One Minute Governance

243. What are we afraid of?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #41: What are we afraid of? I wonder if you’ve noticed something that I’ve started to notice lately. There’s a bit of a trend among people who think and speak and write about corporate governance where some of them seem to be trying to pathologize the way that people behave in boardrooms. For example, classifying boardrooms as places where people are scared to speak up and where systemic power structures make it impossible for directors to call out bad behaviour or question status quo. Now, that might all be true. I’m no expert on fear. But in my experience it seems much more likely that everyone in the room is just doing their best, but the problem is that they’re doing it only within the narrow scope of what counts as normal when it comes to boardroom processes and behaviours. And that, to me, is the fear: boards are often afraid to try new things. This, of course, gets reinforced by regulators and institutional investors who are often trying to impose more and more boxes for boards to tick. It’s all mostly fine, I guess. Except we have no real evidence to suggest that those boxes are any good, let alone “best”. Here’s what I’m getting at: what’s something your board would really like to change or try, but is afraid to give it a shot because it might not conform with “best” practice or the expectations of the regulators or institutions? What might it take for us to give it a shot anyway?

242. Is the way we do things likely to make the world a better place?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #40: Is the way we do things likely to make the world a better place? It’s a coincidence – an actual for real coincidence – that the chunk of my calendar that I had blocked off to write the last batch of scripts for this season of OMG landed on November 6^th, 2024. I’m a Canadian living in Canada, but the weight of last night’s US Presidential election is real and inescapable. And this episode is the first on my list of scripts to write today, which is coincidentally and deeply appropriate. There’s a weird – is it a paradox? – inherent in the job of a corporate director. In any kind of incorporated entity. That paradox is that you are required to bring to the table your own experiences, perspectives and opinions, but that you’re somehow required to do so dispassionately and independently. In fact, the very definition of your job is to serve others, although exactly which others depends in part on the jurisdiction where you serve. Here, in Canada, you’re required to take into consideration the interests of every group and individual that stands to be affected by the actions of the corporation. That, of course, is impossible in a literal sense, but it’s still a useful reminder to all directors in this country that it ain’t about you. If you want to be confident that the way your corporation does things will make the world a better place, you can’t rely on your gut, or on any other single set of opinions or perspectives or interests. Some of the stakeholders to whom you owe your duty will have values that clash directly with your own. To do your job well, you may be forced to confront truths that make you extremely uncomfortable. You will certainly need to admit it’s possible you’ve been wrong all along. But that’s the job. It’s not about you. It’s not even about the people who got you into this precious and high-status position. It’s about ALL of the people you serve.

241. How much should we obsess over our customers' needs and desires?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #39: How much should we obsess over our customers’ needs and desires? I’ve only relatively recently become familiar with the world of business design. Ya, given my positioning for more than 20 years inside an academic institution with a powerful business design pedigree, I should probably be a bit embarrassed. But my shamelessness is so profound that honestly, I’m totally fine. Anyway, one of the core elements of business design or design thinking is an obsession with the customer. You can imagine, for instance, a company having what seems like a super cool idea and investing squillions of dollars and hours into it until it finally hits the market…only to realize that nobody cares. But this kind of obsession has implications not just in product design but also in things as big as corporate purpose or as operational as hiring practices or advertising or office design or whatever. And it’s relatively common now for boards of directors to get training on design thinking, including being indoctrinated with the importance of obsessing over customers. I think this can be both a blessing and a curse. A blessing, for instance, when the board is engaged in dreaming about possible organizational futures. A curse, on the other hand, when we’re all the way in the weeds on some operational minutiae that are already foregone conclusions. But that’s why today’s question is more about where we should set the dial. Not forever. In fact, it might just be for the next few minutes. But let’s ask so that the topic is at least on the table and we don’t take it for granted.

240. How well do we really know and trust each other?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #38: How well do we really know and trust each other? You know what governance myth I find super nonsense? That it’s somehow bad for directors to know and like each other. I remember way back in my early days as a researcher on governance projects at the University of Toronto we used to scan through public filings in granular detail looking for the tiniest shred of evidence that directors might have connections to each other outside the boardroom. Like, if it turned out that two directors were members of the same country club or something we would kinda feel like we’d found some sinister smoking gun. There’s no *way* they could possibly demonstrate independent thought in the boardroom if they’ve both eaten the cobb salad at the same clubhouse or shot a 103 on the same golf course. And this type of cynicism still lingers everywhere in the governance narrative. You see elements of it baked into regulations and proxy advisor guidelines. You see it in the way that certain media frame their coverage of boards. You see it in the gripes of activist investors. But, like, let’s think about this for a second. Boards need to make huge decisions under intense time and information constraints. We want them to consider diverse perspectives as quickly and thoroughly as possible. There’s only one condition I know of that can cause a group of smart people to do that effectively: trust. It’s hard to trust people you don’t know. So, in my opinion, directors really *should* know each other and like each other and maybe even do stuff together. Yeah, maybe there are fine lines that we should be careful about, but I think the downside of boards NOT trusting each other is the greater risk.

239. What's one thing we do that's completely useless?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #37: What’s one thing we do that’s completely useless? This is probably the most self-evident question in the entire season. It’s true that baked into this question is an assumption that there’s at least one thing your board does that is, in fact, completely useless. As in, it adds no value to anyone in any way. Maybe it’s a routine agenda item that’s lost its purpose over time. Maybe it’s the way people put up their hands only to say “yes, I agree with what the last person said, and let me tell you why for the next five minutes.” Maybe it’s the way you use Robert’s Rules. Maybe it’s the fact that the board insists that management create reports or other information that we know nobody cares about or will read. Maybe it’s just your tendency to over-complicate or over-simplify things. Or to ask too many questions, or not enough questions. Or to be too quick to criticize management or too quick to let them off the hook. I don’t know. It could be anything, really. Whatever it is, I know there’s SOMETHING. And, sure, “useless” is probably subjective. Different board members might have different opinions and you may never completely align. I just sometimes like framing questions in extremes because it can be easier to come up with useful ideas. Like, this question would be harder to answer if it were “what’s something you might do that could kinda be a little bit less useful than maybe some people probably wish it were?” I mean, we can all come up with a million unhelpful answers to *that* question. Hey, and bonus points if you have the guts to invite your executives to participate in this conversation.

238. What are three things we wish management would explain to us in greater detail?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #36: What are three things we wish management would explain to us in greater detail? Without looking, what do you know about the appendix? As in, the little tube jutting out of most humans’ large intestines. I’m willing to bet that if I sampled 100 people listening to this episode, the only appendix-related knowledge that we all have in common is that sometimes something can go really wrong with a person’s appendix and it has to be urgently removed. I have a suspicion that for most boards of most corporations there are a few things about the business where the board’s knowledge is kinda equivalent to most people’s understanding of the appendix. Some of us might know a lot about it – maybe because we had acute appendicitis and learned it all the hard way. Like a director who may have gone through a crisis and was forced to learn all the nuts and bolts about some weird law or regulation. The rest of us might have *heard* of that law, and understand implicitly that breaking it is bad, but not have any idea if or how it might apply to THIS corporation. Same thing goes for companies with super complex operations. There are probably some things about the way your company works that you know are important, and that management refers to occasionally, but that nobody ever took a second to step back and say, “hey, I think I’d like to know more about that. It seems important!” I bet you can think of three things that fit that bill. Better to know now than after your appendix has burst.

237. What are three things we wish management would explain to us in simpler language?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #35: What are three things we wish management would explain to us in simpler language? Nothing could be more appropriate than the actual 100% true fact that I wrote the script for this episode while listening to a compilation of Curtis Mayfield’s greatest hits. The greatest hits aren’t as satisfying as, say, just listening through the album Curtis top to bottom, but still. As for the relevance to this episode, if you know you know. On a similar note, episode 129 of OMG was called “Is Thing Explainer the best management book?” In other words, everywhere you look there are great examples in the world of people communicating complex information and ideas in simple and impactful ways. You won’t find many of those examples in materials prepared for boards of directors. Which is fair, I guess. We’re conditioned to believe that if we leave out the jargon and exhaustive details then we’re probably failing to comply with some arcane rule somewhere. And in some cases that might be true. That said, just receiving all the jargon and exhaustive detail doesn’t guarantee that the board will, y’know, get it. I am confident that if your board explores today’s question together you will come up with some really useful answers, and everyone will be grateful. For the executives listening, feel free to use Thing Explainer and Curtis Mayfield as inspiration once the board shares their answers.

236. Are we sure we use our experts well?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #34: Are we sure we use our experts well? It goes without saying that you can’t just stick a bunch of smart people in a room together and expect them to get along, let alone to make patient and well-informed decisions together. Things get even worse when those people aren’t just smart, but also have serious depth of expertise in areas that are directly related to the decisions that they need to make. Add to that the time scarcity and information asymmetry that are unavoidable characteristics of the work of a board and, well, we basically have the perfect illustration of why I think good governance is intentionally cultivating effective conditions for making decisions. If we’re not intentional, then our experts will be set up…not to fail, exactly, but certainly not to be as awesome as they could and should be. Just turning to an expert and saying “hey, you’re a pro at this, what do you think we should do?” is opening the door for the overconfidence effect that we talked about last week in episode 235. Just leaving things to chance and hoping everyone engages in the right way at the right time is, well, I suppose it’s the opposite of being intentional and also unlikely to succeed. It turns out that we need to understand not only the nature of each person’s expertise, but also a bit about their personality. We need to have a clear sense of what conversations we need to have (shout out episode 218). We need a sense of what insights management needs from the board. And once we know all that, we’re ready to flip today’s question a bit and ask: what do we need to do to make sure we use our experts well today?

235. What's at the top of our expertise wish list?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #33: What’s at the top of our expertise wish list? It’s been a couple of months since episode 207 where I urged you to consider what, specifically, makes a director great. I have asked *many* directors and executives that question and they have never, ever, answered by listing areas of expertise. And I think that makes sense, right? There’s no type or depth of expertise that, on its own, might make someone a great director. But that doesn’t mean we don’t need experts. In general, we’ve been conditioned to believe that the table stakes for boards include things like legal, audit, finance, strategy, executive experience, and so on. I could easily make a strong case for all of those. Without much more effort, I could make a case that they’re expendable. It’s also tempting to zoom in on emerging topics like AI or cybersecurity or DEI or modern slavery or whatever. Also all good options. And if we get an AI expert who’s also a great director who could possibly deny we’ve accomplished something important? But there are only so many seats at the table and we can’t tick every expertise box. And sometimes we might actually want TWO experts in the same area, right? So they can validate each other? I guess what I’m saying is that all expertise is optional, so if we’re resisting the urge to anchor to the status quo what would be at the top of our wish list? If we could add precisely one new area of expertise to our board, what would it be?

234. How might we empower our loudest directors to be better listeners?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #32: How might we empower the loudest directors to be better listeners? Having an ultra-confident expert on a board is a blessing and a curse. I suspect I don’t really have to explain what I mean – it’s pretty obvious. I mean, confident expertise, when the expertise is relevant to the work of the board, is a shortcut to managing information asymmetry and ensuring the board is able to be, y’know, useful. But there’s a very fine line between high confidence and OVERconfidence. Overconfidence is dangerous. I talked about this back in episode 119, and there’s tonnes of cool stuff you can read about the perverse relationship between expertise and confidence by Googling “overconfidence effect”. The other issue with confidence is that the most confident people on boards are the ones who will most readily participate, and will feel most uncomfortable with even the briefest breaks in action. But think about those of us in the room who have less expertise, but whose perspectives might still be critical to making sure we consider our decisions most thoughtfully. We might need a few more seconds or minutes to think. We might need a bit more information. We might not have the confidence or footing to challenge the experts in the room. The moment those experts start getting expert-y, the quieter among us will be more likely to just defer. And that’s a missed opportunity for everyone. Even our experts would be better off having more perspectives to consider. So, what approaches might you try to empower your experts to be listeners first?

233. How might we empower our quietest directors to make an impact?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #31: how might we empower our quietest directors to make an impact? There’s a surprisingly common and patently absurd notion in the world of boards and corporate governance. It goes something like this: when we recruit a new director, we don’t really expect them to contribute much in the first year – mostly we want them to listen and learn. Most of you OMG listeners will be familiar with this position, and already know that it’s kinda dumb. Because here’s the thing: board seats are scarce. Precious, even. Why the heck would you be OK with one of those seats being filled with someone who’s not empowered to engage, participate and contribute on equal footing with the rest of the board? A much less dumb approach to a new director would be to ask yourself, “what would it take for this new director to participate at 100% from day 1, and how are we going to do our best to make sure that it’ll happen?” Now think about the quietest director at the table, whether they’re new or not. Most of the boards I meet are sitting there wishing that director would say more and participate more willingly. Well, what would it take for that director to participate more, and how are you going to do your best to make it happen. Spoiler alert: just pointing your finger at them and asking them to participate isn’t going to get it done. Don’t be lazy. Do the work.

232. How many of us wish our work were more spontaneous?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #30: How many of us wish our work were more spontaneous? I admitted in the last episode – to nobody’s surprise, I imagine – that I generally prefer the unpredictable over the predictable. That doesn’t – and shouldn’t – mean that anyone else should feel the same way. But it does mean that in a generally super-structured environment like a board meeting, one of two things is happening. One, I am trying my best to be useful, but am never really able to give my best. Two, I am subtly or unsubtly pushing for cool stuff to happen, thereby annoying the structure-preferring people in the room. And they’re right to be annoyed! If the meeting were in a spontaneous and experimental mode, our positions would be reversed. They’d be less useful than they could be and probably subtly struggling to rein in the chaos. But this is actually a good explanation for why we generally struggle to get the best out of everyone at the same time. The fact is that no one approach or model will be well-suited to the wide range of personalities and preferences in the room. And for what it’s worth I can *guarantee* that there is a wide range of personalities and preferences among your board members and executives. Do I have a brilliant suggestion to address this challenge? No. But again, you can’t solve a problem that you can’t describe. So ask the question!

231. How many of us wish our work were more structured?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #29: how many of us wish our work were more structured? Ever notice how lots of people get uncomfortable the moment things get unpredictable? It’s both normal and understandable. And thankfully, most boards and executives approach their work together in a pretty structured and predictable way. But that can make it even more jarring when something unexpected happens, or when someone in the room starts suggesting (or insisting) that we try something new. Even though I personally feel more comfortable in situations that lean toward the unpredictable – at least most of the time – I think it’s obvious that there’s nothing right or wrong about preferring structure. And I bet you can picture how someone’s preference for structure and predictability might affect the way that they engage in discussions at a board meeting. As long as we’re sticking pretty close to the scheduled topics and not introducing any significant new information, they’re right at home. But instead of making an assumption that anyone – or everyone – is happy with the balance we have, why not ask? What if it turns out all of us would prefer to increase the predictability of our meetings? Wouldn’t that be an important bit of information?

230. How many of us would benefit from an occasional change in scenery?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #28: How many of us would benefit from an occasional change in scenery? In episodes 192 and 193 of OMG I talked about the importance of breaks and physical movement. These are not trivial nice to haves – they are critical to making sure that people are cognitively engaged and comfortable – both of which we can all agree are important to board effectiveness. Speaking of trivial, it’s maybe a bit too easy to trivialize breaks and think of them just in terms of gaps in our agendas for people to do with what they please. Mostly to grab a coffee and get caught up on email for 15 minutes. But we all know that that’s no break at all. It’s like if I giftwrapped your overflowing work phone and presented it to you like the greatest gift in the world. No, breaks are different from simple agenda items. If you could design the ideal break – one with no constraints, anything is on the table – what would it look like? We might all come up with something different, but I suspect almost everyone’s dream break would include a change in scenery. Maybe you’re out on a walk or sitting on the beach or up on a roof or on your bike or whatever. And the thing about a change in scenery is that you don’t even need a break to get it done. You could hold different parts of your board meeting in different rooms or have a quick walk and talk or even just play musical chairs. So, how many of us would benefit from an occasional change in scenery?

229. How many of us would like our board meetings to be more creative?

This season, every episode of OMG focuses on a question that directors really need to answer.

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #27: How many of us would like our board meetings to feel more “creative”? As any casual OMG listener will already know, I spend a lot of time encouraging corporate directors and senior executives to do things that are outside of the range of normal behaviours in boardrooms. First off, I’d like to argue that the range of normal behaviours in boardrooms is way too narrow and doesn’t work very well. But second, I am compelled to admit that it can be hard to find the confidence to try things that literally nobody else has ever tried, even when everything that everyone *has* tried doesn’t work. To that end, I often get challenged by my clients and students on that exact point, usually in the form of “that all sounds fine, Matt, but how do you expect me to go into my boardroom and actually do this stuff?” My initial response often involves the subject of today’s episode. I will look around the room and say, “OK, raise your hand if, in general, you would like your board meetings to feel more creative, whatever that means to you?” Every time I’ve asked this question, more than three quarters of the people in the room raise their hand. And what I’m try: first, that we are all open to trying new things and as a result you probably won’t face as much resistance as you think. Second, just asking a show of hands question requires basically no permission, gets you immediate and valuable information, and in itself injects a bit of active and creative engagement into the flow of a meeting. Creativity doesn’t have to be difficult or complicated or transformative. But it does have to push you outside the range of normal behaviour.