Stop the Rot....
Re-framing Corporate Governance for Directors and Politicians....
Published by Greenleaf/ Routledge Publishing on 3 July 2017: ISBN 978-1-78353-766-2 . eBook ISBN 978-178353-767-9
Bob Garratt’s new book is a radical rethink of what we mean by ‘corporate governance’. He is responding to so many public complaints and Public Inquiries that have concluded with the words ‘but much more attention should have been paid to the low quality of the corporate governance involved’. He argues that by politicians, directors, regulators, owners and the public restricting the responsibility only to directors, all have deluded themselves and so damaged our nations – which explains some of the Brexit/Trump disengagement between the elite and the mass of the people.
He argues for an Inclusive Capitalism in which ‘corporate governance’ is now defined by the inter-actions between directors, owners(including stakeholders), legislators and regulators – all under much closer public oversight. This is way beyond the current restrictive mind-set of directors, boards and finance only. Twenty five years after the issuing of the internationally influential Cadbury Report on the Financial Aspects of Corporate Governance this is both a refreshing return to basics and an indicator of a more active, wealthy and inclusive future.
He builds on long experience working internationally with chairmen, managing directors, CEOs, ministers, top civil servants, NGOs and charity leaders.
Currently few of these are clear about how to govern in increasingly uncertain times. He argues that they have had little or no basic training for their crucial top jobs and so do not appreciate the professionalism and demanding values needed now to show effective governance to an increasingly sceptical public. He argues that all four parties involved have been seduced into a purely financial and compliance-based view of corporate governance issues and away from the basic legal duty of ensuring the success of their organisation through the use of clear human values and integrated reporting. He argues for dropping 90% of the current codes and regulations and returning to the basic law and the professionalism designed into the original legislated seven general duties of a director; and then for the owners to be charged with the same fiduciary duties.
This book was researched during the four years before either Brexit or Trump emerged, yet it shines a new light on these phenomena. He argues that there is no top level understanding or acceptance internationally of the basic human values of any organisation – Accountability, Probity and Openness. Nor is there much public knowledge of those seven basic duties of any director including Care, Skill and Diligence, so the public are not able to hold directors and owners to account. He argues that these duties should be made mandatory for all registered directors and then expanded to include the owners, legislators and regulators who are charged with delivering future governance; and he insists that all four parties should in future be assessed through those three professional values. Without such acceptance and competence-building many top people involved in governance will continue to struggle to explain themselves to an increasingly estranged and angry public.
The current narrow and restrictive view of governance, especially corporate governance has reduced the national capacity to increase financial, social and physical wealth whilst allowing ‘rent-seeking’ CEOs, politicians and senior civil servants to play revolving door games. This has enriched them whilst diminishing the public’s wealth following the 2008 Western Financial Crisis. He proposes new national open learning systems for mutual competence building and assessment of all four key players, under greater public oversight.
He develops the arguments for Inclusive Capitalism so that the three capitals - Finance, Social and Physical – are accounted for openly by boards, owners and politicians through combining Integrated Reporting systems, Human Values and professional regulators. He decries the current ‘business values’ of rampant greed and lust and shows how these abuse the public’s understanding of the term ‘values’. He highlights the current confusion between organisations’ ‘values-in-use ‘ (‘what we do when no-one is looking’), state-imposed Corporate Governance values, and our Personal Values and how they conflict.
This is the rot that must be stopped.
Bob Garratt, Past Master
About the author
Bob Garratt is a ‘pracademic’- a practitioner who has always had at least a toe in academia to keep them, and himself, honest. His work, with his wife, Sally, has taken him to over 40 countries on five continents with major experience in China, South East Asia, Australia, Southern Africa and the Commonwealth. Starting in architectural education he moved into large scale action learning-based organisational change programmes. However, he never understood the role of the direction-givers in the businesses with whom he worked, nor how they connected their role with the reality of the working world of their own organisations. So he developed processes for board assessment, development and effectiveness long before the phrase ‘corporate governance’ was minted. With great support from Sir Adrian Cadbury, Charles Handy and Bob Monks he has developed his thinking and practical assessment tools over 25 years. Bob has produced six books including the long-selling The Fish Rots from The Head; Developing Effective Boards which has influenced much of the leading edge thinking in the area. Stop The Rot: Reframing Governance for Directors and Politicians takes the issues much further.
In addition to his consultancy work through Garratt Learning Services Ltd. he is a Past Master of the Worshipful Company of Management Consultants; Visiting Professor at Cass Business School University of London; and Professor Extraordinaire, University of Stellenbosch, South Africa where he chairs the Centre for Corporate Governance in Africa and has served on the faculties of Cambridge University and Imperial College, London.
Professor Bob Garratt 3 Beresford Terrace London N5 2DH UK
Tel: 44(0) 20 7226 2403 garratts@btconnect.com www.garrattlearningservices.com
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Endorsements Received
‘Bob Garratt is once again at the forefront of challenging conventional thinking on corporate governance by fearlessly exploring areas where others fear to tread. In his relentless pursuit of excellence in governance he thankfully takes us beyond yet another dissertation on rules and standards to remind us of the underlying thesis of good governance around values and trust; and seeks to build on the twin issues of competence and professionalism. What I find compelling is his challenge to regulators and policy makers to demonstrate genuine commitment and leadership through thoughtful legislation, and enforcement that restores the productive but responsible capacity of business enterprise.’
Philip Armstrong. Director of Governance, Gavi Alliance. Switzerland
It is clear that this new book from Bob Garratt is needed as a guide to the post Brexit/ Trump world. It is visionary in making bold suggestions; it is ambitious in raising new questions. The book pinpoints ‘the demolition of professionalism’ as the critical cultural change that accounts for so much we regret in today’s corporate world.
Robert A G Monks, author of Corporate Governance and Corpocracy USA
‘I am happy to work with, and learn from, Bob Garratt, Honorary Visiting Professor at Cass Business School. This book epitomises his bold approach. In a world hungry for responsible governance and trusted leaders his insights highlight the unacceptable; showcase the much needed exemplars; and push us towards higher professional standards. I particularly appreciate his call for leaders who forge and sustain good governance built on collective ambition and values. His ‘provocation’ is not only to corporate leaders but also to policymakers and regulators who must reinforce such standards of excellence if we are to stop the rot’
Professor Marianne Lewis, Dean, Cass Business School, London UK
‘The depth of his investigation into the fundamental conflicts and inconsistencies in current corporate governance frameworks and practices brings transparency to many of the causes of lack of trust and faith in Australian business. An incredibly valuable work. It needs to be studied by leaders in business and government to begin the process of correction. Readers of his seminal work The Fish Rots from The Head will not be disappointed. Stop The Rot will be a handbook for all those involved in corporations seeking certainty of direction to improve the standing of business leaders in our community.’
Dr Denise Fleming, Foresight, Sydney Australia
‘Bob Garratt’s latest book Stop The Rot focuses on the governance of government, and clearly and succinctly lays out who are the key players, what are the key issues and what needs to be done ….. A must read for anyone interested in governance’
Jane Valls, Executive Director, Gulf Co-operation Council Board Development Institute Dubai
Taking as a starting point the low level of public trust in our business leaders and politicians, Bob Garratt powerfully argues the case for rethinking what we mean by governance. In his view, rethinking is needed in organisations of all kinds – listed corporations, private companies, state-owned enterprises, even charities and co-operatives, as well as by politicians. His focus is on our system of values, and the need to reconnect our basic human values with the values in use in commercial and political life. His comprehensive study of the issues and possible ways forward should be required reading for all those who hold, or aspire to, positions of power in society.’
Philip Sadler, Tomorrow’s Company UK
A fresh perspective on what it means to be a direction-giver. Garratt tells directors what they often do not want to hear in a way that makes it clear that they have to listen.
Professor Daniel Malan, University of Stellenbosch South Africa
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Professor Bob Garratt 3 Beresford Terrace London N5 2DH UK
Tel: 44(0) 20 7226 2403 garratts@btconnect.com www.garrattlearningservices.com