203. Why do we do things the way we do? (Question #1)

This season, every episode of OMG focuses on a question that directors really need to answer. 

OMG is written, produced, narrated and scored by Matt Fullbrook.

 

TRANSCRIPT:

Question #1: Why do we do things the way we do? No matter how confidently and aggressively your shareholders, regulators, governance consultants and board educators might say otherwise, there is no decisive evidence and no consensus that any specific approach to doing board stuff is any better than any other approach. If you take a step back and really think about all of the things your board and executives do in service of corporate governance, not to mention all the conditions that we covered last season, one thing should become clear: most of it is optional. Sure, there are some things that are legally mandated, and other non-fungible rules that will get imposed on you from external authorities. But you even have a lot of flexibility when it comes to how you follow those rules…in most cases, at least. More importantly, all the stuff that’s NOT mandated is optional by definition. That means you have freedom to change. And having the freedom to change means it’s important – and powerful – to ask why we do things the way we do? In some cases, you’ll quickly realize that there’s actually no reason at all. You just do things because it’s the way they’ve always been done. In other cases there will be an identifiable and memorable origin, and maybe even a rationale. But no matter what, asking the question is important. If you’re looking for a place to start with your questioning, just look through last season’s conditions. Use the question format “why do we do [blank] the way we do?” where [blank] is one of the conditions. The fact is, you’re probably doing a bunch of optional stuff with no evidence that it works well, and can’t even remember why you’re doing it in the first place. That means you can ask an even more fun question next: “what might better look like?”