This site is dedicated to better understanding how corporations work and why they fail.
Directorship is leadership in the boardroom. The focus is on creating value and satisfying interests.
On directorship challenges the myths and misconceptions associated with purpose:
Good Governance is investment strategy by other means. Every other definition is just good marketing.
Shareholders and stakeholders are false opposites. On directorship is written from the perspective of the corporation as a distinct and sovereign legal person.
No. In the same way as Executives lead and manage, Directors direct and assure. There are four management disciplines.
Boards are out of balance:
corporate governance regulation and education is designed to ensure the "correct" board structure, process and composition rather than ensure "imagination, creativity, or ethical behavior in guiding the destinies of corporate enterprises"
Directorship puts a name to what is missing in many boardrooms.
It is a universal affront to the hard rule law to conceive of a corporation as property. No one can lawfully own a corporation. A corporation cannot be bought and sold or compelled to work for another.
Corporations are distinct, separate and sovereign persons. What makes a corporation a person ? It’s not biology. In the eyes of the law, flesh and blood are not the markers of personhood. A person is anyone or anything to whom a state grants the rights of personhood: the right to own property, the right to make promises, the right to sue and be sued and the right to be responsible for wronging another.
Nor, is sentience a barrier to personhood. The law has long recognised that those who cannot act for themselves may act through agents, such as a board of directors. Who, historically, had an unequivocal duty of loyalty to the corporation.
If corporations are not property, how can they be used considered a mere tool or technology.
While a technology is created to achieve an objective, a person cannot be brought into being for an objective. In any other context, this suggestion would be abhorrent and offensive.
Yet, despite their personhood, corporations are still treated and mistreated as technologies. According the norms of corporate governance, corporations exist to enrich other persons (both corporate and human) Misconceived as nothing more than elaborate cash machines, they are denied their most fundamental right: the right to choose and realise their own purpose through their agents.
Nothing, if done right. But in the same way as managing is not leading, governing is not directing.
Governance is a hands-off approach to protecting firm value through risk oversight and a variety of best practice measures - composition, structure and process. At its core, corporate governance sets a managerial tone at the top - ticking the right boxes, having the right committees and having the right types of directors.
Governance is focused on doing things right. Directorship is focused on doing the right things.
Corporations are important.
But they're an endangered species, are exploited and have been fundamentally misunderstood for a century.
I write on the ethics, law and practice of directorship because our futures depend on restoring corporations to health.