Eldon-Online

The Role of the Board ... or Whose Future Is It Anyway?

The responsibilities facing Boards of Directors today are really very different from what they were years ago, and rightly so. Mostly gone, but not entirely, are the "old boy" networks of good friends of the company Chairman. The short meeting and long lunch brigade where business was concluded on a nod and a wink, and where the meeting minutes were passed around for approval immediately after the meeting. I kid you not on the last one. I sat, very briefly, on a Board where that actually happened.

Of course there are benefits, outside the "old boy" syndrome, of having people on a Board that you can work with, which is why a number of Boards today consist of people with more than just a passing acquaintance to one another. Indeed I have contributed to it myself, by recommending to a company Chairman the name of someone I know who I believe would make an excellent Board Member. Although I will only consider recommending people who, if selected, would not cause me any embarrassment by their inability to perform. 

The changes and improvements are welcome, but change is dynamic not static. Our modern world is one of constant evolution and innovation. Businesses compete more aggressively to cater to the needs and indeed demands of their customers or clients, whichever term you prefer to use. Boards of Directors cannot be immune to change and must also constantly renew, review, and be trained in the latest trends and practices, particularly in technology.

Over a number of years now I have been involved with Boards, initially as a presenter to them and later as a Board member myself. In all cases I am conscious of the fact that I am usually surrounded by a bunch of people who bring to their Boards an absolute wealth of knowledge, experience and common sense, acquired through years of practice. But that sense of consciousness also extends to the fact that as Boards we are being asked to take decisions and give our blessing to schemes that are going affect a different generation than ours. In other words here we are, a bunch of 50, 60 and 70 year olds (well not yet the latter in my case, of course), with our vast array of historic knowledge, approving proposals that are not likely to have an impact on us but will impact on future generations of staff, clients, shareholders and communities in general.

Those decisions, for many businesses today, involve the use of technology as a key ingredient. Although happily I don't think it applies to anyone on the Boards with which I am involved, I am aware of and get irritated by those Directors who take some sort of pride in saying they don't understand this "new fangled" stuff and worse, have no intention of learning about it. Frankly, if you don't want to use it fine, but at least try and understand it. 

By all of this I am not suggesting for one minute that Boards have had their day; far from it indeed, but it is the composition of the modern day Board that interests me more. I think we need more creativity, more innovation and a voice from people who are going to be affected by the decisions taken at Board level - eventually probably through a responsibility for successful implementation of various decisions.

Boards have had to be forced in many companies to change due to regulation, and a need to be at least appearing to do the right thing. Lip service was a hiding place for a while, but no longer. Gender, racial, geographic and many other diversities frequently appear in corporate brochures and Board reports, although the evidence of success remains distinctly underwhelming. And if the Board is supposed to set the tone, then progress is generally glacial - and yes, I am being general. There are, as always, some market leading exceptions.

The next area that I believe we should develop now is room for young talent in the boardroom. For those technologically challenged older directors with grandchildren, find out what's going on in the real virtual world, by speaking to an eight year old! You'll soon find out what it is they are focusing on for their future lives. You think Facebook is some new thing that you don't understand? Don't worry - you don't have to be concerned because it's already becoming passé for a certain generation. Want to know about Instagram, Twitter and Pinterest (now overtaken Twitter in the USA), and Snapchat, speak to a teenager.

This is a fast developing area and whether you think so or not yourself, I am afraid you need to know how your company can use the social networks - actually must use the social networks, to get messages out to your client base so that damage limitation on negative news reports can be achieved. If you don't, the media and public interest will get you. And while you can of course get experts to come and and talk to the Board about these things, it is no substitute for having someone there with relevant expertise. 

Board Meetings today are becoming very regulatory process driven affairs. But the profitable strategic direction of a company must still be a key focus. Boards today often include representatives from the fields of accounting and the legal profession to share their wisdom and give an informed opinion. Therefore, in the attainment of broadening the accumulated wisdom of our Boards we need a boost from the technologically savvy younger generation with the appropriate skills for the future. I would suggest this is a new priority.

Bad, Mad, Sad - All Three ... Or Are We Missing Something?

Are we missing something here? It's North Korea on my mind again and I'm back to scratching my head over L'il Kim!

Let's face it, when his Dad died many of us thought given the young man's alleged lack of formal education, and an entrenched, serially indoctrinated military with no particular desire to change things, that he might not last too long. Sufficiently unskilled in the dark arts of subterfuge he may fall victim perhaps of a "general" coup or some unfortunate but conveniently  fatal "illness". Well, he's defied those particular pundits so far, which led me to thinking - which as we know is always a dangerous character flaw, especially for a banker.

Uncle Jang Song Thaek, widely perceived as Kim's adviser and right hand man, was not generally seen as a reformer. One suspects he could be uncharitably disposed towards his 20s something relative and with that in mind, well placed to plot a future path for him and his friends that would exclude young Kim. Indeed about a quarter of the way through last year there were reports suggesting that the Dear Successor was the target of an assassination attempt.  

What chance then that after some "investigation", that Uncle Jang found himself not in the position of influence and power he sought, but suddenly was like a rabbit in the headlights. Result? Execution! And anybody close to Uncle - family members in particular also executed, it seems, thereby obliterating any relatives who might be holding a grudge.

Whatever rumours are coming from North Korea as to the circumstances of the instruction to execute, they would suggest that L'il Kim had in fact outwitted the old guard. Whether or not ordered in a moment of instability, alcohol-induced (in vino veritas) or otherwise, decided that he had to make an example of someone. Sending a message that would work very quickly to deter other like-minded plotters. A variation on the story of Hercules and the Hydra; cut off the one head and immediately prevent all the others from growing back. Perhaps the Leader had a classical education after all! 

The story so far? Clearly, if you go round killing people that's Bad! If you do it in a fit of uncontrollable rage and then compound it when you have calmed down by killing off other people, one has to suggest Mad! And Sad?

I think the boy is sad. He has been out of Korea; Switzerland at least and who knows elsewhere. He has a brother who frequents haunts in Macau, and who I am sure has some stories to tell. He is a fan of Disneyland. He loves basketball. He is said to like Eric Clapton and other Western performers - and where is he? Stuck in an increasingly isolated hole, particularly as China gets fed up with his antics - and indeed those of the whole regime. He makes friends with Denis Rodman that becomes high profile - and speaking personally I think there's a whole new story there and possibly some missed opportunities. If he has his wits about him, which it seems he might have more of than previously given credit for, he will be well aware that he could lead North Korea for the next 50 years. Does he, in his heart of hearts, really think he can keep the "lid" on the country for that length of time without his family's misdeeds being discovered? And as I have said before in these Blogs, if I were he, I would either want to find a way to get out with my life - or be the Kim who took his people off the poverty line and into the 21st century.

Unfortunately, for him, I would bet he won't get old either gracefully or disgracefully! I don't think he'll make it. But I do wonder whether, in all the speculation about his motives and the fear he instills in the rest of the world by his potential to do something really silly, that there is a worried young man who is actually saying, "I want change". He has potentially removed one of the obstacles to change, and ensured that any potential followers down that path will keep well out of his way lest they suffer the same fate.

He has already lined up a potential link to the outside world - albeit a rather strange one, and like a person contemplating suicide could it be that he is looking for a route to The Samaritans? Okay, so he may be going about it in a rather strange way, but he's a rather strange person from a rather strange country, and I am sure there will be many out there who will not agree with my musings, but could we actually be missing a cry for help?