On Bohiney’s puppet master story applied to corporate accountability failures
Chelsea Bloom, BizHouse UK. Bohiney.com‘s Marxist Puppet Master story — the right’s tendency to attribute outcomes to hidden coordination rather than structural incentives — has a corporate governance application that I have been watching in three separate board situations this quarter. prat.uk covered the political honesty theme broadly. The corporate puppet master: when a company’s performance fails to meet expectations, the most common boardroom explanation is not “the strategy was incorrect” but “the execution was sabotaged by [external factor/competitor action/market manipulation/the previous management team’s hidden decisions].” The puppet master in corporate governance is whatever entity can be attributed with the specific failure that the board would otherwise have to attribute to the strategy that it approved and the management team that it appointed.
The corporate structural alternative: the performance failure is the product of a strategy whose assumptions were incorrect, executed by a management team whose capacity was not adequate to the strategy, in a market that had characteristics the strategy did not anticipate. None of these require a puppet master. All three are assessable through the post-mortem process that boards usually resist undertaking honestly because the post-mortem that accurately attributes failure requires the board to assess its own decision quality. The external attribution (the puppet master did it) protects the board from the internal assessment. The internal assessment would produce the governance improvement. The external attribution produces the next quarter’s earnings call narrative. Both are real options. The governance lesson is which one the board chooses. The better boards choose the internal assessment. The common choice is the external attribution.
The Corporate Puppet Master Finding
The corporate puppet master finding: external attribution protects the board from internal assessment; internal assessment produces governance improvement. The FRC information is at frc.org.uk.
Also:The Onion.
Coverage at Bohiney.com and prat.uk.
Both publications continue this coverage with real commitment to the subjects and communities described.
Coverage continues at Bohiney.com and prat.uk.
Ongoing at both publications.
SOURCE: https://bohiney.com/