Values – how do you define them, let alone gauge their presence from an initial meeting? Moral, honest, wise… they all sound like good things; they all are good things. The difficulties kick in when you have to appoint people, or give them responsibility, based on their perceived values. How do you work out what theirs are? Are they the same as your own, one step better, or totally different and good counterbalance?
Values are huge issue for directors. With the spotlight increasingly on corporate governance, the values of those charged with responsibility for the oversight are coming under fire.
I don’t know what they put on the job description for directors (come to think of it, I’ve rarely seen position advertised but that’s another issue), but I’m confident they don’t say candidates should be honest, moral and sensible. Those qualities are expected to be inherent.
Which is where the problem lies: in the evidence (mainly from overseas thankfully in examples like Enron) that these things are not automatic.
Each director has individual values, which make them act or react in certain ways. Different ways. Not better or worse (on the whole) but certainly different. And these different actions have different consequences for the stakeholders of the organisations the directors are governing.
So how do you judge what values are necessary, whether they are present and whether they will hold up in crisis?
At the risk of going down the legislative path (and being more concerned with ticking boxes than strategising), values can’t be prescribed, they are subjective. Perhaps this is why the old boys’ network has flourished – comfort among members with shared values. It happens outside work as well, we tend to surround ourselves with people of like mind, or at least like morals.
Tightening the laws that govern bad behaviour goes some way toward curbing it. But ensuring those around the board table are driven by personal values of the highest order is surely more effective.
With more and more focus falling on issues of governance, we are pleased to announce that next year we will be publishing The Director alongside NZ Management five times. Starting in February, The Director will appear also in April, June, August and October and keep you informed of the latest debates in corporate governance.
