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The real impact of corporate governance isn't about compliance or structure or policies, it's about the conditions that impact decision-making. Sound-Up Governance features fresh perspectives to help boards and executives to be a bit better tomorrow than they were yesterday.
Lots of things in life are complicated. Take, for example, the concept of fashion. If you think waaaay back, Reallie Steilish only exists because you love Billie Eilish and have your own keen sense of street style. Just having a sense of style at all is a bit of an unusual thing in the Ground-Up Governance universe. Many people have no clothes or hair at all, which is a statement on it’s own I guess. There are a bunch of people - take Mr. Bananaman, for example, who wears a tie and nothing else – whose clothes are basically just there to show that they have a job of some kind. Other people have funky hairstyles, which can be a bold statement. But starting a fashion company is a pretty big move given the overall sartorial landscape.
Anyway, back to the whole lots of things in life are complicated thing. Even the word “fashion” is pretty hard to define. Now try to define what GOOD fashion means. Now try to define good fashion in a way that everyone can agree with. Now try doing that in a universe where most people don’t wear clothes or have hair.
When it comes to complicated things, trying to define exactly what combination of skills, demographics, professions and personalities should be on your board at least a 7 out of 10 on the “How complicated is this?” scale. If you wanted to try to have every possible perspective in the world represented in your boardroom, you’d need 8 billion directors, which would be even *more* complicated.
One way that people like to deal with complexity is by creating tools. Fastening two pieces of wood together, for example, would (lol) seem like a complicated problem without tools like nails and hammers and screws and screwdrivers and drills and stuff. Ground-Up Governance doesn’t usually express strong opinions about things but we think it’s worth saying that any corporate governance tool that claims to solve a complex problem in a neat and tidy way like a hammer and a nail is too good to be true. One example of such a tool is a board skills matrix.
A matrix is basically a table – the kind that has data in it rather than dinner on it – where one axis has a list of skills and other characteristics that you think might be important for your directors to have and the other axis has a list of the directors on your board. Every director gets a ✅ for every skill or characteristic that they have. Once you’ve filled out your skills matrix, you should be able to see at a glance where your board has gaps or redundancies in your skills. In theory, you could then use that information to do a good job at director nomination and end up with really good board composition.
You could imagine that it might be important to have a hat sales expert on the Reallie Steilish board. So, you might put “hat sales expertise” on your skills matrix. And then you might realize that no matter how good the hat sales expert is at hat sales, they might not actually be a very good director. To be a good director, maybe they’d also need to be independent, and maybe also funny, and maybe even kind. They’d definitely need to have enough time to make it to board meetings. Do *all* of these things go on the skills matrix? Which things are just kinda nice to have, and which ones are non-negotiable? Should the same expectations apply to every director?
Anyway, it’s pretty obvious that even if there’s a glaring gap in the skills matrix, it might be pretty complicated to solve it. Part of the problem MIGHT be (just maybe) that a skills matrix has started to look like something as simple as a hammer and a nail, and directors have all started feeling like they’re carpenters, even though none of those things is true.
P.S. Probably the most editorial post yet on Ground-Up Governance (sorry).