Earlier today, I was on Twitter sharing some new news around corporate governance, and several people have been writing emails asking why it matters. They argue that Citi is just another firm that will fail in its own way. But I think in the specific individual story, is a larger significant story.
So, let me elaborate just a bit and see if I can make the point I’m aiming to do.
Citi just expanded board of directors, which is unusual during normal times, because every time you have more people, the more complex decisions can become/be. On top of which, this move is actually the reverse of what most Boards have been doing since 2008. In other words, it’s VERY unusual. When the Board chairman announced many months ago that he was going to pick 3 new candidates and expand the board, to go from 11-14, I was tracking this topic to see what they actually did. And today, Andrew Sorkin’s column in the NYT announced the news, here. In net, they added Gary M. Reiner, a former CIO (chief information officer) for General Electric, and James S. Turley, a former chairman and chief executive of the accounting firm Ernst & Young. I’m sure these people are quite talented. And there are probably great reasons for why they got picked, besides being great trophies (see I sit on the Board with so and so!). But my problem is the missed opportunity.
Compare this to another large organization. About a year ago. Starbucks picked Clara Shih to be on their Board. Clara Shih started her career at Facebook, has a consulting firm in the social media space and a book on the same, entitled the FaceBook Era. She is 31 years old, an Asian, a woman, a millennial, and, of course — professionally, a social media expert. She is supremely talented AND she is different. Does she look and feel like the rest of her board? Does she think about things in the same ways as other directors? Likely, not. But I bet she’s bringing huge value because her point of view is inherently different.
The problem with the stereotypical board of directors (BoD) is that most board members are very similar. They all bring the same type of energy. Culturally, this means it has very low difference, which almost by definition means they challenge little. The feedback loop supports sameness, and as evidenced by history, certainly defies progress. That’s why so many companies and their boards feel stale, and stagnant, as my friend Günter Soydanbay and I were just emailing about. Who we are is what we create. Stale doesn’t create innovation. Fresh creates innovation.
What is wrong with this specific decision at Citi, is also what is wrong with corporate governance in general, and I’m proposing is also what is wrong with our culture at large. It is this: Until you celebrate onlyness — the difference that each of us brings to each and every situation — you only listen to sameness. Which reminds me of that quip that the very definition of insanity is to do the same thing over, and over again, and then expect a different result. This path will only end badly.
Because the truth is this: When you deny different, you deny innovation, and ultimately you deny growth. The opposite of growth isn’t stagnation, which is only slowing growth. The opposite of growth is decay. And that is the risk we’re all facing — organizationally, geopolitically, and culturally.
So the fact that Citi picked yet another group of people that are *exactly* like the rest of their Board is not a surprise, but surely a missed opportunity. Instead of choosing modernity, they have chosen the path that leads to decay. To manage for yesterday’s conditions, rather than invent the future. It makes me sad.
There is an opportunity to be open in all things. To include. To seek. To refresh.
Step: Don’t be like Citi: Look around you — are you finding ways to listen to the new? Tell us specifics…
I do agree. We need people who question ‘status quo’ and definitely not people who fall in line flat to please the men at the top. Unfortunately organisations do not learn despite bad experiences in the past. And in growing organisations we also need people who can think out of the box. Courage, conviction and ability to call a spade a spade to the spade are some of the requirements at the corporate board level. But will they ‘listen’ to us?
I totally agree with you and I’ve been on a few boards that did have vision. However it seems particularly in banking that it’s becoming harder to select ‘different’ board members.
Partially because of the conservative climate within banks after the GFC and partially because (here in Australia anyway) government has continually tightened the requirements for being a board member of a financial institution, to the point where it it’s becoming unviable to be a board member unless you’re already a financial professional.
The obvious downside is that in doing this they have effectively regulated out the very people that can make a competitive difference moving forward.
Agree, bringing on different, new type of, board members will enable different views and hence possibly enable innovation. Those companies that continue to bring on the same type of people will probably continue get the same type of results.