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Un exercice de remue-méninge pour repenser les règles de « bonne gouvernance »

24 décembre 2013

Aujourd’hui, veille de Noel, je vous présente les sommaires des Think-tank produit par Board Intelligence, une firme spécialisée dans les informations sur les conseils d’administration. Celle-ci a tenu une série de débats sur la réinvention des règles de gouvernance en demandant aux panels de se prononcer sur la question suivante :

If you could rip up the rule book, what would good governance look like ?

Voici les résumés des résultats les plus remarquables présentés dans FT.com. Bonne lecture et Joyeux Noel ! 

Think-tank searches for good governance

Stressing the importance of company boards can weaken the sense of accountability among management and staff, according to participants in a recent debate.

They agreed there is a strong case for saying an organisation lives or dies by the actions and inactions of its management team, rather than the board, and that employees were a better indicator of how a company is run than scrutiny of the board.

An alternative boardroom model was suggested, drawing on the way some executive committees operate, where the chief executive seeks consultation rather than consensus. Perhaps the chairman could have a similar function.

Chairmen of the Bored

Chairmen of the Bored (Photo credit: Wikipedia)

This might also reflect the reality of the near-impossible task faced by non-executive directors. One participant said: “A non-executive is on a hiding to nothing – and to do the job properly, they need smaller portfolios and better pay. When things go wrong, they can expect to be tried in the court of public opinion.”

It was argued that this is becoming such a trend that many talented candidates are no longer willing to take on the role. “I wouldn’t take a non-executive role in a big and complex global bank. The mismatch between what you are accountable for and your ability to affect it is enormous,” one commented.

“To do the job of the non-exec properly you have to get out of the boardroom and into the organisation. You have to experience the business for yourself and not just take management’s word for it.”

There were also complaints about the amount of time required to do the job of the non-executive: “It’s not 12 days a year at £1,500 per day – it’s at least 30 days. Given the opportunity cost of what an accomplished person could be doing with their time, and given the risk you carry as a non-executive, why do it?”

If we don’t go so far as to rip up the governance rule book, at least we should make it shorter, they agreed. Rules will always have unintended  consequences and breed perverse outcomes – and fear of falling foul of the rules  can
lead boards to document as little as possible to maintain “plausible  deniability”.

At a subsequent debate it was proposed there should be a register to name and shame – and praise – the performance of non-executives. At present, shareholders’ opinion of a non-executive and their decision on re-electing them is based on gut feeling. A public register would be helpful in forming a judgment, listing statistics about the number of boards the non-executive is on, the time they allocate to each and notable events that took place on their watch

There are chairmen with such large portfolios they could not possibly allocate sufficient time to each board, they argued. A public register would make this much more transparent.

Débats entre cinq présidents de conseils et un PCD

The five chairmen and chief executives attending a recent think-tank discussion accepted that even improved boards cannot prevent all corporate crises and expressed concern at this overly “defensive” role. They argued that “stopping bad things happening” must be tempered by helping “good things happen”.

The participants agreed that non-executives must have the confidence to challenge the chairman and chief executive. One said: “Having sat on the board of my employer as an executive, I have come to the conclusion that it is a hopeless role. When the chief executive is sitting opposite, it is fairly obvious how you’re supposed to respond to the question ‘what do you think?’

“Board meetings are not a good use of time. We don’t question why we’re doing what we’re doing.”

The group concluded that “small is beautiful: small boards, small briefing packs, small agenda, and small rule book”.

At a subsequent dinner, also attended by chairmen and chief executives, a call was made for boards to be more realistic about their limitations and to be more discerning about where they focus their efforts

For example, boards attempt to scrutinise specific investment decisions when the information they can absorb and the time available for discussion mean substantive challenge or insights are unlikely.

On the other hand, it was pointed out that boards are also held liable for the detail as well as the big picture. Even so, attempting to meet these conflicting responsibilities by “clogging up the board agenda with too many matters to explore properly” cannot be the answer, they agreed.

The participants argued that the governance rule book is ineffective and that boards should instead be subject to an annual review of their effectiveness.

A need for “better memories, rather than better rules or regulations”, was stressed and the recommendation that non-executives should stand down after nine years was criticised for institutionalising the short-term memory of the boardroom.

One said: “When our bank repeated its mistakes from the early 1990s, it wasn’t the bank that suffered from amnesia – it was just the board.”

The chairmen and chief executives concluded that UK business suffers from a short-term “sell-out” culture. It was argued that in the US, business leaders who are successful will strive to be yet more successful and in Germany, successful businesses are nurtured for the next generation. But in the UK, business people aspire to have just enough to “retire to the Old Rectory”. One said: “We lack the ambition – or greed – of the Americans and we don’t feel the duty of the Germans. We need to raise the level of ambition – and sense of duty.”

Débats entre présidents de conseils

Boards are failing at strategy and becoming increasingly focused on costs, according to a think-tank debate attended by chairmen. One said: “We need the conversation in the boardroom to be two levels ‘higher’. Many of our largest companies are sitting on cash and they need to get back to strategy and invest in the future – or there won’t be one.”

It was suggested that advisory boards, unfettered by concerns of liability  and governance, might be better at tackling strategy – and might attract  creative people who would otherwise be put off joining boards by the burden of  governance.

The chairmen also asked whether more of a board’s work could be handled by committees, as they can be more focused and effective.

They also questioned whether age and experience should continue to take precedence over training and education when appointing board members. One view was that boardroom skills are becoming more specialised and need to be learned.

Regulators came under fire from the chairmen. They were accused of not understanding the businesses they are regulating and of treating non-executives as executives.

The meeting also referred to the spread of regulation from the financial services sector. One said: “We have a two-tier corporate world: financial services and the rest. But what starts as regulation of financial services bleeds through to the rest.”

The participants warned that because boards are out of touch with society, there is a danger of a backlash and the emergence of an “anti-business” movement.

The relationship between society and business was also raised at a subsequent debate. One view was that the future of the corporation depends on it being redesigned and finance returned to its proper, subservient role of supporting the wider economy.

All businesses should demonstrate public benefit – just as charities have to show a public benefit in return for charitable status, businesses should do the same, perhaps in return for limited liability status.

Another view was that voluntary sector leaders should be encouraged to join corporate boards, because of their specific skills, including in reputation and risk management.

Participants went on to call for younger, more vibrant boards. “You should see the faces of the future – not just the past,” said one. The concern that  young executives are too busy to join boards was rejected and some chairmen were  blamed for claiming to support diversity of age but then not allowing their  executives to join someone else’s board.

It was also argued that businesses and boards need permission to fail. “What business or person can achieve great things without the possibility of failure?” one asked.

Vous pouvez lire les résultats des dix autres débats en vous référant à l’article en référence.

How to measure a post-2015 MDG on good governance (post2015.org)

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