Back to School Time: To me, September feels like the true start of a new year. The summer refresh is over. Kids are back in school. My youngest is in grade 12, so grad games and future dress shopping are regular conversation topics. The oldest is in 2nd year at UVic (business), and discussing co-op placements. Was it really that long ago since I was in their shoes? Time flies. I digress. 💌💌 I love watching them become these interesting dynamic young adults.

Board Chair Role: I have been speaking to a number of directors and executives recently on my “listening tour”. What has been mentioned a number of times is the importance of the chair role for a well functioning board. One person also observed that it can be a very lonely role. ⛏️⛏️⛏️ If you are a chair - or seeking to become one - I encourage you to continue to grow and evolve. If you are a good chair, mentor others. Hit reply to tell me about your best (or worst) chair examples - without names, of course.

Employee Directors on Investment / JV Boards: I am working with a potential client to build out a “nominee director” training course to support their senior leaders joining the board of their joint venture investment. I love this concept, as it is one of the first ideas I had when I opened my governance consulting business. It also feeds in well to my experiences at Brookfield Renewable and B.C. Investment Management Corp, including my role as a JV director. But I see the benefit in bringing so much more than an overview of the legal duties and challenges (i.e. conflicts; information sharing) when representing your employer on an investment board. I envision it with practical advice and tools, covering the broader experiences and issues that can arise on the boards of partner/investor-owned businesses. 🔎🔎 I will be shaping my approach - and assessing its value to others - with input from some of you. Hit reply to tell me what you wish employee directors understood or did better.

This is a bit of a rant.

I have been reflecting on issues raised in the board material for one of my boards. The memo to the board describes the problem, quantifies it with data and then proposes solutions to the problem.

At first, when I reviewed the material, I started thinking about the best way to solve the problem. However, as I re-read the material, I reflected on how the problem seemed to be a rare event, with fairly light consequences when it does occur. Yes, people have complained about it, it is not the perfect state, and it is solvable. However, the solution creates some added burden and bureaucracy. I also noticed that most other peer organizations haven’t solved for this problem. Instead their public documents are discussing solutions for more significant problems affecting their stakeholders.

It made me realize that I was falling for WYSIATI. What You See is All There Is. I had read the material and analyzed the solutions that were presented to me. However, I wasn’t thinking about whether there was other relevant information and considerations.

More importantly, I realized that we may not want to choose any of the options presented. We may not want to solve the problem at all. Just because a problem was brought to our attention and it is solvable, it doesn’t mean that we should solve the problem. First, we should assess how significant a problem this really is. If it is fairly minor, we should really question whether the problem deserves to be solved. Even the simplest solutions can create bureaucracy and potentially use up stakeholder goodwill that we may need to support solving bigger problems. It can distract us from other priorities. Solutions can also create unintended consequences that we don’t envision. 

I am reminded of the message in the book “Hard Lessons in Corporate Governance” (Bryce C. Tingle), which describes the various failed attempts at using corporate governance to improve society through “best practices”. Despite the best of intentions, based on data from empirical studies those best practices are not driving the results that were intended. In some cases, they have created worse outcomes. The book is worth a read (warning: too dense for bedtime reading). Or you can review similar perspectives expressed by governance expert Matt Fullbrook.

If nothing else, it will make you think twice about adopting the never-ending list of governance best practices - especially if you have bigger problems to solve.

As the book states in its concluding paragraph “Why have we persisted over forty years to follow (admittedly plausible) theories that have consistently failed to generate the expected results? . . [W]e want to do something when a large organization creates a problem. We want to believe (and politicians need to show) that we can do something to ensure incompetence, dishonesty, fraud and recklessness will never happen again.”

🔑🔑 If you would like help solving your governance problems, let’s explore whether a governance best practice is right for your organization - or whether something else might be a better solution.

Let’s aim for Boardroom ROI, not something that merely looks good on paper.

Overstepping & Disengagement in the Boardroom

Directors may join a board with a clear understanding of their fiduciary duties.  However, once they’re in the boardroom, the lines between governance and operations often blur. Boards that drift too far into operations or pull back into passivity quickly undermine their ability to add value.

Let’s explore both ends of the spectrum and how boards can regain balance.

Overstepping: When Directors Get Too Involved

Some boards take their responsibilities so seriously that they can’t resist “rolling up their sleeves.”  Or they don’t trust management to handle the situation fully.  While a hands-on approach might feel like dedication or valued support, it often leads to unintended consequences.

Disengaged: When Directors Step Back Too Far

At the other extreme are boards that fail to step in when they should. These boards defer excessively to management, rubber-stamp decisions, or lack the preparation to provide meaningful oversight. This hands-off approach might make meetings smoother, but it has low Boardroom ROI.  It undermines the board’s credibility and leaves the organization exposed.

Finding the Balance

The goal is for directors to find the sweet spot of providing oversight and insight - and deeper involvement when circumstances truly deserve it. 

Here are three ways to get there:

Let’s keep in touch.

Referrals are always appreciated!

Please share this newsletter - my services may be exactly what they need right now.

Giving Back by Supporting Non-Profits: Is your organization improving the world on a tight budget? Each year Puimac Consulting Ltd. provides a number of presentations pro bono. Non-profits with limited budgets can inquire for more information and on availability.