Boards failing to support creativity, innovation and entrepreneurship

Plenary Speech by Adaptation chairman

Dubai Global Convention 2017 on Business Excellence and Innovation

Board Leadership and Excellence in Creativity, Innovation and Entrepreneurship

Tuesday 18th April, 2017, Hotel The Grand Hyatt, Dubai (UAE)

Prof. Colin Coulson-Thomas*

Business leaders face many challenges. They range from disruptive technologies to new business models. For some of us incremental improvement and excellence in current activities will not be enough. We need creativity, innovation and entrepreneurship.

We are born with a drive to reach out, connect and learn. Too often education and employment inhibits the release of creative potential. They constrain and limit, rather than inspire and liberate. People learn acceptable answers. Too rarely are they encouraged to seek their own solutions.

Corporate policies and practices should encourage and support curiosity, creativity, innovation and entrepreneurship, rather than frustrate and repress them.

As directors, do we really value qualities such as independence, intuition, wide interests and non-conformism? Are critical, imaginative and independent thinking recognised and rewarded?

Many directors enjoy wielding power. They may have earned their spurs in a previous era when expectations were different and possibilities more limited. Another business model may have applied. Yet, they still think they know best. They issue policies and take decisions. They then monitor the extent to which others comply and fall in line.

Directors usually justify calling the shots. They claim position privilege, broader awareness and a more strategic perspective. In reality, many directors are preoccupied with internal issues and challenges facing their companies. Front-line staff may be much closer to customers, the marketplace and local communities. They may also be earlier adopters of new technologies.

Senior executives can be surrounded by “groupthink” and the eager to please. Cocooned within a head office, they may be unaware of ferment outside and developments on-line.

More executives should engage with, observe and experience the lives of customers. Obtaining insights from different situations can open one’s eyes to changing requirements and new possibilities. It can raise questions and spark ideas.

How self-aware are the members of your board? Do they acknowledge and address their limitations? Are they listening? Are they open to new ideas and possibilities? Do they question assumptions? Do they encourage the exploration of alternatives and the creation of new options? Do they genuinely believe in the importance of challenge, discovery, experiment, exploration and trial?

Sir Karl Popper warned of enemies of the open society. Are some boards enemies of the open company? They are excessively concerned with order and standards. They are slaves to particular models and approaches. They are intolerant of diversity and reluctant to let go and empower others.

In The Future of the Organisation I set out ten essential freedoms for removing organisational constraints and liberating latent talent. People should be encouraged to challenge. They should be supported and allowed to work, learn and collaborate in ways, and at times and places, that best allow them to give of their best and be creative and productive.

Encourage people to be open about problems and to suggest solutions. Help them to learn from mistakes and failure and to build upon achievements. Pixar appreciated the importance of candour. It blossomed because openness, honesty and constructive questioning and comment were highly valued. People actively searched for better approaches.

Many boards are intolerant of diversity. Their companies employ and serve people from many nationalities in a multitude of locations. The roles and activities of employees widely differ. Markets fragment. New business models emerge. Customers may seek bespoke and personalised responses. Yet many directors try to stamp out variety and impose uniformity.

Directors and boards have a lot to answer for. Many policies, rules, regulations, guidelines and practices reflect past views, priorities and understanding. Enforcing compliance with them can stifle questioning and challenge. It can inhibit the search for new and better alternatives.

If you feel particular constraints are necessary and desirable, make sure their rationale is understood. Reward people for considering better ways of achieving their original purpose.

Many organisations exude a dull and monotonous uniformity. No wonder so many creative ideas originate outside of the workplace. Encourage diversity. What about different strategies, policies, processes and practices according to requirements, circumstances and possibilities?

Is there sufficient diversity of experience, gender and thinking in the boardroom? What about competing research projects?

Contending interests and competing solutions threaten some people. Others perceive differences of opinion as healthy. They believe that encouraging debate is more conducive of creativity and innovation than imposing single solutions.

Be wary of rigidity and bureaucracy. Network organisations can embrace customers and business partners. They can support co-creation and grow organically. Collaboration with customers and iterative development can speed up adaptation and innovation.

C P Snow warned of a growing division between science and the humanities, and the emergence of two distinct cultures. Within many companies today, is another division emerging?

Some people think in a logical and structured way. They prefer order and standardisation. Others are more tolerant of uncertainty. They favour variety and welcome diversity. They look for links, patterns and relationships. They can simultaneously explore in different arenas?

During its golden years, Xerox PARC recruited degree majors from disciplines that approached problems differently. Introducing them into research groups increased creativity. Throughout history breakthroughs in thinking have been caused by outsiders who challenged orthodoxy.

Do you look beyond the normal suspects? Are you alert to curious and restless explorers? Might greater exposure to the creative arts stimulate creativity in your organisation?

The creative arts are undergoing a revolution. Digital technologies are creating new opportunities for engagement and involvement. They are opening up new arenas for innovation and entrepreneurship. They are democratising enjoyment of the arts and participation in the arts.

More people can now find their voice and express their creativity. Channels of communication have become more open, inclusive and participative. We have more ways of being creative, connecting with others, and sharing our creativity than any generation in history.

The creative arts can enrich both working and leisure activities. They are ripe for enterprise and social entrepreneurship. They also reach beyond practitioners. They embrace the audiences, followers and exhibition visitors who enjoy their work at home or in the community.

Collaboration with creative artists can unleash energy and ignite thinking. Creative artists in residence and creative arts activities can stimulate imagination, innovation and entrepreneurship across work groups, communities and organisations.

The creative arts can also address social issues. They offer participation and self-employment as an alternative to boredom, delinquency and crime. They provide scope for philanthropy, corporate social responsibility and social entrepreneurship.

The creative arts are sustainable. Repetitive and rule-based tasks can be automated. Unstructured creative activities are more resistant to replacement by technology.

For business success, creative ideas have to be developed and commercialised. Innovation and entrepreneurial flair may be needed to deliver tangible offerings or acceptable solutions at affordable prices, that enough people will buy to cover costs and generate a profit.

While Pixar exuded creativity, attention was also devoted to practical business issues such as brand building, rights and acknowledgements. Addressing contractual matters ensured the studio derived the maximum of credit and benefit from its creativity and promising ideas

For companies to become more effective incubators of new ventures, corporate policies, rules, guidelines, standards, codes and compliance practices may need to change.

Options, choices and possibilities are multiplying. As new business and economic models emerge, past strengths can become sources of weakness and vulnerability. Directors need to be alert to defensive responses and attempts to protect vested interests.

Education and involvement in the creative arts can enhance, enable, enrich and empower. It can stimulate the creativity and commitment that leads to successful innovation and entrepreneurship. Sir James Dyson the inventor, industrial designer and vacuum cleaner entrepreneur was educated at the Byam Shaw School of Art and the Royal College of Art.

The School for the Creative Arts aims to give people the ability to explore and develop ideas, implement a business plan and fulfil commissions. Its role is to give people the ability and confidence to express themselves and become successful practitioners.

Business leaders need to discuss, consult and consider where creativity, innovation and entrepreneurship are most needed. What should they be applied to and for what purpose? What might their relevance, significance and value be for customers and prospects?

Should we take a wider range of interests into account when deciding when, where and for whom to be creative, innovative and entrepreneurial?

To have a dream can be inspiring. A relevant and affordable offering can provide an income. In business both thinking and doing are required. We need aspiration and achievement.

The requirements for effective corporate leadership and successful entrepreneurship are converging. In some contexts they may soon overlap to such an extent as to be almost indistinguishable. I wish you well as both leaders and entrepreneurs.

Notes

This talk draws upon a position paper published by Adaptation: Coulson-Thomas, Colin (2017), The Case for the Creative Arts [Position Paper No. 1/17], Peterborough, Adaptation and a chapter in the souvenir book to accompany the event: Coulson-Thomas, Colin (2017), Creativity, Innovation and the Board, in Institute of Directors. Dubai Global Convention 2017 / 27th World Congress on Business Excellence and Innovation, Souvenir, 18-20 April 2017, Dubai, United Arab Emirates, New Delhi, Institute of Directors

The speech was delivered in a plenary session of the Dubai Global Convention 2017 and 27th World Congress on Business Excellence and Innovation held on Tuesday 18th April in the Al Ameera Hall of the Hotel The Grand Hyatt, Dubai, United Arab Emirates.

Further Information

Details of forthcoming programmes at the School for the Creative Arts to encourage and develop creativity, innovation and entrepreneurship for leadership in the creative arts will be available on www.sca.edu.gh.

Speaker Profile

*Prof. (Dr) Colin Coulson-Thomas is Adaptation chairman, Chancellor and a Professorial Fellow at the School for the Creative Arts, Honorary Professor at the Aston India Centre for Applied Research (Aston University) and holds a Distinguished Professorship at the Sri Sharada Institute of Indian Management-Research. In addition to board and academic roles, he is Director-General, IOD India, UK and Europe, leads the International Governance Initiative of the Order of St Lazarus, chairs the group Risk and Audit Committee of United Learning and is a member of the Advisory Board of Bridges of Sports. Colin has served on public sector boards at national, regional and local level and been the chairman and/or president of professional, voluntary and representative bodies. The author of some 70 books and reports and over 1,000 articles he has held professorial appointments in Europe, North and South America, the Middle East, India and China. He has helped organisations in over 40 countries to harness more of the potential of their people in order to build a business or deliver better services, improve performance and simultaneously deliver multiple objectives. He has also contributed plenary addresses to over 300 national and international events, and was educated at the London School of Economics, the London Business School, UNISA and the Universities of Aston, Chicago and Southern California. A fellow of seven chartered bodies he secured first place prizes in the final examinations of three professions. He can be contacted at colin@coulson-thomas.com. His latest publications on quicker, more affordable and less disruptive routes to high performance organisations are available from www.policypublications.com.

 

26 Apr 2017
Colin Coulson-Thomas

Distinguished professorship conferred on Adaptation chairman

A Distinguished Professorship has been conferred upon Adaptation chairman Prof. Colin Coulson-Thomas at a ceremony in New Delhi at the Sri Sharada Institute of Indian Management-Research. The Institute is a university institution approved by the Government of India.

The author of Winning Companies; Winning People, Developing Directors, a handbook for building an effective boardroom team, Transforming Knowledge Management, Talent Management 2 and Transforming Public Services, was in India to speak at the 2017 Global Convention on Corporate Ethics and Risk Management for which he provided the theme paper and at which he also presented conclusions and recommendations.

Prof. Colin Coulson-Thomas has helped directors in over 40 countries to improve board and corporate performance. He leads the International Governance Initiative of the Order of St Lazarus, is Chancellor and a Professorial Fellow at the School for the Creative Arts, Director-General, IOD India, UK and Europe, chair of the Risk and Audit Committee of United Learning and Honorary Professor at Aston University. Author of over 60 books and reports, he has served on corporate boards and local and national UK public sector boards.

Since becoming the world’s first professor of corporate transformation in 1994 Coulson-Thomas has held professorial appointments in Europe, North and South America, Africa, the Middle East, India and China. He was educated at the London School of Economics, London Business School, UNISA and the Universities of Aston, Chicago and Southern California. He is a fellow of seven chartered bodies and obtained first place prizes in the final exams of three professions. His latest books and reports can be obtained from http://www.policypublications.com/

 

27 Feb 2017
Colin Coulson-Thomas

Global convention call for more positive and forward looking approaches to risk management

Global Convention on Corporate Ethics and Risk Management

Corporate Ethics and Risk Management in an Uncertain World

18th February, 2017

Bombay Stock Exchange, Dalal Street, Mumbai, India

Plenary Session X Special Valedictory Session (Conclusions and Recommendations)

Prof. Colin Coulson-Thomas*

Some of the key terms that we have been using at this convention mean different things to different people. We and those we are seeking to help and support would benefit from a shared understanding of what we mean by terms such as ethics, risk and culture.

Increasingly, contemporary organisations are networks of voluntary relationships built upon trust. People and organisations tend to trust those who treat them fairly and who act with integrity.

Integrity and ethical conduct are more than a nice to have. We recognise them when we see them. We also notice and alert others to their absence. Instinctively knowing what the right thing to do is and being able to act as a role model should be key criteria for the selection and appointment of directors and leaders.

In relation to both ethics and risk, we need to be realistic and accept the limitations of our current practices and the dangers of using out-of-date approaches and models. We need to anticipate challenges and failures and be prepared to handle them and both recover and more forward.

Risk is too important to just be left to a small group of professionals in a head office environment. Too often those in the front-line who are closest to emerging issues leave identifying, assessing and addressing them to specialists.

No-one may have experience of a new and unexpected development. Risk needs to be seen as an aspect of a much wider range of roles from the bottom to the top of an organisation. How it is handled needs to be built into systems, processes and tools in a way that can be quickly updated.

Communications relating to risk need to be two-way and all those involved should be vigilant and open-minded. Opportunities should be explored for using personalised performance support to make ethical and risk guidance available on a 24/7 basis whenever and wherever required, including when people are on the move.

Acknowledgement and understanding of ethics and risk should be an integral element of school education. It should have an important place in the curriculum of business studies and business school courses. It should be an integral element of the preparation of the members of most if not all professions. Priority should be given to handling ethical and risk dilemmas and incorporating ethics and risk in decision making.

Education for risk should avoid portraying risk as negative – as a problem. Risk should be viewed positively and seen as an aspect of life, as an integral element of entrepreneurship and as an enabler and an arena of opportunity.

Risk management is more than avoiding downsides, costs and losses. It is about creating a better future. We need to look at what we can do to help customers and others to cope with risks they face and so turn their challenges into business opportunities.

Risk is not just for business and management practitioners and professionals. Assessing risk is important for engineers, medical practitioners and many other professionals. Their instincts and approaches may be more relevant to issues currently faced by boards than those of risk management professionals using approaches developed when different priorities and business models applied.

Medical practitioners understand the risks of various treatments. They accept that for certain conditions there may not be a cure, but it may be possible to manage a long-term condition. If organisations are living organisms we should learn from medical and other professions.

The diversity, variability and unreliability of human beings is a major source of risk. In particular, we need to learn from groups such as human resources practitioners.

People face a variety of risks in their personal lives and in their homes as well as when at work. Individuals like organisations can be hacked and they can become victims of cyber-fraud. Like medicine, risk management can be seen and portrayed as a caring profession – concerned with protecting people as individuals and in their communities and organisations.

We can also learn from the roles of specialists within the medical world. General risk practitioners may only take us so far. Do we need to specialise more, for example offering post-qualification development options in areas such as cyber-security?

In a world of mutating risks and unexpected and disruptive developments, professional qualifications – and even the shared experience of professionals – can quickly become out of date. We need real time updating in certain areas.

Within any profession there are a small number of super-stars and a large number of average practitioners. The more routine, repetitive, structured and rule based activities of professionals will increasingly be replaced by expert systems that will be refined and updated by some of the superstars. Other super-stars might work as consultants to make their skills available to more than a single employer.

Risk management needs to embrace supply chains, customer aspirations and networks of relationships. It needs to be forward looking and concerned with the support of decision making and creating a safer and more secure and sustainable future.

One can sometimes go beyond protection. Cyber-security specialists may have options to track and respond to attacks, either alone or in collaboration with relevant law enforcement agencies.

Risk management needs to offer affordable, timely and practical advice and solutions. When there are narrow and shortening windows of opportunity there may be little point suggesting a multi-year transformation or culture change programme. Requirements and a business model may change long before it is implemented. Living, adaptive and flexible approaches are required.

Complex and interdependent risks do not necessarily require complex and expensive solutions. They can sometimes be best addressed by quicker and simpler approaches. If behaviour change is required, one should use levers that can be quickly operated such as changing a pay plan or updating the performance support that makes it easy to do the right thing and difficult to do the wrong thing.

We need to recognise the reality of threats we face in areas such as cyber-security and that collaboration can be more effective than operating alone. Most cases of hacking and cyber-fraud are not reported. Sharing an experience with ones peers and law enforcement agencies can increase understanding of the threat environment and improve planning of counter measures.

We also need to be prepared to innovate and explore. We must play our part in addressing future applications of disruptive technologies. For example, we should take steps now to anticipate the risks associated with various adoptions of block-chain technology and consider possible next steps.

Compliance with outdated requirements can leave the door open to new risks. To innovate we need to be open to discussion, debate and new developments. Rather than unthinkingly apply a standard approach we need to encourage greater diversity and be prepared to simultaneously explore a number of different solutions.

Ethics and risks are inter-related and inter-dependent. Manufacturers of mobile and internet-of-things devices need to take responsibility for reducing the risk of their connected products being misused. Many users just opt for standard manufacturer passwords which are known to hackers. Responsible manufactures should ensure customers are made aware of the risks involved.

If risk managers want acceptance as a recognised profession they much accept and discharge the responsibilities this involves, for example to protect the public as well as members.

As a profession, risk management needs to become involved in public debates. For example, manufactures of mobile devices feel they have a duty to use encryption to protect the confidentiality of their customers’ communications. This same encryption can prevent law enforcement and security agencies from tracking the communications of criminal and terrorist suspects. Governments and societies sometimes face difficult choices when protecting people from some risks can leave them open to other risks.

In such areas your counsel as leaders of the risk management community could make a difference. In so many aspects of our lives we need your engagement and support. I do wish you all the best.

*Prof. Colin Coulson-Thomas has helped directors in over 40 countries to improve board and corporate performance. He leads the International Governance Initiative of the Order of St Lazarus, is Chancellor and Professorial Fellow at the School for the Creative Arts, Director-General, IOD India, UK and Europe, chair of the Risk and Audit Committee of United Learning and Honorary Professor at Aston University. Author of over 60 books and reports he has served on corporate boards and local and national UK public sector boards, and held professorial appointments in Europe, North and South America, Africa, the Middle East, India and China. Colin was educated at the London School of Economics, London Business School, UNISA and the Universities of Aston, Chicago and Southern California. He is a fellow of seven chartered bodies and obtained first place prizes in the final exams of three professions.

 

25 Feb 2017
Colin Coulson-Thomas

Global convention told that management and governance practices are increasing risk

Global Convention on Corporate Ethics and Risk Management

Corporate Ethics and Risk Management in an Uncertain World

Bombay Stock Exchange, Dalal Street, Mumbai, India

Plenary Session III, 17th February, 2017

Enterprise Risk Management: Board Perspectives (Questioning Risk Management)

Prof. Colin Coulson-Thomas*

Directors and boards should make sure that policies and governance arrangements are in place to ensure ethical decision making and effective risk management. Record losses announced this week by Rolls Royce illustrate the consequences of ethical misconduct and risk mismanagement.

In relation to risk, should we be taking a hard look at ourselves and whether our approaches and board practices are creating an unnecessarily high degree of risk? Why is risk management not just management? Surely risk is an integral element of business, management and life.

Risks present both challenges and opportunities. The taking of reasonable and calculated risks is at the heart of entrepreneurship. It is essential for innovation and progress. Innovation may be risky, but not innovating is even more risky and can lead to stagnation.

Uncertainty abounds – From the unpredictability of political and economic events to the relentless pace of innovation, discovery and scientific advance – From the impacts of disruptive technologies to the emergence of new business models and markets. We have come to expect the unexpected. We are no longer surprised by surprises.

There are consequences for risk managers and risk management. Are our existing approaches still valid and up-to-date? Do risk management and governance practices need to be refined, or do they have to be re-invented? Are our outdated models and practices a major risk factor?

Twenty five years ago, in my book Transforming the Company I argued that organisations should not be viewed as structures with hard shells, or as machines to be re-engineered. I suggested they are living networks of inter-connected relationships and collaborations that can grow organically.

The subtitle of Transforming the Company was ‘bridging the gap between management myth and corporate reality’. Is the notion that we are managing various risks a myth or a reality? Are risks under control, or in many cases are are we groping for ways of handling them? Where in our changing world is the innovation in our thinking about risk management and governance practice?

Are we just going around in circles like the feedback loops in our tidy models? Why do we still undertake annual reviews? Why do we measure performance against objectives that were set when different market conditions, priorities, even business models applied? Why do we devote time to ritualistic exercises whose outputs are quickly forgotten or over-taken by events?

Are aspects of corporate governance rhetoric a con? Are directors providing strategic direction, or are they keeping their fingers crossed and hoping for the best? With companies de-listing, and in an era of crowd-funding and co-creation, why is corporate governance so obsessed with shareholders? Why are customers still regarded as outsiders?

How relevant are concepts such as vision, mission, values, goals, objectives and strategy in uncertain contexts in which disruptions abound? How useful are practices such as monthly board meetings, corporate planning and annual reporting where change is relentless and intervals between reinventions dramatically shorten?

Thirty years ago I wrote an article entitled Strategic Vision or Strategic Con? It was published in a journal optimistically called Long Range Planning. Why do boards perpetuate planning myths? Why don’t they embrace intelligent steering, confidence accounting and real time information?

Why do so many boards treat employees as dependants and targets for their one-way messages? Is this why so few employees report ethical and/or risk concerns? Why do whistle-blowers invariably suffer for speaking up? Is protection promised to whistle-blowers another con?

How many boards are truly innovation driven? Is their commitment to innovation rhetoric rather than reality? Do boards only adopt innovations that match existing policies, strategies, values, cultures and capabilities? Would they be prepared to review any or all of these in the light of exciting opportunities created by a disruptive technology?

High risks in certain areas can sometimes be balanced within a portfolio of activities and/or products by other items with lower risk profiles. Is an anti-diversification bias and the fashionable strategy of focusing upon a core business increasing risk by putting “all eggs in one basket”?

The nature and source of risks can change. Processes, systems, business models and governance arrangements need to be flexible and adaptive as well as robust and resilient. They also need to reflect the inter-connected nature of contemporary corporations.

Risk management and governance should extend to a company’s customers, business partners, supply chain and other stakeholders. So should cyber-security measures. They should embrace corporate data held externally, corporate systems operated by third parties, mobile devices and people working from connected homes.

Corporate systems and processes should be sufficiently resilient to withstand the simultaneous materialisation of multiple risks. Boards should be aware of dependency upon collaborations, utilities, public services and banking, legal, regulatory, transportation and other systems. In cyber-warfare many of you will be in the front line. There will be people trying to shut you down.

A board should establish, communicate and regularly review its risk appetite. The level of risk it is prepared to accept in different areas should reflect changing challenges and opportunities. Which collaborators and stakeholders should be involved and how often should they be engaged?

Does risk management have to just be about our problems and those of our companies? Should it also be about what our companies could do to help customers and wider society confront the risks they face? Should it be more about turning challenges into opportunities?

Wider society faces many challenges. Large numbers of jobs are at risk from disruptive technology. Repetitive jobs and those requiring logic and structure are particularly at risk. Yet opportunities abound to enable people to live healthier and more rewarding lives. Entrepreneurship in creative arts that are less resistant to automation can deliver cultural, social and economic benefits.

Performance support represents an affordable, quicker and less disruptive approach to high performance and the simultaneous delivery of multiple objectives. It could end traditional trade-offs between risk and return. As well as enabling people to be current and to excel in key roles, performance support can both increase returns and reduce certain risks.

How many risk management professionals have been held to account for the CDOs that threatened to explode and bring down the international financial system? Were they looking the other way? Did they know and understand the risks that banks were running? Did their warnings not reach bank boards? Should they have persisted in ringing alarm bells and ensuring their messages got through?

Thirty years ago I was writing a report that was published as The New Professionals. It set out my views on how professionals and professional practices and bodies needed to change to remain relevant and deliver positive value as opposed to being a cost. Since then many of the changes I have observed have been about avoiding liability, accountability and responsibility.

The focus of some professionals is too often upon themselves and the needs of their firms rather than upon ethical and responsible conduct, their clients and wider society. Too many professionals have become a vested interest, advocating changes, approaches and practices that create more work for themselves and impose additional requirements and extra costs on others.

Thirty years ago, although I had enjoyed a stimulating visit to Xerox PARC, I had left my role at Rank Xerox. I felt the priority the company put on top-down policy deployment, immediate objectives, meeting plan and compliance would undermine its strategy to move into integrated office systems. It did not surprise me when Xerox subsequently outsourced its own systems.

Prevailing corporate practices can represent a significant risk. Xerox rested on its American Samurai laurels. It celebrated quality awards for heritage activities rather than create a business model, capabilities and new ways of operating that would make the visions of the Xerox PARC community a reality. Past achievements in a different situation are no guarantee of future success.

Top-down approaches can stifle creativity. The risk of unfulfilled potential and missed opportunities is especially high where there is inflexibility, limited challenge and a lack of freedom and diversity of thinking. Direction is about thinking as well as doing. Directors can play a key role in challenging traditional assumptions, conventional wisdom and prevailing practices.

Today’s directors are expected to exercise individual judgement and take a wider range of interests into account. They should also avoid self-interest, resist vested interests and focus on what is best for the companies on whose boards they serve. The last 30 years have taught me that one of the surest ways of building trust and reducing strategic risk is to encourage challenge and diversity of thinking and build an effective board of competent directors.

*Prof. Colin Coulson-Thomas has helped directors in over 40 countries to improve board and corporate performance. He leads the International Governance Initiative of the Order of St Lazarus, is Chancellor and Professorial Fellow at the School for the Creative Arts, Director-General, IOD India, UK and Europe, chair of the Risk and Audit Committee of United Learning and Honorary Professor at Aston University. Author of over 60 books and reports he has served on corporate boards and local and national UK public sector boards, and held professorial appointments in Europe, North and South America, Africa, the Middle East, India and China. Colin was educated at the London School of Economics, London Business School, UNISA and the Universities of Aston, Chicago and Southern California. He is a fellow of seven chartered bodies and obtained first place prizes in the final exams of three professions.

 

23 Feb 2017
Colin Coulson-Thomas

Influential business expert and author appointed as honorary professor

Authority on creating high performance organisations becomes honorary professor at Aston University

Professor Colin Coulson-Thomas, Chairman of Adaptation and author of Winning Companies, Winning People and more than 70 other books and reports has been appointed an honorary professor of Aston University. He is a leading expert in direction and leadership, competitiveness and corporate governance and transformation. His previous achievements include a portfolio of professorial appointments across the world, advising corporate and public bodies to improve performance, and leading over 20 investigations into high performance organisations.

Professor Coulson-Thomas is an experienced chairman of award-winning companies and vision holder of successful transformation programmes who has travelled the world taking professorial appointments at universities on nearly every continent, advising corporations and public bodies, and speaking at major corporate events and conferences – all in the name of improving the performance of organisations of all kinds. Reports of his investigations are published by Policy Publications.

Coulson-Thomas has served on local, regional and national UK public sector boards, written more than 1,000 articles and more than 70 books and reports, and has led more than 20 investigations to identify the critical success factors for key corporate activities and quicker, more affordable and less disruptive routes to high performance organisations. His current international roles include leading the international governance initiative of the Order of St Lazarus and the post of Director-General, UK and Europe for the Institute of Directors, India.

Professor Colin Coulson-Thomas said: “The University from which one obtains a PhD will always be special, and even more so if it shares one’s engagement with India and one’s commitment to building relationships between India and the UK. I have met Aston alumni in India in senior positions and I look forward to working with the Aston India Foundation for Applied Research to the benefit of both countries.”

The professor regularly speaks at international conferences, congresses, conventions and summits. His recent publications, including Winning Companies; Winning People, Developing Directors, A handbook for building an effective boardroom team, Transforming Knowledge Management, Talent Management 2 and Transforming Public Services and reports on investigations he has led into winning business, building customer relationships, corporate learning, exploiting know-how, pricing and purchasing can be obtained from www.policypublications.com.

 

10 Feb 2017
Colin Coulson-Thomas

Global convention call for companies to work for the many and not just the few

16th London Global Convention on Corporate Governance and Sustainability

Theme: Boards Evolving Role in an Uncertain Global Economy

Companies need to work for all and not just the few*

Prof. Colin Coulson-Thomas+

Responding to challenges and opportunities in the global economy and helping people to cope with them is creating an historic opportunity for businesses, government, public bodies and regulators to work together to ensure the results of growth are more widely shared. We could be on the threshold of a new era of cooperation and collaborative capitalism.

The contemporary company is a network of relationships with stakeholders. Among these stakeholders, customers, employees, suppliers and business partners can be as important as shareholders if not more important for a company’s growth and development..

While in company law the interests of shareholders have been paramount, in practice directors have to achieve a balance between the interests of all stakeholders. If not satisfied, each group of stakeholders might take decisions that could harm the future prospects of a company.

While some investors might sell their shares if not satisfied with dividend levels, customers who feel short changed and key employees who are dissatisfied may look elsewhere. Important suppliers and business partners who are not fairly treated might give more priority to other relationships, or even walk away.

A board cannot give so much away that it does not retain sufficient resources for building the capabilities to ensure a company’s own survival and development. Relationships with stakeholders need to be mutually beneficial and based on trust if they are to endure in uncertain times.

Uncertainty can be unsettling, but collaborative responses to uncertainty can create closer and more strategic relationships with customers, suppliers and business partners. Unfortunately, a combination of corporate governance scandals, allegations of excessive executive pay and cases of inadequate funding of pension obligations has resulted in a degree of public cynicism and distrust.

With certain stakeholders some directors and boards need to take urgent steps to restore and sustain confidence, credibility and trust. Traditional responsibilities to ensure solvency and promote the best interests of a company remain. Value still needs to be created, but many boards need to devote more attention to its allocation in order to benefit more stakeholders and a wider society.

Efficiency, economy, innovation and productivity in value creation are still vital for sustainability. The bigger the cake the more there is to allocate, including to the company itself to build and sustain its continuing capability to create future value.

Revisions of company law have recognised the wider responsibilities of directors. In the UK’s Companies Act, when taking decisions they are now expected to have regard to the interests of stakeholders other than shareholders. In India, companies that meet stated criteria are expected to devote 2% of net profit to socially responsible activities.

Wider society faces many of the challenges faced by boards, including sustainability and coping with uncertainty. Given technological developments, of particular concern to many people and governments is the question of where future jobs will come from. Those who are not employed by others and who do not become self-employed and entrepreneurs will need activities to occupy them. They will also require some form of income or other financial support to cover the basics of life.

At the 2016 Conservative Party Conference, a theme of UK Prime Minister Theresa May’s speech and a challenge to her ministerial team was creating an economy that works for all and not just a few. Given the common challenges facing them, other governments may share this ambition.

Our challenge as directors is increasingly to build companies that work for all and not just a few.
If we can restore trust and build confidence and credibility, we have a once in a generation opportunity for collaboration, cooperation and partnerships with other enterprises, governments, legislators, regulators, public bodies and other stakeholders. We can work together to create and build economies of companies that benefit wider society and future generations.

*These concluding comments by Prof. Colin Coulson-Thomas were made on Wednesday 19th October, 2016 at the end of Plenary Session X to summarise some of the main issues that emerged at the international conference of the 16th London Global Convention on Corporate Governance and Sustainability which was held at the Millennium Hotel, 44 Grosvenor Square, London W1K 2HP, UK. The convention was organised by the Institute of Directors, India

+Prof. Colin Coulson-Thomas, an experienced director and board advisor, leads the International Governance Initiative of the Order of St Lazarus, is Director-General, IOD India, UK and Europe, Chancellor and a Professorial Fellow of the School for the Creative Arts, Chairman of the Audit and Risk Committee of United Learning and a member of the advisory board of Bridges of Sports. He has helped to improve director, board and corporate performance in over 40 countries. Author of over 60 books and reports he has held professorial appointments in Europe, North and South America, the Middle East, India and China. Colin was educated at the London School of Economics, the London Business School, UNISA and the Universities of Aston, Chicago and Southern California. He is a fellow of seven chartered bodies. His recent publications can be obtained from: http://www.policypublications.com/

 

27 Oct 2016
Colin Coulson-Thomas

Global convention call for entrepreneurs and directors to be bouncing balls to cope with uncertainty

Adaptation chairman’s speech to 16th London Global Convention on Corporate Governance and Sustainability

Enhancing the Effectiveness of Tomorrow’s Boards:
Issues and Questions for Entrepreneurs, Business Owners and Board Chairs*

Prof. Colin Coulson-Thomas+

Could your directors and board contribute more to the growth and development of your business? What might tomorrow’s board look like and who should be appointed to it? The theme of this year’s London Global Convention on Corporate Governance and Sustainability convention is the board’s evolving role in an uncertain global economy, which raises important issues for entrepreneurs, business owners and board chairs.

Are your directors primarily, or exclusively, drawn from the country in which your company is incorporated and/or where its head office is located? How global is your board in terms of its awareness and perspective? In today’s world international awareness and perspective can be more important than nationality.

Given the uncertainty in the international marketplace, how flexible are your board and corporate processes? How might greater flexibility be introduced into your company’s infrastructure, estate, contracts and relationships?

How could you speed up responses? How might evolution and adaptation be built into how your company operates, is structured and is governed? In rapidly changing contexts, are you planning or intelligently steering your company?

Greater uncertainty has many implications: for the questions we ask; for policy making; for what we delegate and to whom; and for how decisions are made. When new situations arise, we may not have an agreed position. We may not know trusted experts to whom we can turn for counsel.

Uncertainty is challenging, but we need a sense of perspective. Collaborative responses to uncertainty can create closer and more strategic relationships with customers, suppliers and business partners.

Uncertainty has always been a fact of life for many – if not most – entrepreneurs. We are constantly told that markets don’t like uncertainty. When there is uncertainty cautious and risk averse boards put their investment plans on hold.

More adventurous, courageous and entrepreneurial spirits respond differently. They are often both more resilient and more willing to be proactive. During periods of uncertainty, they gain competitive advantage, grow market share and develop first mover leads while others hold back.

Opportunity could be another word for uncertainty. Our challenging business environment offers unprecedented opportunities.

Whether your organisation is a large and listed corporation, a family business or a small or social enterprise, many directors are already confronting uncertainty and striving to build a better tomorrow.

Appropriately, the topic for this session is enhancing the effectiveness of tomorrow’s boards. The extent to which your board is fearful, reactive and defensive rather confident, proactive and innovative should raise questions about the steps required to enhance the effectiveness of your board.

Were existing directors appointed because of their past achievements and experiences in yesterday’s world, or their openness to future possibilities? At board meetings do they contribute war stories of what they did when your company had a different business model?

Are directors providing challenge and asking the right questions? Are they trying to improve and/or protect what exists, or create new and better alternatives? How do they relate to generation Z?

Where will tomorrow’s directors come from and how will they be prepared for their boardroom roles? What contributions will you expect from them?

Taking a cue from Rt. Hon. Theresa May MP, the UK Prime Minister, will there be customers and employees on your boards? If so, how will they be selected and how will you handle conflicts of interest when matters affecting customers and employees are discussed?

Crucially, will there be greater diversity of thinking on tomorrow’s corporate boards? What will they look like? Will their remit and how they operate change?

What form will future board meetings take? Will existing agendas, annual calendars of business and practices still be relevant?

Will monthly board meetings survive? When operations are 24/7, significant issues and narrow windows of opportunity can arise at any time. Could waiting for the next board meeting be viewed as an archaic and dangerous practice?

Greater connectivity and speed of response is increasing the number of decisions that have to be quickly made. Deciding how and when to act can be as important as determining what to do.

Will a structure of permanent board committees give way to networks, communities and project groups? New rules of engagement may be required, covering both directors and those who advise them. Who needs to be engaged, by what means and when?

What will tomorrow’s company look like? To whom should it be accountable? As more companies transition to flexible and responsive portfolios of projects and mutating networks of collaborative relationships I advocated in my 1992 book Transforming the Company, how will they be governed?

Does corporate governance need to become more open and democratic? Should it involve more people? Should a wider range of inputs be sought when visioning and other exercises are undertaken?

Will company law, the activities of regulators and governance practices keep pace with the consequences of greater use of crowd funding, sharing, bartering and non-monetary exchange?

Board effectiveness and performance can depend upon the context, stakeholder requirements, ambitions, the stage of development of a business and the nature of the issues and opportunities it faces. Can the current degree of relative uniformity in governance practices survive?

Should different companies, subsidiaries, business units and strategic projects be governed and managed in quite different ways, according to their situation and circumstances? Might a variety of approaches to control and compliance be required?

In a world of greater diversity, rapid change and periodic adoption of new business models, who do we benchmark against?

Tomorrow’s boards will reflect decisions we take today. For new board members, do you look in familiar places or cast the net more widely? Predicting the specific experience, expertise, qualifications and track record that may be relevant in future scenarios is not easy, but integrity and personal qualities may become even more important than they are today.

We need directors who can handle turbulence and uncertainty. They have to assess risks, make choices and take decisions in shifting situations, where data may be suspect and probabilities are changing. We need people who instinctively do the right things.

The rarefied atmosphere of corporate head offices can lead to over-sophistication. Faced with uncertainty, some people hide behind prison bars of their own creation. They are so concerned with avoiding risks and compliance that they loose the courage to be entrepreneurial and to have a go.

When making board appointments, be wary of candidates who have effortlessly advanced in a period of greater stability and certainty than we have today. How resilient will they be when tested? In crisis situations, some people surprise us and rise to the occasion, while others disappoint.

Don’t overlook the latent potential of your existing team. Finding what we need within ourselves rather than looking for what might not exist is a key message from a classic 1939 film, The Wizard of Oz.

Transported to the land of Oz, young Dorothy set out on an uncertain and potentially dangerous journey with three companions: a tin man with a hard shell who felt he needed compassion and wanted a heart; a cowardly lion who wanted courage; a scarecrow who wanted a brain so that he could think.

Dorothy and her companions faced a succession of challenges, but they stayed together. They found within themselves the compassion, courage and thinking required to cope with adversity and overcome obstacles. How tomorrow’s boards will cope and be perceived will depend critically upon the extent to which future directors possess these and other personal qualities.

While new blood on a board can be welcome, where there is humility and self-awareness there is the possibility of renewal, reinvention and reinvigoration.

Understanding and addressing the deficiencies within your existing directors and board might enable you to identify, release and/or develop what you require to confront and exploit uncertainty. It may allow you to build a positive and resilient team of ‘bouncing balls’ who can repeatedly recover and move forward.

+Prof. Colin Coulson-Thomas, an experienced director and chairman of Adaptation, has helped directors in over 40 countries to improve director, board and corporate performance. Author of over 60 books and reports he has held professorial appointments in Europe, North and South America, the Middle East, India and China. Colin was educated at the LSE, London Business School, UNISA and the Universities of Aston, Chicago and Southern California. He is a fellow of seven chartered bodies. His latest publications can be obtained from: http://www.policypublications.com/

*Speech delivered in Plenary Session III of the international conference of the 16th London Global Convention on Corporate Governance and Sustainability between 12.15 and 13.30 hours at the Millennium Hotel, 44 Grosvenor Square, London W1K 2HP on Tuesday 18th October, 2016

 

26 Oct 2016
Colin Coulson-Thomas

Theme Paper for 16th London Global Convention on Governance and Sustainability

Governance for Sustainability and the Sustainability of Governance

Prof. Colin Coulson-Thomas*

What should be the evolving role of the board in an uncertain global economy? What changes are needed in governance arrangements and board practices to accommodate greater diversity, ensure sustainable innovation and enable more confident and flexible responses to new opportunities and mutating risks? What needs to be done for sustainability to become a new business paradigm? These and related issues will be discussed at IOD India’s 2016 London Global Convention.

The 16th London Global Convention on Corporate Governance and Sustainability will review the current and emerging roles and responsibilities of directors and boards, and explore ways of enhancing their effectiveness. With corporate governance at a cross roads and facing multiple challenges, the issues, options and opportunities will be explored from a global perspective.

The Future of Boards

Our corporate governance institutions, codes, principles and practices largely derive from reactions to problems encountered by certain quoted companies in particular countries in what now appears a bygone age. Are they sustainable? In the countries in which the first corporate governance reports appeared the number of companies de-listing has exceeded the number of new listings and many of the new entrants require much less investment in physical assets and/or employ far fewer people.

Corporations face multiple threats. Individual consumers can increasingly use on-line platforms to help themselves or connect with other individuals who can help them, whether by giving them a lift or renting a room. As more offerings are bought on-line and/or produced at home or locally by 3D printer, and lifestyles change to accommodate the need for greater sustainability, what will happen to manufacturers, retailers and distribution chains? Will corporate governance experience the decline of corporations and their de-listing, or like a virus will it mutate to find new hosts?

What will boards and boardrooms look like in five, ten or fifteen years? Will the downward trend in the size of boards with significantly fewer executive directors experienced in some jurisdictions continue? Will board composition change in terms of age, gender and nationality? Will boardrooms and monthly meetings be needed as more connected directors deal with issues as and when they arise, and make greater use of conferencing technologies? In a fast moving world, will waiting for the next opportunity to get onto the agenda of a monthly board meeting seem an archaic practice?

Relationships with Stakeholders

In UK company law directors are required to take account of the interests of stakeholders when they take their decisions. However, are increasing levels of CEO and top executive pay and higher loss of office compensation payments an indication that directors are primarily concerned with their own interests? To mix metaphors, are many directors feathering their nests while they have their snouts in the trough? Was the rejection by BP shareholders of a pay package proposed for the company’s chief executive a foretaste of greater shareholder activism and proxy wars to come?

Customers represent an important stakeholder group. Without their continuing support a business cannot survive, while for many customers what happens to their suppliers is of great significance. For some, their purchases can be a matter of life or death. Many activities, operations and associated jobs are dependent upon bought in raw materials, components, supplies or services.

Judging by the problems customers often experience when trying to speak to someone about an issue, companies seem to take their money and then keep them at arms length. In place of head-office teams suggesting what customers might want, should more companies ask them, track their responses and follow what they do in real time? How many CEOs who talk about the importance of the customers whose purchases pay their salaries seek to involve them in the governance process?

Boards in the Political Spotlight

If directors do not respond to investor and public concerns, politicians and others may question and seek to change governance arrangements. In a speech in Birmingham before becoming UK Prime Minister, Theresa May said: “I want to see changes in the way that big business is governed. The people who run big businesses are supposed to be accountable to outsiders, to non-executive directors, who are supposed to ask the difficult questions, think about the long-term and defend the interests of shareholders. In practice, they are drawn from the same, narrow social and professional circles as the executive team and – as we have seen time and time again – the scrutiny they provide is just not good enough. So if I’m Prime Minister, we’re going to change that system – and we’re going to have not just consumers represented on company boards, but employees as well. ”

As Home Secretary Theresa May attended, spoke and presented Golden Peacock Awards at IOD India’s London Global Convention. After discussing excessive executive pay and individual and corporate tax avoidance during her speech in Birmingham she concluded: “It is not anti-business to suggest that big business needs to change. Better governance will help these companies to take better decisions, for their own long-term benefit and that of the economy overall. ”

What should “better governance” look like? Will independent directors challenge governance practices? Are they on boards just because of legal, listing or code of practice requirements? Will they come to be regarded as more or less valuable? Might the mood shift to making arrangements for independent and objective advice to be sought whenever important board decisions have to be taken? Much will depend upon the extent to which independent and executive directors understand each others role, duties and distinct perspectives and contributions.

Board Committees and Structures

What will happen to board committees? Where time allows, reference of a matter to the relevant committee can enable a fuller discussion than might be possible with a crowded main board agenda. On the other hand, referral can result in a matter being deferred until a committee reports back. Care needs to be taken to ensure that directors do not abrogate their ultimate responsibility and become too reliant upon sub-sets of directors who attend particular committee meetings.

Many boards only establish the committees prescribed in law or a corporate governance code. Would these be justifiable if such requirements did not exist? What other committees might be helpful? Would a committees, perhaps set up on an ad hoc basis to review a strategy or establish policy in new areas, allow time for a wider range of inputs to be sought?

What about sustainability, or the investigation of an issue on which viewpoints might differ and there is much evidence to examine and/or stakeholder views to canvas, such as whether or not to de-merge or move a corporate headquarters or registered office? Is this a matter for executive management or a single expert to advise on, or should a group of directors consider options?

Remuneration Committees and Executive Pay

Have remuneration committees and the boards they advise been particularly weak, unadventurous and unimaginative in the area of executive pay? Have they employed policies and approaches such as “paying in the top quartile to attract the best talent “ that automatically ratchet up average levels of remuneration? Going with the flow and failing to challenge has not gone unnoticed.

In her Birmingham speech, Theresa May has also pointed out “The FTSE, for example, is trading at about the same level as it was eighteen years ago and it is nearly ten per cent below its high peak. Yet in the same time period executive pay has more than trebled and there is an irrational, unhealthy and growing gap between what these companies pay their workers and what they pay their bosses. ”

The incoming UK Prime Minister concluded: “I want to make shareholder votes on corporate pay not just advisory but binding. I want to see more transparency, including the full disclosure of bonus targets and the publication of “pay multiple” data: that is, the ratio between the CEO’s pay and the average company worker’s pay. And I want to simplify the way bonuses are paid so that the bosses’ incentives are better aligned with the long-term interests of the company and its shareholders. ”

Such calls could lead to other suggestions relating to reporting and disclosure requirements, depending upon perceptions of purpose and priorities. For example, in relation to sustainability, should companies be required to report steps they are taking in areas such as emissions limits on company cars and other vehicles?

Widening Perspectives and Regulation

Current approaches to corporate governance assume accountability to shareholders. Compliance, “command and control”, onerous reporting and associated bureaucracy can inhibit initiative, reduce spontaneous adaptation and involve significant costs. As barriers to entry and capital requirements fall, and developments are funded by customers, will companies redefine their purpose? Will the perspectives of directors embrace a wider range of interests? What might governance look like if one replaced or supplemented shareholders with customers, employees or business partners?

Governance arrangements need to ensure a board understands the market and regulatory context in which it operates and takes a longer-term view. Given the earth’s resources are not infinite and that the consequences of human activity threaten its restorative capacity, should the perspective of governance and boards embrace the planet as a whole? Do attitudes in boardrooms need to change?

There are costs and risks of unintended consequences associated with much regulation, but in relation to the environment and sustainability is such action required? If directors were more engaged in the process, might the effectiveness of some regulations be increased and their costs reduced? Those directly affected by regulations often act to protect their interests. Could involving a wider range of voices counter this, reduce barriers to entry and create both a level playing field and opportunities for entrepreneurs to introduce more sustainable offerings and practices?

Purpose and Sustainability

Boards should ensure that people can relate to the purpose of a company. Vision and mission statements should be more than generalities about being the best. They should have meaning for employees, customers, investors other stakeholders. Some leaders turn their organisations into a cause that motivates others. A clear and shared purpose should guide decisions and drive operations. Does sustainability engage people and align individual and corporate purpose?

Sustainability is a challenge for governance arrangements. A succession of decisions that take account of immediate priorities and short-term considerations, while ignoring externalities and longer-term impacts can have serious future implications. Action to address the negative consequences of individual decisions can take many forms, from outright bans of harmful activities to collective action to address resulting outcomes. What role could governance codes and practices play as alternatives to legal and regulatory responses? Could pricing emissions address social costs?

Directors are sometimes schizophrenic. They want to avoid certain climate change consequences and natural capital shortages, but without being at a short-term competitive disadvantage. Hence calls for level playing fields. In the meantime, cosmetic rather than substantive initiatives may be pursued. Some boards make hay while the sun shines. Tough decisions are postponed until external pressures build and/or legal or regulatory intervention occurs. Could institutional investors and owning families do more to encourage boards to adopt a longer-term perspective?

In relation to sustainability decisions, what should be sustained and when? Those advantaged by the status quo usually favour its continuation. Those left behind may want to catch up before reigning back. Is resilience becoming more important, along with the ability to cope with changes as they occur and maintain essential services? Directors who see the bigger picture and can link different considerations may detect a relationship between innovation, entrepreneurship and sustainability.

Public Policy Intervention

Peter Drucker suggested that human institutions can outlive their original purpose as situations, circumstances, perspectives, requirements and priorities alter and can imperceptibly change from being a solution to a pressing problem to become a new obstacle to progress. To what extent does his advocacy of innovation and entrepreneurship apply to corporate governance and sustainability?

Has Government intervention in the form of legislation and regulatory requirements facilitated or inhibited innovation and entrepreneurship? Where they occur is this in spite of public policy rather than because of it? Has regulation created a community of advisers with a vested interest in ever more detailed intervention because their livelihoods depend upon it?

In an era of greater diversity and uncertainty, alternative business and organisational models, and new ways of working and operating, is a prescriptive approach, the use of single standards and a compliance bias out of sync with such changes? Are they resulting in tick-box and legalistic attitudes, rather than a focus on outcomes and allowing more scope for imagination and innovation in terms of how they are achieved? How might more flexibility be introduced?

Will an excess of regulation, requests for more information and disclosure and greater media scrutiny discourage people from seeking CEO and senior executive roles? Will greater exposure to scrutiny and enhanced risk of investigatory and legal action put more people off seeking board positions? At the same time, the emerging crowd-based economy depends upon trust. Who and what will protect the consumer when peer-to-peer services disappoint or result in harm?

Passing the Innovation Test

Many boards do little to actively encourage innovation and entrepreneurship. In established companies their focus is often upon consolidation, rationalisation, cost-cutting and squeezing more out of existing operations. Corporate cash is disbursed as dividends or used to buy-back shares rather than invest in new industries. The emphasis is often upon keeping an existing show on the road and avoiding failure rather than creating a better alternative.

Are some big company bosses leaving innovation to sole entrepreneurs, family businesses or smaller enterprises who are less influenced or constrained by corporate governance considerations. Is corporate governance largely a set of arrangements for dealing with maturity, stagnation and slow decline? Is it a retirement home for when founding entrepreneurs and companies run out of steam?

Must creative spirits in T-shirts be replaced by cautious retainers in suits? If corporate governance attitudes and advisers are introduced too early, might the cold draft of compliance snuff out the sparks of innovation? Will more companies seek to avoid such negative associations by de-listing? Would innovation and entrepreneurship be best served by avoiding a standard model developed for a different context, and instead adopting bespoke governance arrangements that are right for an enterprises stage of development and particular situation and circumstances?

Emerging Realities and Requirements

The innovative responses a sustainable future requires thrive on diversity. Hermann Simon has found that market leaders in niche specialisms are often not large and/or listed. Many of them are family owned and keep a low profile. Although based outside of major cities they often trade internationally. They engender customer and staff loyalty. They work hard to remain innovative and competitive in their chosen field. They are managed and governed in a way that works for them and allows them to excel at what they do.

Digital developments present businesses with a variety of challenges and opportunities. What role will directors and boards play in crowd-funded, web-enabled, organically evolving, creative and networked enterprises that need to adapt and mutate in real time? In more democratic and participative markets will an intermediary role of directors and boards be required? Will governance become a series of questions to address to determine what is best for a particular network at one moment in time, rather than a set of principles and rules that assume a standard requirement?

What proportion of assets and economic activity will be in the hands of large companies owned by external shareholders? Will more of the corporations for which corporate governance has evolved be cut out as people directly barter and share what they have, whether empty space or home grown vegetables? Will those living healthy lives for longer, become more self-sufficient and help each other within their communities rather than depend upon the state or a weekly shop at the nearest supermarket? How successful will our directors be at acquiring a trade or skills others might want?

In a connected world, self-employed individuals may use networks of relationships to access what they need and do what they enjoy and feel they are good at. They may find their individual ability to quickly adjust, embrace new technologies and re-learn or embrace new opportunities exceeds that of less flexible centrally controlled groups that have to await a new policy or direction from a board before they can change. Will entrepreneurial people become their own directors, rather than expect someone else to undertake directorial activities on their behalf? Will they govern themselves?

*Author
Prof. Colin Coulson-Thomas holds a portfolio of board and leadership roles, is IOD India’s Director-General, UK and Europe, and has advised directors and boards in over 40 countries.

Further Information: The 16th London Global Convention on Corporate Governance and Sustainability of the Institute of Directors, India will be held in London from 17th to 19th October 2016. Following a Global Business Meet at the House of Lords on the first day, the conference element of the convention and the presentation of Golden Peacock Awards will be held at the Millennium Hotel in Grosvenor Square and the last evening will be hosted by ICAE&W at Chartered Accountants Hall.. Further details of the convention and other activities of the Institute of Directors are available from www.iodonline.com. This theme paper was published by IOD India in Director Today (Vol. II Issue VIlI, August 2016, pp 41-45) and is also available from: http://www.iodonline.com/images/lgc2016/theme-paper.pdf.

 

22 Aug 2016
Colin Coulson-Thomas

Today’s urban rich could become tomorrow’s quality of life poor

Rural poor could replace rich city dwellers as the new lifestyle elite according to a theme paper for the 2016 World Congress on Environment Management

Could the life chances of rich and poor be reversed? While a new quality of life poor composed of lonely urban dwellers trapped in high-rise apartments look down at the life-shortening pollution of congested and dangerous cities, will rural dwellers revel in being close to nature and valued members of vibrant and connected communities, living longer, healthier, simpler and less materialistic but more fulfilling lives? The theme paper for the 18th World Congress on Environment Management by Adaptation’s chairman Colin Coulson-Thomas questions whether today’s poor could become tomorrow’s quality of life rich.

Will displays of material wealth such as expensive and fuel-guzzling fast cars will come to be seen as evidence of shallow self-obsession, concern with superficial appearance and ignorance of environmental issues? Could the manufacture and use of some products be considered a “crime against the environment”? Will business leaders have the courage to exercise restraint in how they advertise and promote offerings, to reduce impulse and unnecessary purchases of items whose production and use are environmentally harmful?

We have choices. In comparison with private consumption, team sports are shared activities. Like the creative arts they can be both participative and observed or enjoyed by others. A whole community can be lifted by a winning team. Such activities have a multiplier effect. Their externalities are positive. They enrich lives. Knowledge activities build intellectual capabilities rather than consume physical resources. Entrepreneurs could both trigger the transition and also contribute to greater well being by devising innovative and affordable solutions to basic needs for sanitation facilities and fresh water, areas in which today’s rural poor are at a disadvantage.

For several months in a row average temperatures have been the highest ever recorded. Climate change challenges individuals, organisations, communities and governments. The forthcoming World Congress on Environment Management will look beyond issues and threats and consider options and opportunities. The theme paper raises questions for consumers, investors and employees, as well as directors, public officials and elected politicians. It suggests a shift of focus and imaginative responses from entrepreneurs could create new business opportunities and lead to more sustainable and affordable lifestyles.

Sustainability and environmental quality are issues for citizens, communities, cities and the businesses that operate within them. Pollution, congestion and adverse weather conditions can impact upon health, productivity and performance. A company, its people and its customers can all benefit from resilient and effective transportation, water, energy, sanitation, sewerage, rubbish collection and waste disposal services. Boards need to consider what role a company should play, either individually or collaboratively, in ensuring that essential infrastructure and public services are able to cope with climate and other changes.

Should more companies and public bodies be looking at shared services as a way of making more cost effective use of infrastructure? Bridges of Sports, a non-profit initiative to create an inclusive and sustainable sports ecosystem in India, has found that publicly funded athletics facilities in many areas are under-used. People need to be made more aware of healthier and less environmentally damaging activities. Creative arts and crafts activities can use local materials and also be fulfilling. The creative arts, leisure and sports are significant economic sectors in some countries. They present opportunities for large and small businesses and local and national enterprises.

Will our buildings be more flexible and intelligent? Will smart city initiatives lead to intelligent communities and more integrated public services? In 2015 106 new buildings over 200 metres tall were added to city skylines. How much of the space and its use is related to perpetuating current patterns of consumption and display, as opposed to simpler and healthier lifestyles, creativity and innovation? Should insecure status seekers be aiming to build the world’s smartest building rather than its tallest? Does taller just mean greater isolation and distance from the natural environment?

Personal consumption can cause significant environmental damage. Do we need to change our consumer values and priorities? Should we be less wasteful? Could more be recycled? As more people look for independence, more balance in their lives, greater personal freedom and to reduce their environmental footprint, do our activities reflect these interests and related concerns? Do our corporate strategies and priorities reflect our past rather than the aspirations of younger generations?

Should we change our expectations of business leaders? Rather than reward those who increase the production of unnecessary and disposable goods, should the giving of awards and the writing of case studies high-light the leaders who reduce physical production and the use of scarce material resources and switch the emphasis from external trappings to helping customers achieve more of a sense of inner worth? When confronted with marble entrance foyers should we ask questions about the safety of the stone cutters involved?

Directors could reduce the environmental impact of physical good production by reducing or abandoning practices such as built in obsolescence. Could more elements be replaced as they wear out or upgraded? Should boards champion sustainable product design? The new product designs of a responsible business ought to be ethical and sustainable as well as profitable. How might a new design benefit other species such as birds and bats? Could engaging with the public and providing them with ways of increasing biodiversity represent a new business opportunity for garden centres?

Championing fulfilling activities rather than physical consumption could lead to new commercial opportunities. Whereas the production of goods might increasingly be undertaken by factory robots or local 3D printers, a shift of emphasis to creative endeavours, sport and keep fit activities could create opportunities for those who might otherwise be marginalised or made redundant to offer one-to-one personal services, engage in communal activities and experience a higher quality of life.

These comments are selected from a theme paper prepared by Colin Coulson-Thomas for the 18th World Congress on Environment Management. It is taking place in New Delhi on 8th and 9th of July 2016. Full details of the conference and the theme paper can be obtained from The Institute of Directors of India’s website http://www.iodonline.com/wcem-2016.html.

Prof. Colin Coulson-Thomas’ is Chairman of Adaptation. His other roles include leadership of the International Governance Initiative of the Order of St Lazarus, Chancellor of the School for the Creative Arts and Director-General, IOD India, UK and Europe. He has helped directors in over 40 countries to improve board and corporate performance and is the author of over 60 books and reports. Those on more affordable and sustainable routes to high performance organisations can be obtained from: http://www.policypublications.com/.

 

27 May 2016
Colin Coulson-Thomas

World Congress to Address Corporate Responses to Climate Change Issues

For several months in a row average temperatures have been the highest ever recorded. Climate change challenges individuals, organisations, communities and governments. The 18th World Congress on Environment Management will look beyond issues and threats and consider options and opportunities. A theme paper for the event by Adaptation’s chairman Colin Coulson-Thomas raises questions for consumers, investors and employees, as well as directors, public officials and elected politicians. It suggests a shift of focus and imaginative responses from entrepreneurs could create new business opportunities and lead to more sustainable and affordable lifestyles.

Sustainability and environmental quality are issues for citizens, communities, cities and the businesses that operate within them. Pollution, congestion and adverse weather conditions can impact upon health, productivity and performance. A company, its people and its customers can all benefit from resilient and effective transportation, water, energy, sanitation, sewerage, rubbish collection and waste disposal services. Boards need to consider what role a company should play, either individually or collaboratively, in ensuring that essential infrastructure and public services are able to cope with climate and other changes.

Is a more integrated approach needed? Issues relating to food, water, energy and the environment impact upon each other, and can no longer be considered in isolation. Should more companies and public bodies be looking at shared services as a way of making more cost effective use of infrastructure? Bridges of Sports, a non-profit initiative to create an inclusive and sustainable sports ecosystem in India, has found that publicly funded athletics facilities in many areas are under-used. What should companies and other bodies do to make people more aware of healthier and less environmentally damaging activities? Bridges of Sports is calling for increased awareness and provision. Creative arts and crafts activities can use local materials and also be fulfilling.

Directors need to be aware of developments occurring in the social, physical and market environment and alert to ways of taking advantage of them. Will our and other buildings be more flexible and intelligent? What do smart city initiatives mean for businesses? Will they lead to intelligent communities and the delivery of more integrated public services? In 2015 106 new buildings over 200 metres tall were added to city skylines. The location and use of such space reveals much about the priorities of planners and developers. How much of the space and its use is related to perpetuating current patterns of consumption and display, as opposed to simpler and healthier lifestyles or the encouragement of entrepreneurship, creativity and innovation? Should insecure status seekers be aiming to build the world’s smartest building rather than its tallest? Does taller just mean greater isolation and distance from the natural environment?

Personal consumption patterns cause significant environmental damage. Do we need to change our consumer values and priorities to confront the difficult challenges and choices that we now face? Should we be less wasteful? Could more be recycled? Are more people looking for independence and balance in their lives, greater personal freedom and opportunities to reduce their environmental footprint? Do our activities reflect these interests and related concerns? Do our corporate strategies and priorities reflect our past rather than the aspirations of younger generations?

As consumers and investors should we give a lead by also changing our expectations of business leaders? Rather than reward those who increase the production of unnecessary and disposable goods, should the giving of awards and the writing of case studies high-light the leaders who reduce physical production and the use of scarce material resources and switch the emphasis from external trappings to helping customers achieve more of a sense of inner worth? When confronted with marble entrance foyers should we ask questions about the safety of the stone cutters involved?

Directors could reduce the environmental impact of physical good production be reducing or abandoning practices such as built in obsolescence. Could more elements be replaced as they wear out or upgraded? Should boards champion sustainable product design? The new product designs of a responsible business ought to be ethical and sustainable as well as profitable. How might a new design benefit other species such as birds and bats? Could engaging with the public and providing them with ways of increasing biodiversity represent a new business opportunity for garden centres?

Should we champion fulfilling activities rather than physical consumption? Whereas the production of goods might increasingly be undertaken by factory robots or local 3D printers, a shift of emphasis to creative endeavours, sport and keep fit activities could create opportunities for those who might otherwise be marginalised or made redundant to offer one-to-one personal services, engage in communal activities and experience a higher quality of life.

Will displays of material wealth such as expensive and fuel-guzzling fast cars come to be seen as evidence of shallow self-obsession, concern with superficial appearance and ignorance of environmental issues? Could the manufacture and use of some products be considered a “crime against the environment”? Will business leaders have the courage to exercise restraint in how they advertise and promote offerings, to reduce impulse and unnecessary purchases of items whose production and use are environmentally harmful? In comparison, team sports are shared activities. Like the creative arts they can be both participative and observed or enjoyed by others. A whole community can be lifted by a winning team. Such activities have a multiplier effect. Their externalities are positive. They enrich lives. Knowledge activities build intellectual capabilities rather than consume physical resources.

Could one envision an inversion of life chances? While a new quality of life poor composed of lonely urban dwellers trapped in high-rise apartments look down at the life-shortening pollution of congested and dangerous cities, will rural dwellers revel in being close to nature and valued members of vibrant and connected communities, living longer, healthier, simpler and less materialistic but more fulfilling lives? We have choices. Entrepreneurs could both trigger the transition and also contribute to greater well being by devising innovative and affordable solutions to basic needs for sanitation facilities and fresh water.

The 18th World Congress on Environment Management provides a forum for discussing options. How might we best internalise external costs? How do we ensure corporate and political strategies are aligned? What individual and collective action could customers and investors take to bring about desired changes? What role should professionals, banks and insurance companies play? How might cities contribute more to global discussions? Do we replace markets or work with them? Could a barter economy, including the exchanges of time, replace or complement a monetary one?

These comments are taken from a theme paper prepared by Prof. Colin Coulson-Thomas for India’s Institute of Directors Annual Convention and 18th World Congress on Environment Management. It is taking place in New Delhi on 8th and 9th of July 2016. Full details of the conference can be obtained from http://www.iodonline.com/wcem-2016.html. The theme paper is accessible on The Institute of Director’s website from: http://www.iodonline.com/images/wcem2016/wcem-2016-theme-paper.pdf. Further information on Bridges of Sports can be obtained from: http://www.bridgesofsports.com/.

In addition to advising boards and his board appointments Prof. Colin Coulson-Thomas leads the International Governance Initiative of the Order of St Lazarus, is Chancellor of the School
for the Creative Arts, Director-General, IOD India, UK and Europe Operations and chair of the Audit
and Risk Committee of United Learning. He has helped directors in over 40 countries to improve board and corporate performance. Author of over 60 books and reports he has held professorial appointments
in Europe, North and South America, Africa, the Middle East, India and China. Colin was educated
at the London School of Economics, London Business School, UNISA and the Universities of
Aston, Chicago and Southern California, and is a fellow of seven chartered bodies. His recent books and reports on quicker and more affordable and sustainable routes to high performance organisations can be obtained from: http://www.policypublications.com/.

 

27 May 2016
Colin Coulson-Thomas