Managing Leadership^®

We’ve spent time over recent weeks talking about what’s broken with corporate governance. And, generally, the core problems seem to arise from a systemic weak point in the flow of responsibility and authority from owners to managers.

It’s worth noting that this isn’t a new concern. As long ago as the early 1930s, academics, and at least one prominent legal expert, insisted that the question of how to distribute power among owners, directors, and managers needs to be examined to ensure the proper functioning of the corporate governance system envisioned by this form of ownership.

In the real world, there is going to be a difference between theory and practice. And that is going to open up between what theory says ought to happen, and what the circumstances that actually obtain allow - or even drive - to happen.

This is why in publicly-traded companies characterized by anonymous shareholder ownership, in the absence of direct control by those owners, managers naturally moved in to fill the void. This fact became entrenched in the system, as well as among those who work, teach, and advise it - and even among those who own it.

That, of course, is beginning to be challenged, again. But the current debate will be no more fruitful than the earlier one if it doesn’t center itself on the core issue facing corporate governance.

We have discussed these and related issues over the past several weeks - particularly with regard to CEOs, managers, boards, and directors. It had been my intent to move on at this point to the role of managers in the context of the overall discussion.

But Cam Beck, of ChaosScenario, has pointed out an important missing element in the discussion, so far: the motivations of owners. So we’re going to spend a little time over the next few days asking some questions about them:

• Who are they?

• What do they want?

• How do we know?

• Why does it matter?

The intent, as always, is to help us to better understand the practice of management, by developing a better appreciation of its purpose and role. Please do join in!

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This post is a part of a series. You can learn about and link to the other articles here: Anonymous owners

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Today’s tip: Part of the logic of our recent focus on corporate governance is in the fact that what you do is largely determined by how you perceive the overall situation and your role in it. With that in mind, please see this insightful piece by Michael Wade, of Execupundit.

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