| DEALING WITH BOARDROOM DILEMMAS |
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Progress takes place through people’s convictions and contact with each other Management Review Business Day 22 October 2007 Jonathan Yudelowitz THE CONTROVERSY SURROUNDING the new SABC board begs the question: what makes a successful board? Boards ensure good governance. They are accountable, on the one hand, for managing the dilemmas and tensions indispensable for executives to function and progress. On the other, they are responsible for the politics, economics and environment that ensure a corporation meets its mandate. Risk-taking and learning from mistakes are essential to organisational effectiveness and renewal, and vital to capitalism. However, current governance thinking intimates that creative freedom and risk-taking are inimical to good governance and that strong relationships between executives and non-executives lead to corruption. This suggests that enforcement of rules and codes and expert policing of executive decision making will result in perpetrators of corporate corruption being caught and unethical practices stopped. More often than not, the culture and not the individual is at fault. Individuals must be held accountable for their actions, but blaming them instead of dealing with the complexities of an issue will only promote defensiveness in the risk-takers and those that made mistakes. It is the greedy and manipulators of the system who should be targeted. The management myth that anyone in charge should be a charismatic driver results in board members being in performance mode instead of being honest, listening to and respecting one another. This attitude and behaviour deepens the dilemma by forcing politically correct compliance and an obsession with achievement. Mistakes and vulnerabilities are hidden, rather than learnt from. The chairman is responsible for helping board members see the merits and limitations of their opinions. He should ensure that executives are trusted and held in check, and that value is created and solutions found. This enables conversations between board members in which ideas are explored, trade-offs are made and discourse is authentic, relevant and clear. If leadership is to ensure that organisations continue to learn, grow and achieve results, it must resolve fundamental tensions between theory, idea and practical application. This is especially important for parastatals. They present a particularly vexing set of governance dilemmas, needing to resolve national, political and commercial imperatives. The SABC board has to contend with the creative imperative too, presenting an acute governance dilemma. Where is the solution to be found? The complex art of applying imagination and concept to practical situations demands a deep, current, nuanced understanding of an organisation and the industry in which it operates, accompanied by robust debate. Arrogant board members who lack an appreciation of the complexity of running an organisation like the SABC, who are over-invested in a need to look good and be right, are likely to simplify issues as purist or ideological rights and wrongs. Bending an organisation to ideological imperatives is always dangerous, but particularly so in a parastatal that should be a national asset serving the population. Ideology generalises reality into shallow knowledge, preventing board members learning from their own and other’s experiences. At present, parastatal boards are reconstituted after three or five years, just when they have learnt to collaborate. They have developed the relationships and trust that allows them to hold executive and non-executive directors accountable, and they have an understanding and appreciation one another’s feedback. If any position or solution were universally right, a dilemma would be dealt with before reaching the board. But dilemmas are resolved by understanding how personal values are affected by each side of the dilemma. The parties must apply conscience and judicious choice about what to do – not forever – but for a particular set of circumstances, being conscious of precedents and long-term implications at the same time. The key is this: does the individual or the board collectively has the maturity to learn “on the hoof” from their mistakes and failures? Engaging with a dilemma means advocating your standpoint and listening to everyone else’s until all those present understand what it’s like to be on each side of the conflict. That way issues, not people, are addressed. This essence of neutrality is crucial to good governance. Some of an organisation’s best ideas are never implemented, while some of its most flawed ideas are. Experts pretend that through analysis of facts we can know the future. They ignore the fact that our feelings – evoked, but not controlled, by rules, reports and presentations – foreshadow the unknown. Successful formulation and implementation of strategy involves the interplay of scepticism, conviction, hope and doubt that propels thoughts into strategies and tactics, turns theme into action, and allows one to learn from experience. Challenging the expert, revealing one’s concern and confusion to a rival, and holding a subjective opinion whether politically correct or not, distinguishes good governance from bad. The digital age has devalued the importance of reflection and conversation. When dealing with complexity, video conferencing and e-mail cannot replace human contact. The SABC and other parastatals should create the time, space and competence necessary for reflection and conversation around complex dilemmas. South Africa has paid the price for dogma and arrogance on all sides of the struggle. Our progress is due to people’s convictions and contact with each other. These lessons should challenge the current paradigm of corporate governance thinking. |
