The reality of neutrality

The famous Scottish poet, Robbie Burns, once wrote “Oh would some power the gift give us, to see ourselves as others see us” and that’s pretty apt advice when it comes to impartiality – in all walks of life, including the boardroom.

We all like to think of ourselves as balanced, fair and neutral individuals and for the most part, most of us are. But there’s one area of governance where it gets tricky: our ability – or lack thereof – to look at something objectively when facing a decision that might negatively impact on us personally.

Going back a good few years, I was involved with an 11-member board and it soon became abundantly clear that the evidence suggesting a board should never exceed nine members was spot on.

This group of 11 were all paid pretty decent directors’ fees too, to the point where it’s fair to say it was something of an impost on the company.

That’s when a proposal went to the board that its numbers be reduced to eight members over a three-year period…in other words, one director would go each year until the preferred number was reached.

Of course, all the directors agreed it was a great idea but…

But not right now.

After all, the sector was going through some pretty dramatic change, it was imperative that a group that worked very well be retained to ride out the storm…and what’s that other old cliché: if it ain’t broke, don’t fix it?

The consensus was that the proposal be placed on ice for a few years, until a more appropriate time.

You don’t need to be a literary scholar to decipher a sub-text that says “I don’t like it because I could be the one to go”.

Here’s another area that always has me chuckling inside – the junket dressed up as serious work.

That’s when directors, as part of their ongoing professional development, are expected to attend courses or conferences in certain fields. They’ll gloss over the one in their home town and argue long into the night that the one in Cairns, or the fact-finding tour to New York, would be so much more valuable.

I’m being a little cynical and I concede that in some instances, this may be the case. But let’s be blunt, in many cases, it’s a jolly that delivers no more value than the home conference.

My final hide-saving example for today deals with what I’ll call the skills sham.

That’s when boards, in an attempt to achieve the desired diversity of skills, conduct a skill gap analysis. They place the skills needed in one column and the names of the current directors in another, before asking each director to assess themselves.

You’ll be amazed at how many people, with – for example – no legal, accounting or marketing experience to speak of, will happily give themselves a score of four out of five. That’s 80 per cent…for something they know nothing about!!

It bears no resemblance to truth or reality but, I guess when there’s a hide on the line, any hiding place will do.

Until next time,

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2 thoughts on “The reality of neutrality

  1. Much rings true for me.

    On the junket comment I think it’s fair to say that often the same applies to the senior executives of an organization be it private or public.

    With the skills assessment I would agree how often a member may rate themselves as having the nominated skill yet when it comes to a tax, accounting or marketing matter they will defer to their learned lawyer , accountant counterpart and more often than not contribute to the discussion at hand.

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