Editor's note

Citation

(2005), "Editor's note", Journal of Business Strategy, Vol. 26 No. 6. https://doi.org/10.1108/jbs.2005.28826faa.001

Editor's note

The Journal of Business Strategy strives to publish articles that reflect more than fleeting trends. There can be hardly a doubt that corporate governance topics will be high on the agenda for years to come, which makes our three papers on governance issues especially welcome. A decade ago, corporate governance was an arcane field, but scandal has changed that standing considerably. Mainstream media, from daily newspapers to cable television, routinely cover corporate boards now that their activities are more transparent. On the other hand, it would be a mistake to think we know what really goes on in most boardrooms because many boards are notoriously secretive and give up their secrets only under duress or legal injunction.

In this issue of JBS we have a paper from Heidrick & Struggles, the search firm that specializes in senior level and board searches throughout the world, on its fourth biennial survey of corporate governance in Europe. The research is based entirely on public information but the findings may surprise readers, especially the rankings of countries.

Readers will also be interested to see how board practice in the ten European countries surveyed, which are very different from one another, differs from US practice.

Our second article comes from Bob Garratt, who for many years has consulted on board performance, with an emphasis on the UK. He is refreshingly critical of most directors, contending that they need to change their ways of thinking from an executive mindset to one more conducive to their role and responsibilities on the board. Garratt has written a number of books on board performance and heads a consultancy based in London.

Our regular columnists, Catherine Dalton and Dan Dalton, weigh in on another aspect of board practice in their column in this issue. They discuss the need for a single strong leader at the head of the board rather than the diffused leadership structure adopted by many boards today. All three articles reflect the new microscope focused on boards, where outside scrutiny is replacing traditional privacy. It is interesting to note how the judge in the Disney case (settled in August 2005) chastised the board, reprimanding it for conduct that “fell significantly short of the best practices of ideal corporate governance,” although board members did not actually violate their duties.

In our lead article, Arun Maira, president of the Boston Consulting Group in India, and formerly with the vast Tata Group, points out that strategy making is not purely objective. People are the ones who have to accept, endorse and implement strategy and their emotional reactions are part of the equation for success. For his most recent book, Remaking India: One Country, One Destiny, Maira receives accolades from reviewers, including Chanakya Sen in the Asia Times (January 22, 2005), who says Maira’s “unique perspective that inclusive development depends on serious dialogue is a welcome intervention.” The author believes, as he makes clear in this JBS article as well, that India needs to “unlearn prevalent ideas and adopt new processes of participative learning to include the average Indian in development parleys” (Sen’s words). Maira is a humanist and that comes across in his article on the need to include aspirational values in the strategy process.

In their paper on developing markets, three Marakon consultants describe the realities of balancing leadership practices and decisions between corporate headquarters (the center) and emerging, markets. The old patterns do not apply, and flexibility is key to sustained success.

Eric Olson’s view of risk is as expansive as the risks themselves. His article reviews almost every kind of business risk there is, providing a wealth of practical information on how to manage the seemingly endless number of risks companies encounter in the twenty-first century, from internet service provider partners who go bankrupt to supplier partners who don’t deliver. He includes many examples of companies that he has worked with at IBM and how they successfully identified and managed risk in the information age. Risk comes from every corner, from employees to senior executives who don’t know how to send e-mails. Olson warns that the actual occurrence or even the slightest hint of what he calls “non-transparency” can lead to lost shareholder value almost instantly.

In a philosophical vein with distinctly practical overtones, Scott Gallagher analyzes the business ethics debate, harking back to Milton Friedman’s early opinions on the subject. Despite all the talk today about ethics, it still is not apparent that behaving ethically is a primary responsibility of a public corporation. For business students especially (the author is a professor), the study of business ethics remains complex and mired in conflict.

We hope that you enjoy this final issue of 2005 and, with us, look forward to next year’s bounty of distinguished papers. Happy Holidays to all our readers.