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January 29, 2008 11:51 PM Age: 9 yrs

Accountability and the Dance of Human Relations

Category: Eleanor Bloxham, Acc Commentary & Opinion, CG Commentary & Opinion
Source:  Eleanor Bloxham

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Eleanor Bloxham

Human relations is a dance.

Putting aside ignominious “gender based rules”, in human relations as in dance: 

  • Some are leaders
  • Some are followers
  • Some are happy to be both
  • Some just enjoy the dance
  • Some want to sit it out
  • Some will ask others to dance
  • Some will wait to be asked
  • Some choose the music
  • Some dance to the music that is on
  • Some dance to another tune.

Pace and rhythm are important in a dance and in human relations.

So what happens when the two enter the dance – begin the dance – and then one partner wants to sit it out?

In the world of corporate governance, the landscape contains all of these kinds of dancers – who can and do get quite annoyed at the rhythm, pace and participation of their partners.

How does this shake out today?

In the past, directors primarily were followers, happy to just enjoy the dance – or be there but “sit it out.”  If they did dance they generally danced to the music played by the CEO and management team. And they generally waited to be asked: they weren’t going to proffer unwelcome opinions and stand the chance of rejection.

For shareholders, this didn’t always work so well – think Enron/Worldcom. Despite this, a majority of shareholders have done the same thing. They’ve not studied well the companies they invested in. (Enron is a great example because the signs were there if someone had been looking.) They’ve been followers or chosen to sit it out. Not voting their proxies or leaving the dance floor i.e. selling rather than trying to change the music or ask someone else to dance.

In recent times, directors have changed to some degree. In the boardroom, they take the lead more. Today they’ll more readily choose their partners i.e. fire and hire the CEO and nominate the other directors. There is still a reluctance, however, to choose the music and the kind of dance the partners will do. 

Some shareholders, too, have become more active in recent years. These active investors have primarily been focused on who their partner will be and changing the mix between leading and following on the dance floor. There have been some in-roads on the music front – think corporate social responsibility (CSR) – and expression of views on strategic decisions, but for the most part there has been no suggestion of real innovation to new and different music forms.

Management in the past always led, chose the music and their [director] partners. More recently they have had to yield, to some extent, to the desires of the other dancers. Day-to-day, for corporate management, however, it’s not been a significant shift, primarily because they continue to dominate the choice of music and how the dance will be done.

Most employees, usually pawns (to use a chess analogy), have remained so. Complaints and dis-satisfaction have risen but employees have, for the most part, chosen to either “sit it out” unengaged or to move to another dance floor. Developing the skills to perform dances with the aforementioned dancers is off the radar for most of them. As a general matter, they don’t question the music or the dance. As in the question: “Who Moved My Cheese?” they simply react when a new dance comes along that they don’t know how to do. As a general matter, they don’t own their own power to create change by providing input on the music or the interaction of the dancers.

On a day to day basis, it isn’t this big picture that is generally seen, however.

Rather, it’s the pace and rhythm of the individual partners that draws attention -- as well as the unwanted asker (shareholder activist) and the sometimes reluctant dancers (directors, management, and employees).  

To truly change accountability and the way corporate governance operates, all the dancers will need to stop and consider:  What music do we want? What dance do we want to do? When should I lead, follow or get off the floor?

Copyright © 2008 The Value Alliance Company All rights reserved

Eleanor Bloxham is a strategic governance authority, author and advisor, and CEO of The Value Alliance (www.thevaluealliance.com) and Corporate Governance Alliance.

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