behaviorial dynamics in asian boardrooms

In the beginning Heaven and Earth were

formed. Heaven was represented

as a circle, and earth, as a square. That was the Chinese

tradition. And the symbol of a king was a vertical

line connecting Heaven, Man, and Earth

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All Rights Reserved. 2014. Dr. Gregg Li

THINKING DIFFERENTLY!

Perspective of a Governance Architect

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Forms follow function

Design Human Relationship Project Management Technical Specs


WHAT IS THE PURPOSE OF A BUSINESS?

Seeing Differently

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“The purpose of a business is to find and keep a customer…” Peter Drucker


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Therefore, it follows that the purpose of

CG is to ensure that the practices of

finding and keeping customers can be

sustained….


SO, HOW TO BE AN EFFECTIVE DIRECTOR?

AND DOING SO IN A ROOM FILL WITH STRANGE, UNFAMILIAR, AND INTELLIGENT MEN AND

WOMEN? It depends….

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!  Fit for Purpose !  Team Work !  Roles of Governance vs Roles of Management

!  Competency !  Context

NO BOARD ��IS EVER PERFECT


AND BEHAVIOR IS CONTEXTUALLY BASED…

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!  On Culture !  On Context and Sophistication

of the Industry !  On Competitive Response !  On Competency !  On Complementary Roles in

Control !  On the Power of the Chair

DEFINING EFFECTIVENESS – 7C’s

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Competency Directors and

Chair

Complementary Roles in Control

Board and Management

Culture and Context Maturity and Industry

Competition


PERSPECTIVE OF CULTURE - ASIAN

•  If only John Chan can speak up more. He has so much to add. How can he speak up more?

•  Why is Jill Lee always late?

•  Why is that he always grabs the Chairman on the side and whispers into the Chairman’s ears?

•  How much do you earn? •  Can I have a second helping please?

•  Dr. Wong always host a 12-‐course dinner, despite having so much food left after the meal. Why?

•  Be careful with generalization!

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ONE MAN BAND

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ORGANIZATIONAL CONTEXT AND BEHAVIORS THAT FRAME GOVERNANCE

BOARD (Management Accountability)

GOVERNANCE Internal Accountability

MANAGEMENT (Staff

Accountability)

Source: Accion, 1998 13


BABY BOARDS, ASIAN BOARDS, AND UNIVERSITY BOARDS

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In Asia, the top guy is much more ‘equal’ than everybody else….


Operation Supervisory Management Governance

Why?

Roles

Work

What? When? Where? Who?

How to?

WHOSE DECISION IS IT?


TWO-TIER OR SUPERVISORY BOARD STRUCTURE

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FAMILY BOARDS

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Family Council


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Complementary Roles in Control

-- Board and Management


FUNCTIONS OF A BOARD

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Strategy Formulation

Policy Making

Accountability

Management Supervision

Future Past

Outward looking

Inward looking

Source: Robert Tricker, 2007


FUNCTIONS OF A BOARD IN PRACTICE

Sample Area of Responsibility " Sample Board Tasks

Accountability •  Identify competent managers •  Set clear and measurable goals •  Monitor performance •  Confront weaknesses

Strategic Planning and Policy-making •  Provide input in charting strategic course

•  Provide guidance in setting policy •  Provide guidance in developing and

mobilizing solutions Others •  Maintain continuity

•  Renew leadership •  Self-evaluate

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So, how to be an effective director?

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Competency -- Directors and

Chair


WHAT ARE COMPETENCIES?

Sets of behaviors Displayed by those who are effective in their jobs Distinguishing the effective from the less effective

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EXAMPLE 1

Engineering Ph.D student Trying to repair a car

Not yet competent

Knowledge

Skills

Attitude/Motivation

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SO, HOW TO BE AN EFFECTIVE DIRECTOR?

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And doing so in a room filled with strange,

unfamiliar, and intelligent men and women?


#1: ALIGN FIT FOR PURPOSE OF YOUR BUSINESS MODEL

Architecture

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GOVERNANCE Internal Accountability

Source: Oracle, 1998

#  The Roles of the Board –  DeSines the business –  Approves strategic decisions and working policies

–  Allocates resources –  Selects and motivate talents

#  The Roles of the Executive Directors –  DeSine and communicate the strategy

–  Deliver the plan –  Lead the employees –  Align the talent

#2 SEPARATE GOVERNANCE FROM MANAGEMENT

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#3 LEARN TO PLAY DIFFERENT ROLES ON THE TEAM

VERSATILITY IS KEY

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#4: MATCH COMPETENCY TO CONTEXT

LEARN TO ADAPT.

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#5 CONDUCT AN ANNUAL REVIEW

Feedback is the breakfast of champions

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BRIEF SUMMARY

I.  All Boards can be more effective! Director’s effectiveness is contextually based.

II. Different governance skill sets at different stage of growth and maturity.

III. Getting there: 1.  Align Fit for Purpose with Business Model 2.  Separate Governance from Management 3.  Learn to Play Different Roles on Your Team 4.  Match Competency to Context 5.  Conduct an Annual Review

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P.S.…LEARNING TO LISTEN

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NOTES

•  All rights reserved. No part of this publication may be reproduced, stored in a retrieval systems or transmitted in any form for by any means, electronic, mechanical, photocopying, recording or otherwise without the expressed permission of the copyright owner. Permission will generally be granted for free use of the material within this document on condition that the source is clearly credited.

•  Some of the photographs included in this slide pack are copyright protected and should only be used in this slide pack. If you with to use them for any other purposes than discussion of this slide pack you should seek the permission of the copyright owner.

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