restaurant also offers lengthy (and highly valued) apprenticeships to aspiring itamae who are willing to dedicate themselves to pursuing their craft.

Even though the daily process of producing the highest quality sushi seems repetitive and even tedious, it is the willingness to face each day as both a new challenge and a fresh opportunity to improve one’s skills that gives Jiro his core purpose and sense of career satisfaction.

From personal experience, my own career development continues to be about defining my core values and improving my skills, understanding how to apply them in new situations, and how to enhance them by learning from colleagues, mentors, clients, suppliers and competitors, or from on-the-job and formal training.  Like Jiro the sushi shinkonin, I try and make this a daily process, by reflecting on how something can be done better or by understanding how new information can be incorporated into existing solutions.

Many of us working in the Information Age will recognize that we don’t pursue a single, linear career path, but engage in a series of both distinct and overlapping career sequences, connected by a common thread of transferable skills and inter-disciplinary learning applied to new roles, new projects or to new client engagements. Our challenge is to ensure we maintain purpose, relevance and a sense of direction as we navigate our “transactional” careers.

Footnote: The soundtrack for “Jiro Dreams of Sushi” features several compositions by Philip Glass, which seems totally appropriate, on several levels:  Glass, like fellow minimalist John Cage, is attracted to various aspects of Japanese culture; and as a minimalist, Glass’s music is often criticised for being repetitive, even boring – but attentive listening reveals that the repetitions subtly shift, revealing minuscule changes in pattern, rhythm and texture – much like every piece of sushi tastes subtly different.

Edifice and Artifice – Urban Planning and Verisimilitude

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Art can provide a compelling antidote to all the moral, philosophical, economic, scientific, religious and political hyperbole that bombards and confronts us every day. By referencing the technical processes of artistic practice, the study of art history and the language of critical art theory, we can learn to interpret and navigate these conflicting forces, and even challenge them. In our increasing over-reliance on all things digital, we need an artistic sensibility to help us re-connect with tangible reality. There are also some suggestions that enlightened companies have started hiring art graduates to bring an alternative perspective to their organizations – to tap into hitherto under-utilised skills and to employ this external expertise for internal problem solving, decision-making and strategic analysis.

Two recent cultural experiences have provided me an opportunity to reflect on how more than ever we need art to help make sense of the world, especially when interpreting data and making strategic planning decisions based on informed assumptions, market research and business analysis – because the standardized digital representation of everything means we often fail to venture beyond the surface of things.

The first event was a screening of “Urbanized”, an intriguing documentary by Gary Hustwit, showing at the Australian Centre for the Moving Image. The film is the final part of Hustwit’s design trilogy (following “Helvetica” and “Objectified”) and looks at several examples of good (and bad) urban planning around the world.  It provides cause for both optimism and pessimism on the future of the city – but it is mostly a positive survey.

One critical section of the documentary is an exploration of Brasilia, a flawed example of a “planned” city, with marvellous civic edifices and expansive freeways – except that for the people who live there, especially poorer and car-less citizens, it just doesn’t work as a built environment where they are supposed to live, work and play. Scratch beneath the surface, and we see a dysfunctional city. The moral of this particular story is that planners need to engage with the community, and work from the perspective of the end user, not simply from a visionary blueprint. Meanwhile, Stuttgart provides a salutary lesson in how poor public communication around policy, decision-making and execution can lead to a government being voted out of office, yet the majority of voters remain in favour of the politicians’ original planning decision.

There are so many things to like about this simple but effective film: the absence of a voice-over, allowing the stories to largely speak for themselves (within the usual confines of editorial decisions); the choice selection of urban locations and planning case studies; a range of informed and mostly objective participants and commentators; plus simple cinematography and a great soundtrack. Now I want my own city to adopt the public bus system from Bogota and the bike lanes from Copenhagen (and maybe the High-Line Park from New York).

The second cultural event comprised two solo (but related) exhibitions at the National Gallery of Victoria, featuring the photography of Thomas Demand and Jeff Wall respectively. Both artists produce large scale works, both employ sculptured components (light boxes used as fames, images printed on Perspex to imply depth) and both of them use constructed or staged settings to create their images.

Thomas Demand’s work looks deceptively simple and straightforward – mostly large still-life pictures of urban, industrial and technology-based interiors. However, if we dig below the surface verisimilitude, we can see that the images are really photographs of models made from paper and cardboard – sculptures that meticulously and painstakingly recreate these scenes rather like stage-sets, which simultaneously seem totally familiar yet frankly disturbing. This latter response can be explained by the absence of people and an eerie lack of any human presence in the images, plus the knowledge that all this visual data is merely a form of hyper-reality; but at the same time it is actually false, or at best an impression or recreated memory.

In comparison to his counterpart, Jeff Wall’s photography has the appearance of being more naturalistic (especially as most of Wall’s images feature people in everyday settings), even though in some cases it is just as surreal and hyper-real. The latter is achieved by the use of scale and backlighting, while the former is implied by the contradiction and juxtaposition between subject (content), and setting (context). This body of work also incorporates more narrative elements, and manages to make external references to literature, film and art history.

Both artists are quietly academic in their practice, and to some viewers this might present a barrier to understanding if they are not familiar with the accompanying art theory or critical analysis. But this need not be an obstacle to our engagement with the work, allowing us to appreciate it for what it is, and to reach our personal interpretations and conclusions.

Art enables us to relate individual stories and collective experiences, and recognizes that there are many truths, not just a single truth. Without art, we would lose a vital tool to interpret and narrate much of the world around us that cannot be explained by other media. And in the digital age of “virtual” and “hyper” realities, increasingly art is the only tangible means we have to give context and substance to our imagination without it being compressed and dis-intermediated by reductionist and homogenised technologies.

Finally, art in the 21st century is probably the only continuous link we have to our past – because as language and technology have evolved over time, art remains a constant aesthetic touchstone.

http://www.acmi.net.au/lp_urbanized.aspx

http://www.ngv.vic.gov.au/whats-on/exhibitions/exhibitions/jeff-wall-photographs

http://www.ngv.vic.gov.au/whats-on/exhibitions/exhibitions/thomas-demand