High Performance Boards. Didier Cossin. Читать онлайн. Newlib. NEWLIB.NET

Автор: Didier Cossin
Издательство: John Wiley & Sons Limited
Серия:
Жанр произведения: Корпоративная культура
Год издания: 0
isbn: 9781119615699
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      Governance is the ability to take the right decisions at the top of organisations, and it is fast becoming a competitive differentiator. In an increasingly chaotic, rapidly changing environment, good governance is vital to giving organisations the resilience they need to withstand shocks. Governance drives organisations' efficiency, integrity, and social impact, all of which are necessary for sustainable success. Yet today, there are numerous examples of poor governance around the world, in the corporate, public, non-governmental, and inter-governmental domains.

      The case of Volkswagen (VW) shows how a rift between the chair and CEO can result in major governance failures. In April 2015, VW Chair Ferdinand Karl Piëch, the 78 year-old grandson of Ferdinand Porsche (who founded Porsche), made the following comment to Der Spiegel without forewarning the board: ‘I am distancing myself from [VW CEO Martin] Winterkorn’. This caused tension among the board members, who began to speculate whether it would be the chair or the CEO leaving the company. VW's executive committee (as well as supervisory board member Wolfgang Porsche, also a grandson of Ferdinand) urged Piëch to soften his statement, and publicly reiterate his support for Winterkorn. Piëch agreed – allegedly on the condition that the committee recommend that he once again be elected chair of VW's supervisory board when his contract expired in April 2017.

      This infighting was a red flag that foreshadowed the subsequent governance failure at VW. It also revealed the very human side of governance, with the frailties and flaws of the individuals involved.

      There are of course much older businesses, some of them hundreds of years old, or even a thousand years in a small number of cases. But many of them are small businesses facing few competitive challenges, such as hotels, wineries, or funeral homes. By contrast, global firms that are more than 300 or 400 years old are extremely rare.

      The strong process of natural selection in the business world has spread to non-governmental organisations – and possibly to government bodies as well. That process is probably at the heart of the success of the capitalistic market system. And in that world of accelerated natural selection, modern governance has become crucial to long-term success.

      Older companies tend to underperform. In order for a company to survive and actually thrive in the long term, it must apply the Darwinian principles of variation, selection, and replication. Just like in the natural world, the most successful firms evolve constantly to adapt to changing conditions, while those that fail to do so become extinct.

      It is worth considering variation and replication in a governance context, because of the many different models around the world. In terms of ownership structure, for example, there are publicly traded companies; family owned, private-equity owned, and government-owned firms; non-profits, members' associations, and so on.

      Yet the current global focus on excellence in governance has only been possible because of earlier success in other important areas: administration, management, and leadership. High-quality administration was developed and systematised as early as the eighteenth century by organisations such as the East India Company. Then quality management to ensure efficiency and better results was systematised in the first part of the twentieth century by business leaders such as Alfred Sloan and Henry Ford. Business schools were then established to educate leaders in management. The second part of the twentieth century saw the systematisation and theorisation of leadership – the ability to engage and energise people at a higher level – through theories developed in the 1970s.

      Today, organisations need to go to the next level. Moving from A to B, and energising people towards achieving this result, requires organisations to develop the ability to choose the right objectives and make the right decisions. And this is the essence of governance. With public trust in corporations and leaders at an all-time low, quality governance will be one of the competitive advantages of the future.

      At the same time, today's governance successes and failures stem from the reliance on leadership within organisations.