This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Black Box Governance Thinking

Yet another board blows up. Why does this happen time and time again? The problem, in my experience, is one of boardroom culture.  With some directors being so set in their ways, they are unable to learn from their mistakes. These issues are brilliantly explained by Matthew Syed in his book, Black Box Thinking.

Syed explains why Most People Never Learn from Their Mistakes–But Some Do. Nobody wants to fail. But in highly complex organisations, success can happen only when we confront our mistakes. ‘The basic proposition of this book,’ says Syed, ‘is that we have an allergic attitude to failure. We try to avoid it, cover it up and airbrush it out of our lives.’

And looking from the outside, this is my guess at what has happened at the IoD. The snippets of the leaked report I have read suggest that no consideration was given to the context of Lady Judge’s remarks. What has been reported sounds awful, but the board report, written by ‘independent’ lawyers, is reported not to have revealed the context.

Michael Syed’s book explains that many situations in business (and this IoD case is one of those) are complex and not readily analysed without proper and thoughtful analysis. None of us know what was actually said and in relation to what; a full transcript of the conversations, indeed all the allegations, needs to be read to get the full context.

A good board should have been able to work through the issues and sort them out. Resorting to open warfare, digging trenches and lobbing grenades and worse at each other is what happened in the First World War, before women got the vote.

The outcome will doubtless be a tragedy for the IoD, which has, with the support of Ken Olisa, been trying to raise the profile of good governance through its report on FTSE 100 Good Governance. Many members will vote with their feet and not renew their membership. Income will drop and services will have to be curtailed. History, and Syed’s book, says it is unlikely that the IoD board comes to its senses.

Further Reading – Barbara Judge accuses Institute of Directors of smearing her

Cliff Weight
Director – ShareSoc

One comment
  1. Weight Cliff says:

    Post Office is another example of Black Box Thinkimg.

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