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    Fid, Fads: If Cordorate Governance Is A We Need More

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    Lata Deshmukh
    The document discusses corporate governance issues surrounding Conrad Black and his business empire. It notes that Black was quoted saying corporate governance was a fad, but months later his company Hollinger International admitted it had governance problems that failed to detect conflicts of interest. The document argues that governance failures are often due to boards that do not properly govern and hold management accountable. It says that while individuals may stray, good governance depends on boards competently fulfilling their responsibilities to provide oversight, but many accepted governance practices undermine boards' ability to do so. As a result, governance remains patchwork and produces patchwork results in terms of integrity and oversight.

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    Fid, Fads: If Cordorate Governance Is A We Need More

    Uploaded by

    Lata Deshmukh
    15 views1 page
    The document discusses corporate governance issues surrounding Conrad Black and his business empire. It notes that Black was quoted saying corporate governance was a fad, but months later his company Hollinger International admitted it had governance problems that failed to detect conflicts of interest. The document argues that governance failures are often due to boards that do not properly govern and hold management accountable. It says that while individuals may stray, good governance depends on boards competently fulfilling their responsibilities to provide oversight, but many accepted governance practices undermine boards' ability to do so. As a result, governance remains patchwork and produces patchwork results in terms of integrity and oversight.

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    The document discusses corporate governance issues surrounding Conrad Black and his business empire. It notes that Black was quoted saying corporate governance was a fad, but months later his company Hollinger International admitted it had governance problems that failed to detect conflicts of interest. The document argues that governance failures are often due to boards that do not properly govern and hold management accountable. It says that while individuals may stray, good governance depends on boards competently fulfilling their responsibilities to provide oversight, but many accepted governance practices undermine boards' ability to do so. As a result, governance remains patchwork and produces patchwork results in terms of integrity and oversight.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    15 views1 page

    Fid, Fads: If Cordorate Governance Is A We Need More

    Uploaded by

    Lata Deshmukh
    The document discusses corporate governance issues surrounding Conrad Black and his business empire. It notes that Black was quoted saying corporate governance was a fad, but months later his company Hollinger International admitted it had governance problems that failed to detect conflicts of interest. The document argues that governance failures are often due to boards that do not properly govern and hold management accountable. It says that while individuals may stray, good governance depends on boards competently fulfilling their responsibilities to provide oversight, but many accepted governance practices undermine boards' ability to do so. As a result, governance remains patchwork and produces patchwork results in terms of integrity and oversight.

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    © All Rights Reserved
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    You are on page 1of 1

    Patchwork governance, patchwork integrity

    Canada

    If CorDorate Governance
    Is a Fid, We Need
    More Fads

    (continuedfrom page 4)
    Defining the purpose (or, in Carvers
    language, Ends)
    Determining appropriate limits to
    what is delegated
    Measuring achievements against the
    demands of both the Ends and the
    limits imposed in delegation

    bylohn Carver

    Y PERSONAL
    NOTEin the previous

    issue of Board Leadershipbegan


    with the following sentence: Withall the
    hype about corporate governance in
    the air over the past few years, it may
    be no wonder that media baron Conrad
    Black was quoted in the May 23,2003,
    Financial Post as saying, Like all fads,
    corporate governance has its zealots.
    Lord Conrad Black, better known to
    Canadiansthan Americans, is one of
    the worlds most affluent figures in the
    publishing business. The complexity
    and extent of his corporate holdings
    are staggering.
    With some risk of being accused
    of Schadenfreude, I am compelled
    to make note in this issue of Board
    Leadership the drama that engulfed
    Black in mid-November, only a few
    months after the quote noted above.
    The November 22 Canadian Globe
    and Mail, among a flurry of Blackrelated stories, ran the following indictment of Hollinger International, Inc.,
    part of Blacks empire: The company
    admitted yesterday it was plagued by
    a host of corporate governance problems that failed to detect possible conflicts of interest.
    I know of no one who disputes Conrad
    Blacks intelligence. Hes not only a savvy
    businessman, but a published biographer
    of Franklin D. Roosevelt. But I cannot say
    the same for persons who agree to sit as
    outside directors for any company in
    which even a brilliant person who isnt the
    100 percent owner is allowed to run things
    his or her own way. It seems that the corporate landscape continues to accumulate the litter of disintegrated companies
    due in part to governing boards that

    JAN.-FEB.

    2004

    refuse to be governingboards, rendering


    the term frighteninglyoxymoronic.
    As always, of course, the blame
    dished out in the press is heaped on
    the most obvious perpetrator of the
    bad deeds. Remember Kenneth Lay at
    Enron? But pointing a righteous finger
    at the individual-though satisfymg and
    perhaps even deserved-does little to
    make the future better. In fact, it is a
    dysfunctional way to approach the
    problem. There will always be bad
    actors, often brilliant and attractive
    ones. The idea of a board-and therefore the idea of governance of any type
    of organization, including nonprofits
    and the bodies politic-rests not on
    the unattainable perfection of every
    appointed leader but rather on the
    belief that even though individuals may
    stray, the good intentions, good faith,
    and competence of the group can act
    as the steadying keel deep in the water.
    But that works only if the group
    knows that and rises to the challenge.
    Unfortunately, many of the accepted
    norms in governance-again, corporate
    or otherwise-act against a boards competently taking on that task in a way that
    does not also trap it in trivia, micromanagement, and disempowerment of the
    very people who must get the organizations job done. Ironically, not a few
    best practices do just that in the
    absence of a powerfully compellingand
    conceptuallywhole paradigm of governance. Governance as the world still
    accepts it remains a patchwork of disjointed practices. It should be no surprise
    that it then produces a patchwork of probity and proper oversight.
    Fadindeed. 0

    Policiesfor Carver are any instruction by the board to the CEO or to the
    board itself, from the very broad to the
    very particular-any level of focus desired
    by the board. The great strength of Policy
    Governance is that it speaks prescriptively
    to stipulate ends and proscriptivelyto
    exclude means. When a board is prescriptive concerning means, it retains for itself,
    and does not assign, accountability.
    Carver emphasizesthat the board has
    total accountabilityfor the organization.
    Policy Governance is designed to encompass that total accountability,both the
    intended results and the means used to
    achieve results. It is designed to ensure the
    clear assignment of accountabilityto the
    CEO, with the concurrent obligationupon
    the CEO to formallypresent that accountability (report)back to the board. Policy
    Governance,used as intended,provides
    excellencein governance.The board of
    a Canadian charitable corporationthat
    adopts Policy Governance has performed
    duediligenceand fuElled all legal obligationsimposed on its directors.On a comparative basis, such boards and directors
    are far ahead of most corporations, even
    those in the world of commerce, in observing their legal and moral obligations.
    The assertion in the Primer quoted at
    the beginning is quite inaccurate.Any
    interpretationor perception that Policy
    Governance fails to assign or incompletely
    assigns accountabilitydemonstratesan
    erroneousunderstandingof what Carver
    postulates. By not presenting the fullpicture, the sponsorsof the mimer have done
    a disserviceto those who will be led to the
    incorrect conclusionthat the Carver model
    is unlawful in Canada. Hopefully, a new
    edition of the Primer, with appropriate
    corrections,will be issued without delay.
    Hugh M. Kelly, Q.C., Toronto;
    (4 16) 595-8 176;hkelly@millerthomson.ca
    (continued on back page)

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