Things Your Grandma Knew About Corporate Governance and Human Capital Management in the Boardroom and ā€œCā€ Suite

01 Feb. 2013 | Comments (1)

For a Christmas gift, I was given a book of English proverbs and sayings. When I read it, I was struck by how many of the sayings found in the book related to the work I do. I soon realized that most of this wisdom originally came from my grandmother. 

Of course, now that I am “grown up,” I use much more grandiose and technical terminology to express the same ideas, but maybe there’s merit in reminding ourselves that there’s “nothing new under the sun?”

Given that the leadership tactics of Attilla the Hun, Santa Claus, Genghis Khan, and many, many others have already been shared with us leaders, I thought it’s about time that some of Grandma’s “approaches” to leadership were revealed! Although many of these sayings can be considered trite, and I do provide the below advice tongue and cheek, I have often found that, when related to governance and human capital leadership, a reminder of grandma’s common-sense wisdom cannot hurt.

Here are a few of what I considered to be the top teachings found in the book that can be related to various governance and human capital practices, along with the proverbs and sayings that relate to them:

Transparency:

Transparency is considered to be the foundation of good governance. It’s worth bearing in mind that in today’s world “the truth will out” and that “facts are stubborn things.” It's almost impossible for an organization (in the developed world, at any rate) to keep secrets, because “no man is an island” these days. What’s more, any “bad news travels fast.”

Regulatory Initiatives:

There are often complaints that regulations are too prescriptive. But, Grandma can tell you, “They who sow the wind shall reap the whirlwind.” It may not be fair, but the perception is that governance failures arise because “while the cat was away the mice were playing.”

In effect, companies (especially banks) were seen to “have bitten the hand that feeds them” and the political, regulatory and general public “worms have turned,” and reminded companies “he who pays the piper calls the tune.” Self-regulation was seen to consist of “pie-crust promises” and is seen not as a serious option by many.

Regulators are hoping that regulation will be the “stitch in time that saves nine” and that “prevention is better than cure.”

However, we need to be careful not to “throw the baby out with the bathwater” and remember, “Hard cases make bad law.” Brevity really is “the soul of wit” when it comes to regulation. You can see how this saying applies when looking at Dodd-Frank!

Regulators would also do well to remember, “When zeal is considered a virtue, it’s a dangerous one.”

Directors’ Duties:

Directors and executives should remember Grandma’s strictures that “honesty is the best policy” and that “if it’s worth doing (being a director or executive), it’s worth doing well”.

Maybe part of the problem for directors is that the role encourages them to be “jack-of-all-trades, master of none.” Because of the contradictory expectation that directors will be both generalists and experts, it’s easy for them to fall into the trap of “a little knowledge is a dangerous thing” and to forget to “look before they leap.”

On diversity, directors still tend to be “birds of a feather that flock together,” and that can reinforce their tendency to “find only nails because their only tool is a hammer.”

Directors live by their reputation and “a good name is better than riches” for most of them, but that should make them very wary of those with poor reputation and they need to make sure that if they “sup with the Devil they have a very long spoon” after all “tell me who you go with and I’ll tell you who you are”.

Shareholder & Stakeholder Rights:

Advice to shareholders and other stakeholders is also timeless, and much guidance can be found in enduring idioms, such as “all that glitters isn’t gold,” “appearances are deceptive,” and “if it seems too good to be true, it probably is.” All these proverbs would have served investors well. It would also have been a good idea not to “have all your eggs in one basket.”

Sadly it’s still true that “a fool and his money are soon parted.” and that “advisers run no risks.”

Relationship Between the Board and Executives:

This is a vexed area with many wondering if the line between directors and executives is becoming excessively blurred. Well the problem, for many directors is that they are “once bitten twice shy” of executives who know that “knowledge is power” and that “out of sight is out of mind.” The attitude of “scratch my back and I’ll scratch yours” isn’t working in the face of tighter regulation.

Directors know that “too many cooks spoil the broth” and don't want to “keep a dog and bark themselves,” but they also want to “trust but verify” executives.

Executive Remuneration:

Everyone knows that “money is the root of all evil,” and no one wants to “pay peanuts and get monkeys,” but, when designing executive remuneration packages, it’s good to remember that “pay beforehand was never well served.” Especially when one is thinking about equity based compensation, it helps to note that “a rising tide lifts all boats.”

Board & Director Performance Review, Education and Training, Talent management, and Succession Planning:

In these areas of human capital management in the Boardroom and “C” suite, “the road to hell is paved with good intentions.” There are many attempts for better management along these matters, but there is also a tendency to forget that “sauce for the goose is sauce for the gander.” Unfortunately, many organizations disregard Grandma’s advice here when it comes to Board and director performance review.

As far as director education and training is concerned, “If you think education is expensive, try ignorance” and “pride comes before a fall,” but never forget that “you shouldn't let your education interfere with your intelligence.” “Practice makes perfect,” so a Board should “train hard and fight easy.”

The whole Board needs to be competent, well-educated, and trained, because “a chain is only as strong as the weakest link.”

However, in these matters, “You can lead a horse to water, but you can’t make it drink.” The Board needs to convince itself that they matter.

This blog only represents a small selection of Grandma’s wisdom (offered tongue in cheek). We obviously don't need to teach Granny (or many executives and directors) “how to suck eggs,” but as she would, undoubtedly, say, “There’s none so blind as those who will not see and none so deaf as those who will not hear!”

What’s the serious point? Governance and human capital management are not, at root, about applying highly theoretical and academic models or the latest “silver-bullet” solution. Most of the concepts and pitfalls are already well known, but what is required is the determined application of down-to-earth commonsense.

Maybe you have your own favorite idioms to share?

 

View our complete listing of Strategic HR blogs.

  • About the Author: Christopher Bennett

    Christopher Bennett Christopher Bennett is a Senior Fellow, Human Capital at The Conference Board. In this role, Chris supports the Human Capital Practice which includes The Conference Board Human Capital Exchange™…

    Full Bio | More from Christopher Bennett

1 Comment Comment Policy

Please Sign In to post a comment.
  1. Gyan Nagpal 0 people like this 02 Feb. 2013 12:30 AM

    Very well written Christopher, I was chuckling throughout, but the message was loud and clear.

  • Human Capital
  • Back to Top