1 min
131. Am I ignoring all the rules? One Minute Governance
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- Management
One valid criticism of my positions on corporate governance is that I don't really pay much attention to the rules. Or to ethics or morality, to be honest. Does that matter?
SCRIPT
My positions regarding corporate governance, and especially GOOD governance leave me vulnerable to a great deal of valid criticism. If you’re not familiar with those positions, have a listen to episodes 2 and 102 respectively. The main criticism goes something like this: corporate governance is itself governed by important rules, like laws and regulations, that are there to try to keep organizational leaders from doing bad and unethical things – either on purpose or by accident. Furthermore, those rules will never be sufficient on their own to completely eliminate bad or unethical behaviour. Since my definitions of corporate governance generally and good governance specifically don’t address legal, moral, or ethical judgment, am I not failing to acknowledge or address the most fundamental objective of organizational decision making: not to do objectively bad stuff? There’s a less philosophical version of this same argument that I encounter frequently, which is “how can I expect individual leaders or groups like boards of directors to figure out how to create the conditions for effective decision-making on their own?” In other words, isn’t it important to establish rules for organizations to follow on their way to good governance? I have repeatedly said on OMG that I reject a box-ticking approach to corporate governance, and I don’t like the concept of “best” practice, but…I dunno, what do you think? Am I missing something here?
One valid criticism of my positions on corporate governance is that I don't really pay much attention to the rules. Or to ethics or morality, to be honest. Does that matter?
SCRIPT
My positions regarding corporate governance, and especially GOOD governance leave me vulnerable to a great deal of valid criticism. If you’re not familiar with those positions, have a listen to episodes 2 and 102 respectively. The main criticism goes something like this: corporate governance is itself governed by important rules, like laws and regulations, that are there to try to keep organizational leaders from doing bad and unethical things – either on purpose or by accident. Furthermore, those rules will never be sufficient on their own to completely eliminate bad or unethical behaviour. Since my definitions of corporate governance generally and good governance specifically don’t address legal, moral, or ethical judgment, am I not failing to acknowledge or address the most fundamental objective of organizational decision making: not to do objectively bad stuff? There’s a less philosophical version of this same argument that I encounter frequently, which is “how can I expect individual leaders or groups like boards of directors to figure out how to create the conditions for effective decision-making on their own?” In other words, isn’t it important to establish rules for organizations to follow on their way to good governance? I have repeatedly said on OMG that I reject a box-ticking approach to corporate governance, and I don’t like the concept of “best” practice, but…I dunno, what do you think? Am I missing something here?
1 min