The article in the Financial Times titled ‘ Innovation is all about the customer ‘ is certainly true, but what must not be forgotten is that innovation is also all about governance.
We must remember that innovation has nothing to do with invention – most innovations are transactional, and a series of progressive steps to ensure better governance and working practices.
A fundamental block on British innovation is a governance issue: boards are delegating too much of the ‘follow-through’ or application of governance to management and in an age of austerity where cost control is king, innovation and Corporate Social Responsibility (CSR) get sidelined.
Good governance requires scrutinizing possible blockages to governance and execution all the way down the company structure, and from my experience, there seem to be three sticking points where governance, and therefore innovation and CSR, get blocked.
These sticking points [...]

We send women to war, to Afghanistan and now to Libya, as soldiers and as reporters, but we do not put them on boards. Why not? Are boards more dangerous than Libya or Afghanistan? I really doubt it. Do women need to be physically fitter for the board? I doubt that too. There is no need for endurance tests on the board, and it is no more dangerous than any combat zone where we send women. Women are just as capable of being on boards as men, but the argument needs to be exactly this—one of capabilities, not one of gender.
While many studies suggest that having women on a board can increase share value, as discussed in the recent Financial Times article, “ Women at top lift shares, study shows ” by Masa Serdarevic, there are just as many studies that show that shares drop when [...]

The one type of diversity that boards have continuously neglected is this skill and experience necessary to become a high performing board member.  If we take the board directors of FTSE 100 companies, every one of them has been a corporate centre director either currently or previously.
It is becoming a greater requirement that you cannot be a board member until you have had corporate centre director experience. Boards show reluctance to break from this fundamental assumption. A recent article in ABC’s The Drum , by Paula Matthewson, titled “Boards need diversity, not necessarily women” , observes that boards could benefit from searching for candidates with a broader range of skills and experience, inpependent of their gender.  Matthewson then implies that women have the potential to meet some of these selection criteria better than men. Unfortunately, today we see boards taking one demographic, women, and [...]

In this podcast, I discuss a recent article that appeared in Yale Alumni Magazine recommending six ways to give shareholders greater rights. Some of these suggestions are great, but others (such as term limits for independent directors) I wouldn’t recommend.
[Audio clip: view full post to listen]

Conventional wisdom is that new CEOs need to boost earnings per share in two years or they’re out. However recent findings from Booz & Company’s latest CEO Turnover report seem to suggest otherwise. Dismissals are happening, but they’re more often caused by board infighting rather than poor CEO performance. Using ten years of data they had collected, researchers Per-Ola Karlsson, Gary L. Neilson, and Juan Carlos Webster found:
For all CEOs, the likelihood of being dismissed for poor performance in a given year is only 2.1 percent. Given this data, it is not surprising that the correlation between stock performance and dismissal is generally not significant. Indeed, the very worst-performing chief executives – those in the bottom decile, whose companies’ two-year stock price had fallen by 25 percent in absolute terms and whose companies had under­performed their regional industry peers by 45 percent – [...]

This article in VentureBeat highlights an all too common scenario: CEOs dreading board meetings and not getting anything out of them. The author, Nick Sturiale, provides some useful rules for building trust with boards and running effective meetings. One is to use the board to help solve problems:
The best boards develop a common insight around the key dynamics driving the company’s business. Common understanding is achieved by providing a holistic view set of snapshots/test results on how the company is faring and not cherry-picking the easiest results to measure.
Having everyone share the same vision is key.

Earlier this month Carl Icahn started a blog  to discuss issues facing boards. Icahn has strong opinions and he doesn’t mince words:
“It is the board’s responsibility to hold a CEO accountable, and remove the CEO if he or she is not producing results. But exacting such a measure requires effort and strategic consideration, and boards are often too lazy and/or passive to rock the boat, especially since the company will continue to pay and pamper and even indemnify them under almost any circumstances. Board members receive expensive tickets to important sporting events, the theatre, and are also treated to use of the company’s fleet. Worst of all, the board itself is not made accountable because corporate board elections are generally a joke.”
Is it the board’s responsibility to hold a CEO accountable? I’d say in many cases it comes down to the [...]