Although shareholders should provide both positive and negative feedback, the reality is that the majority of shareholders are unlikely to make the effort. That does not mean they don't care about outcomes - they do - that's why they put down real money into the company.

The problem, in my humble opinion, is not with shareholder inaction, but with boards and directors. The for-profit corporation exists for the benefit of shareholders while satisfying legal and stakeholder requirements. If that is the case, then why is it that not one single publicly listed board has asked all of its shareholders what they want as a result of their investment?

You are right that shareholders have differing expectations. However, if you establish a company's shareholder metrics, (i.e. bell-shaped curve - value, benefit, growth and risk expectations) then the range of shareholder expectations prior to establishing those metrics will be wider than post-metrics. If you monitor the changing shareholder objectives over time, it will enable a much better match between corporate aspirations and owner aspirations. This is because people will invest in those companies that "share" their objectives, i.e. the company will pursue those outcomes that the majority of its shareholders want, therefore you will invest in those companies that want what you want. Over time, the outliers diminish.

The challenge for both the board and management is to resolve the dilemma of different objectives and perceptions in a way that satisfies the owners. Currently, both board and management establish a policy and a direction for their company without a real knowledge of their shareholders’ objectives.
The Shareholder Metrics process provides them with better information but does not absolve them of their responsibility or accountability.

Where they perform the task well, and satisfy many/most shareholders, then those shareholders will value that stock more highly and are less likely to quit the registry. Conversely, where board and management fail to satisfy shareholders then they will quit the registry, change the board, or change management. Isn't that the ultimate assessment of whether shareholder approve or disapprove of management performance?

These three options are currently available to shareholders (albeit some more easily achieved than others).

Over time however, it is anticipated that it will become easier for the board and management of a shareholder-centric company to solve the above dilemma, as the Investor Profile will ensure that extreme mismatches between differing owner objectives will occur less frequently.

Finally, and for whatever it's worth, I don't believe that shareholders trust directors and managers, even if they concede that both are well meaning and try to do their best. The trust is lost because of director and management subjectivity, bias, assumptions and arrogance.

If you provide additional tools to "aid corporate governance" then you will probably use the tools to make boards and management more accountable. Directors are the ones who would approve the use of such tools thus are unlikely to approve them since it would make their life more difficult and more transparent.

I have first-hand experience with this - it's a catch-22 situation - very sobering and very depressing.

When one talks with chairmen, directors and CEOs about "in the shareholders' interest" I am amazed that they subjectively decide "what the shareholder will get" and not what the shareholder wants - they don't ask their shareholders. Their actions do not match their rhetoric - and generally, perhaps with well-meaning intent, as a group, they are profoundly arrogant in their myopic view of the "value to shareholder" algorithm.

Furthermore the various director associations have more great inclination to support such worthwhile enhancements for the same reason.

Such tools are needed but unless governments impose such accounatbility, it's unlikely to happen - despite its need.

Maybe the question here is not so much "should board meetings be recorded" but rather what effect does recording have on board effectiveness?

Leaving aside the legal considerations, which are important, one might argue that if  full and frank discussions cannot take place, then decisions might be different to those had that information been presented. I suspect that a board member might be reluctant to discuss in a full and frank manner if he/she believes that those words may lead to either legal, personal of industrial implications. This may impact outcomes. As official minutes are generally santised, such problems occur much less frequently in a purely written form. Therefore I have no doubt that in many instances, recordings may hinder board effectiveness.

The other context is when a board takes poor minutes and has experienced many disputations about what was actually said and agreed at a meeting. Recordings may certainly help corporate memory but may hinder personal contribution for reasons mentioned.

I feel however, that verbal presentations made to the board by non-board executives might be recorded because the entirety of the presentation is the "evidence" upon which the board relies, deliberates on and uses to resolves matters. Opinions, comments and other statements made by executives in support of a view are important to the resolution of the issue in hand. The problem with this however, is that honestly in such statements may also be stifled as with board members. The fear of "retribution" within the organisation for honest (but not necessarily accurate) statements is a real influence on subjective decision-making.

1. How far or deep can a board of directors get involved in judging or influencing the leadership style and the leadership activities of its CEO?

The answer of course is that "it depends." Let us accept firstly the premise that a board appoints its CEO to fulfil certain tasks and to achieve certain outcomes. If the board is rational and competent, it determines the leadership and management skills and attributes needed to satisfy the board's objectives and appoints the best person it can afford who possesses those attributes to the rol. The reason is because such an appointment lowers appointment-risk and increases the likelihood of successfully achieving that which was intended.

Of course, if the board doesn't behave rationaly or competently, then the appointment may be sub-optimal or fail.

When we talk about "leadership and management skills" we inevitably include leadership style and "activities" or management practices. These too vary with the context.

The leadership style required for a predominantly "left-brain" organisation is different to one which is predominantly right-brain. Similarly, what you do and how you do it, from a leadership perspective, will vary, for example depending on whether you are changing an organisational culture, process or other corporate attribute very quickly or slowly (i.e. "big bang" change versus "continuous improvement".) Management style for revolutionary change is quite different to a "steady as she goes" type of change agenda.

To each of these myriad of contexts is applied a "management style" that will work best in that context.

If the CEO doesn't posses in his/her skill-set an ability to apply the optimal "style" then a sub-optimal outcome will occur. Sometimes this sub-optimal/dysfunctional approach can be very painful for an organisation.

The board's role, among other things, is to monitor CEO behaviour and performance. If sub-optimal leadership strategies are being applied within the orgaisation, the board, through the Chairman, should discuss the matter with the CEO in order to understand the issues: why did the CEO use that technique; is the CEO aware of the ramifications of that chosen technique; is the CEO capable of utilising the optimal strategy, etc

If the CEO doesn't satisfy the Chairman/board that they will/can remediate the situation in an acceptable time-frame, then the board may consider this one of the triggers that starts a search for a new CEO.

Remember that a CEO is meant to be "an expert" in dealing with and satisfying the challenges facing the organisation and for which that CEO was appointed. Board "involvement" and "influence" should only be applied when warranted, and that is a very subjective decision.

Unless the board is mature and knowledgable, then they too may misjudge the situation and impose themselves unjustifiably on the CEO when he/she is quite capable of handling the issues.

2. To what extent HR matters ( usually the domain of the CEO) can be treated on board level? 

The importance of HR will vary depending on the corporation, what it does and how it does it. I don't know of any company however that doesn't require people - so the importance of HR, culture, industrial relations, and so on will vary depending on context.

When the management of HR or HR-related issues threatens to destabilise the company, force the company to take on unjustified risk or expense, or when the issue threatens to  tarnish the company's reputation and ability to sustainably transact its business; then the board must interfere to ensure suitable remedies, strategies or solutions are in place. That doesn't mean that the board has to do it, but rather that it is done. If internal staff can't do it, then it's the board's responsibility to ensure that competent outsiders are brought in to "fix it".

3. What are tasks of board committees?

Each board committee (e.g. Audit, Finance, etc) has its own "agenda", own timelines, and its own objectives. The tasks therefore vary depending on those variables.

4. In what way is CEO to be involved in choosing his own successor etc?

It will vary from context to context. If the CEO has been successful, respected and is, say retiring on good terms or has been head-hunted into a new prestigeous role, then I suspect he/she will be actively involved in their own replacement.

If on the other-hand the incumbent has failed in his/her role, why would a board seek his/her involvement in the replacement?

One needs to differentiate between succession planning and the triggers that activate the plan.Normally, the concept of succession planning applies to senior management and not just the CEO.

Therefore, it is often a plan drawn up by or under the auspices of the Head of HR or equivalent or an external specialist. The plan is ultimately presented under recommendation to the board for review, amendment and ratification.

All corporations of any significance (i.e. employee numbers) should have a robust succession plan that is reviewed regularly.

The issue is then "what are the triggers that activate the plan" relating to, in particular, the CEO, the CFO and perhaps the Company Secretary.

Some of the triggers might include:

- unexpected resignation of the incumbent
- failure to achieve individual KPO for which the incumbent is responsible
- failure to deal adequately with a situation that the incumbent should have dealt with more effectively
- an incumbent's indiscretion, dishonesty, unethical behaviour, or similar
- foreseen milestone, such as age retirement
- premature or unexpected incident such as illness or accident

The succession plan should not only elaborate and identify individuals, but also processes that need to be implemented in the event that the plan is activated for any reason. In all probability, the plan will vary depending on the role. For example, the search for a CEO may be "in private" (i.e. a head hunted role) versus open advertising for other roles. Also the preparation for replacement may occur while the incumbent is still in the role.

In today’s paper (http://www.theage.com.au/victoria/saddams-music-teacher-jailed-over-robberies-20120120-1q9gc.html) The Age reported that a man was jailed for robbing two elderly women aged 87 and 60.

No argument with the 87 year old, but I am 61 and feel that I am in the prime of my life – and certainly not “elderly”. We “mature” adults are to life what a good aged red is to wine; what ripe fruit is to delicious eating; and what experience and a meaningful life’s journey is to wisdom, mentorship and good counsel.

A polite and gentle retraction would be appreciated from the Editor.

It’s hard enough to get through to those “youngsters” in their 20’s and 30’s who think that one’s 50^th birthday automatically triggers a “factory reset” of their intelligence and experience. We really don’t need The Age newspaper reinforcing those discriminatory attitudes.

The "only performance report" that matters is the one that reports to shareholders the extent that the corporation has lawfully and ethically delivered shareholder objectives against the criteria of "value", "benefit", "growth" and "risk".

And the only way a board can know what those objectives are is to ask ALL shareholders.

Not only don't corporations ask ALL shareholders but they use institutional (big investor) objectives as a proxy for all shareholders. Research has demonstrated that this assumption is false.

If you ask directors/managers to developed an internally generated performance report, then you will get a subjective presentation of what suits directors and managers and justifies their positions - and not what shareholders consider important or want.

A cynical view - perhaps - but many directors have demonstrated over an over again that they make decisions in their own interest rather than that of shareholders.

Considering the industrial action by society's most necessary workers (health, education, police), maybe it's time to change the priorities we have in society. I suggest the following:

• A society must treat all people equally and without bias;
• Education at all levels must be accessible to all and the only way to do that is to make it free and make all tertiary education merit-based;
• Private education is open to all who choose it but the State won’t fund it to any greater extent than if the student was in the public sector;
• The law must be blind to colour, religion, gender, sexual preference and socio-economic status;
• Equality of health access and health quality to all;
• The state and its instrumentalities must be secular – because people in society believe different things. The State must be neutral while allowing anyone to believe “anything” they choose – provided it doesn’t harm or denigrate anyone else;
• Free speech comes with responsibility and obligation (i.e. no harm to others);
• If you are unemployed and you want unemployment benefits, you must work for the state on community projects, to the best of your ability;
• Migrants to Australia must accept Australian law and Australian values – otherwise they can go elsewhere;
• Hate speech (or actions) is illegal;
• The Education system must teach students, civics, ethics and basic commercial principles to enable them to interact effectively in society when they graduate from school;
• Politics must lift its game – it needs to be principled and competent;
• Donations to political parties must be illegal;
• Politicians who make promises before an election must deliver them or suffer a penalty (lose a percentage of their pro-vote) at the next election;
• The helping professions (health, education, etc.) would receive significant tax cuts to enhance their standing and their value – to both society and the individual;
• … and I could go on…..

As I understand the argument, it really boils down to two almost irreconcilable positions.

On the Scientific View: Science as it stands today, is incapable of proving or disproving the faith-based propositions due to the unavailability of suitable and adequate tools, techniques and measurement methodologies. Although science is a reflection of Man’s great intellect, intelligence, advancement and at times, wisdom, it has developed a profound arrogance.

Although scientists acknowledge (begrudgingly) that there are areas of Man’s beginning and existence for which they have no explanation, they refuse to acknowledge that answers exist and that the offered answers may be correct. They argue that since they cannot prove those answers in a laboratory situation, those answers are "incorrect". Their argument is logically incorrect as it commits the fallacy of Argumentum ad Ignorantiam: that the scientist’s proposition (that faith-based propositions are false) is true simply on the basis that the scientist’s proposition has not been proven false.

There must be and is an answer to Man’s beginning’s and his continuing existence. Answers do exist as proven by Man's very existence. The problem is that science has not evolved sufficiently to be able to demonstrate or prove those answers.

The limitation is of science and scientific method and not of the answers provided. Science, in due course, will either confirm or disconfirm the hypotheses upon which various answers have been provided to these nagging questions. It may be that all hypotheses provided to date will be disconfirmed. That will not mean that there is no answer – it will merely mean that the answer has not yet been found.

Furthermore, it is not a matter of categorising the ‘dispute’ as being between ‘science and faith’, as such a categorisation implies that faith is ‘unprovable’ scientifically. A more appropriate categorisation is between the ‘scientifically provable’ and ‘the as-yet scientifically unproven’.

On the Religious view: Religions emerged from their various contexts to suit Man’s needs at those times. They were formed in response to not only socio/environmental stimuli, but also Man’s need for an understanding of his environment. His ability to explain profound, largely natural, phenomena eluded him: his only recourse was to a supernatural being: a God that had all the answers, but was out of the reach of being known by Man and therefore could not be refuted.

Understandably, each religion claimed its “rightness” over all other beliefs and religions. Some interpretations within some religions even went so far as call for the death of all people who did not adopt their view of the world and of their God. This continues to this day.

Soon Man learned that the people who controlled access to their God gained enormous power over the people who followed that God. Some religions manipulated the supposed message and intent of their God in order to retain their power. They could do this because followers of that religion were too trusting, intimidated, had no better explanation, unable to question or were afraid to question or challenge.

Others felt that the greater the number of adherents to that brand of religion, the greater the power of the religion and therefore the greater the power of the people who controlled the gateways to it.

In each case, the religion was a product of Man, his limited understanding, and the context within which that religion was born.

If one reflects on the essence of religions, one finds kernels of truth which if adhered to, would enhance Man’s growth, harmony and wellness. Most religions prescribe sane and appropriate ways for Man to interact with his fellow Man. In the contexts in which those religions formed, those prescriptions may have served its adherents well. The intercession of Man to manipulate these prescriptions for his own ends, has not served Man well and in many cases has distorted the essence of goodness to be found in each religion.

In each religion there are Men of goodwill to their fellow Man, Nature and the environment, and there are people of ill-will or of self interest who do not serve Man’s best interest. It is not the religion that fails; it is the people within it who fail to heed the goodness of the religious context in whose name they speak.

In each religion there are aspects, interpretations and guidelines that serve its adherents well and those that do not. Each religion offers its own definition of ‘right’ and ‘wrong’. Some of these definitions of rightness and wrongness are shared across many or most religions and others are peculiar to a specific religion. Each in their context is given meaning by that context.

We are all of our own context – a context that may be defined by a religion or one defined outside of religion. If we all took our bearings only from our context’s definition of ‘right’ or ‘wrong’, we might become confused by the conflicting interpretations of rightness and wrongness offered by different contexts.

In the Universe of Man there is no absolute ‘right’ and ‘wrong’: only that which serves him and that which does not - only that which enhances the growth of his essence and destiny and that which impedes it.

Despite all of this, religion is merely a context. The context is not ‘good’ or ‘bad, or ‘right’ or ‘wrong’ – it just is. Our challenge is to make decisions from within our own contexts that will enhance our essence, our destiny and the world around us. The context gives our choice a character that enables it to dimension our essence. No more, no less.

Is science right? Not until it can convincingly confirm or disconfirm the claims of religion. As long as scientific method remains imperfect, its inability to confirm or disconfirm

Is religion right? Depends on which religion you are talking about and whether you believe in religion at all. Believing in a religious view does not make the view right. Not believing in religion or a particular view does not make that view wrong.

The way to establish value as perceived by the client requires 1) an understanding of what the client is trying to achieve (both generally as a business and specifically in the context of a particular brief) and 2) the way that the law firm can help the client achieve those outcomes (rather than "just" provide a service). In this way, the legal firm is perceived as contributing to corporate KPOs rather than "just" being a cost (and therefore detracting from those KPOs.)

In order for the firm to do these two things, a person within the firm needs to understand the client's context and needs, and be integral to, engineering a service or group of services provided by the firm that will help deliver those outcomes for the client. This person must be able to pull resources from anywhere in the firm (or outside of it) to deliver what the clients need.

Intellectually, most people in the legal community will acknowledge this as a truism and obvious. The challenge comes from aligning the firm structure, processes, accountabilities and reporting with the needs of its clients and the market.

As I understand the structure of legal firms, service lines have their own utilisation, sales and contribution accountabilities. This is OK if you are based on a "sales" culture where every service line is trying to (and measured by) selling and utilising its time and resources. However it's not the optimal structure if you have to engineer different service line inputs as and when a client may need them so that the firm can "deliver value".

Therefore, if a firm is serious about delivering value, then it needs to seriously consider the suitability of its structure to deliver such value.

There is another problem that will occur in moving to a "marketing" culture (i.e. giving the client what he wants rather than selling them only what you're offering). Without getting too philosophical about the issue, a sales culture tends to be "Left-Brain" meaning that it is predictable, sequential and ordered. People know where they belong and to whom they are accountable. A marketing culture is more "Right-Brain". People are more flexible, able to handle ambiguities and don't stress with more than one person to be accountable to.

Therefore, a culture that is value-driven and market-oriented, will necessarily be more right brain than left brain. If your firm is currently composed of a lot of technical experts with a fine eye for detail, then I suspect they are predominantly left-brain. If you impose a right-brain culture on them (e.g. a matrix form of management) they will stress because they seek orderliness and predictability. If the firm restructures to provide a fluid environment to best deliver value to clients, then expect stress to increase. This needs to be managed or else the firm will implode (i.e. staff will leave to find less stressful environments.)