The emerging art of board composition

When a board turns its attention to the judgments that cannot be delegated, the meeting can resemble a good dinner party – with a group of men and women who respect each other but have different thinking styles and backgrounds engaged in spirited conversation.    Board composition used to be secret chairman’s business.  It was[…]

Why it’s critical to care about board culture

A lot of what we believe about management comes from the military. Organization charts display hierarchy. Boards have authority and ultimate responsibility but they cannot accomplish their mission by issuing orders. In creating boards, and judging boards, we are interested in soft issues as well as hard. We care about culture. I want to share[…]

Conversation as risk management

To plunge right in, do you know that curve with a long tail on one side that plots size of loss on the x-axis and frequency on the y- axis? I want to divide it into three parts. There’s the big pile of business-as-usual outcomes on the left of the graph. There’s the long skinny[…]

Your job, my job, our job – the balance between Boards and management in governance

One of the principles of traditional governance is that a board oversees rather than manages. Both activities involve inspecting. While it is normally the boss who inspects, it is worth noting that both parties have the same objective: getting it right. Inspector and inspected are on the same team. As such boards participate in decision-making because as[…]

Governance – taming the beast

If you take an interest in the conduct and regulation of banks, you encounter the word, “governance,” almost immediately. The Australian Prudential Regulatory Authority (“APRA”) has a standard with that title.1 The Basel Committee on Banking Supervision (“BCBS”) has issued a series of documents on “corporate governance for banks.” The newest version (the “2014 Guidelines”)2[…]

Why bankers should read poetry

In December of 2011, Monash University unaccountably gave me an honorary degree.  Having failed to get into law school in my twenties, in my sixties I became a doctor of laws.  In exchange, I was asked to give a graduation address — in this case to approximately 350 Asian recipients of finance and economics degrees.[…]

Thinking about banking

Some years ago, I was introduced to a well-known writer at a party in Melbourne. “Harrison’s a banker,” my host said helpfully. “Gee,” responded the writer without missing a beat, “I’ve never met anyone in organized crime before.” I spent half a second searching for a clever response. But the Global Financial Crisis was raging,[…]