One Minute Governance

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 #43: Is the way we do things working for me? I’ve said before on OMG and elsewhere that your work as a director isn’t about you. You’re serving others. Nonetheless, you’re still a human being with your own preferences, moods, skills, experience and needs. Sometimes mundane things will dramatically affect the way you show up for something – even if it’s something super important like your board work. Ever hear about that research that showed how judges assign different sentences to criminals before lunch than they do after lunch – even if they committed the exact same crime? Lunch matters. It’s a fact. But other less mundane things also matter, like disability or illness or big life events or neurodivergence and so on. There’s no such thing as a group of people who will all thrive under the exact same conditions. And there’s no such thing as an individual person whose needs and preferences will be the same from year to year, or moment to moment. So, does the way your board does things work for you? What could be better? Listen back to OMG season 4 for a bunch of conditions that you might consider. Is the room too cold? Is the information too complex or not complex enough? Do you need lunch? It all matters because it affects the way you engage in the work of making decisions.

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 #42: What are we excited about? I know that boardrooms aren’t typically environments that provoke much excitement. And I’m not trying to pretend that getting excited is really the point of a board’s work. But just because it’s not the point doesn’t mean that it’s not worth aiming for. Yes, it’s true that the emotions we feel when we’re in an exciting moment can make it hard to approach decision-making rationally. In fact, there’s cool science that shows excitement and fear, when mushed together, can incite risk-taking behaviour. But also the relationship between the emotional and the rational is complex, in that humans simply don’t really make fully rational decisions. We have preferences, biases, and, yes, emotions that cause us to choose different things in different circumstances. But that’s not exactly what today’s question it about – what if there were a question, opportunity, experience or process or whatever that your board were collectively pretty excited to engage with or try out? Chances are you’d all go out of your way to be thoroughly prepared, well-informed, and ready to dive in and engage when the time came. Even though we can’t expect every moment of every board meeting to be thrilling, it’s worth aiming for every once in a while, even for a few minutes.

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?

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 6th, 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.

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.

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.

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.

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.

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.

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?