Headline: Hard for board to be brake and accelerator
Author: Lawrence Loh
Source: The Straits Times, 18 June 2011
Quote1:
The proposals in the Consultation Paper on revisions to the Code of Corporate Governance … drill down to the very mechanics of corporate supervision. … One issue that bears more discussion is the philosophical one of what the role of a company board is, in the context of corporate governance. …
Comment1:
This sets the context for the ensuing discussion, and pinpoints the matter of interest – the philosophical issue of the appropriate role of a company board. This falls clearly into the area of philosophy known as Business Ethics or Philosophy of Business.
Quote2:
In an entrepreneurial context, the board is often a vanguard, a torchbearer and a scout for the company. … The board assumes a key business function and helps to create value for the company. … But the worry is that boards may be constituted too much for control functions, and too little for value creation. …
Comment2:
This introduces the disjunction (an either-or situation) between a “value creation function” and a “control function” for the company’s board of directors. With reference to Quote1, the philosophical issue is clearly the relation between these two functions.
Quote3:
At its heart, there is an underlying tension in conceptions of the role of a company board. Is it meant as a control function (like a watchdog) or as a value creation function (to drive business)? A watchdog board will provide checks and balances on the management. … But there is a risk that this may impede agility that drives responsiveness and success. …
Comment3:
The disjunction is now clearly stated: Either (control) or (value creation). The stated risk suggests that the disjunction is exclusive (they cannot be both adopted). We now expect to see arguments for and against each disjunct.
Quote4:
No thanks to the recent spate of financial crises, the pendulum may have swung more towards control rather than value creation. Whether this is desirable is debatable. …
Comment4:
The disjunction, and the philosophical issue, is once again stated.
Quote5:
It will be hard to have a two-in-one role. It is like a car. It will be hard for a board to be both a brake and an accelerator at the same time.
Comment5:
The exclusive nature of the disjunction is repeated. It is a case of “either but not both”.
Quote6:
I am not advocating that we disregard the need for codes of governance in their current forms and thus throw the baby out with the bathwater.
Comment6:
The author does not completely reject the control function. Some control (the baby) is still needed. No explicit argument is presented for this. However, we can intuitively see that a company with no control function is untenable.
Quote7:
The more important consideration is to promote a code purposefully without losing sight of the essence of the business corporation. A code should not be so stifling as to kill the goose – the company – that lays the golden eggs.
Comment7:
On the other hand, ignoring the value creation function will result in the collapse of the company, and hence obviate any role for the board. This is an argumentum ad absurdum (reduction to absurdity), leading to the conclusion that the value creation function must also be served. So we need some control (Quote6), and some value creation (Quote7). How much of each?
Quote8:
There may not necessarily be a conflict of interest between the control and value roles of any board in itself.
Comment8:
In Quote3, the author says there is an “underlying tension” between the two roles. In Quote5, he says “it will be hard to have a two-in-one role”. Now we learn that this tension and difficulty is not necessarily so. Now it turns out that the disjunction is inclusive (either and possibly both).
Quote9:
The tradeoff has to be weighed intelligently and justified by its context, for any company to define the posture of the board.
Comment9:
It is possible to have both roles present, but they have a “zero sum” (tradeoff) relation. More of one will mean less of the other. Certainly the optimum must be sought intelligently. I am, however, perplexed by the phrase “justified by its context”. If each company’s optimum (between the board’s control and value roles) is particular to each company, then there is not much that a Code of Corporate Governance can specify.
Quote10:
The best prescription for companies is to do more with less, and create more value with less control.
Comment10:
The author’s philosophical position is now made clear: Boards of directors should play more of a value creation role than a control role. Given Quote9, the specific optimum point for each company is particular to that company. While the philosophical position is now clear, what about the supporting arguments? We have intuited an argument for the control role (Comment6). We have seen an argument for the value role (Comment7). We have not seen any argument supporting the claim that there is a tradeoff between the control and value roles. We have not seen any argument for the value role superceding the control role. The philosophical discussion is incomplete.
END
Monday 27 June 2011
Wednesday 22 June 2011
Should we seek or lose our selves?
Headline: Losing yourself in the pursuit of life
Author: David Brooks
Source: The Straits Times,1 June 2011
Quote1:
If you sample some of the commencement addresses … these days, you see that many graduates are told to: Follow your passion, chart your own course, march to the beat of your own drummer, follow your dreams and find yourself. This is the litany of expressive individualism, which is still the dominant note in American culture. But, of course, this mantra misleads on nearly every front.
Comment1:
This is Brooks’ thesis: that the mantra misleads. His argument is inductive – it takes the form of several examples. We consider each in turn.
Quote2:
College graduates are often sent out into the world amid rapturous talk of limitless possibilities. But this talk is of no help to the central business of adulthood, finding serious things to tie yourself down to.
Comment2:
The mantra says “limitless possibilities” whilst the reality is “seriously tie oneself down”. What is a possibility? The word “possible” means “it can happen”, not “it is very likely to happen”. Thus, while the statistical probability is that new graduates will quickly begin to “seriously tie oneself down”, it can still happen that others will pursue their “limitless possibilities” – and some will succeed in their pursuit.
Quote3:
Today's graduates are also told to … find themselves first and then … live their quest. But … most people … are called by a problem, and the self is constructed gradually by their calling.
Comment3:
The mantra says “find self, then live” whilst the reality is “live, then find self”. Brooks says most people are called by a problem. Problems are neutral. Any given problem will call some people, and not others. Who feels called by a problem is a function of the person’s self, not a function of the problem.
Quote4:
The graduates are also told to pursue happiness and joy. But … when you read a biography of someone you admire, it's rarely the things that made them happy that compel your admiration. It’s the things they did to court unhappiness.… It's excellence, not happiness, that we admire most.
Comment4:
The mantra says “seek happiness” whilst the reality is “we admire excellence, not happiness.” This reminds me of the hedonic paradox: that happiness cannot be pursued directly, only indirectly. Perhaps excellence is an indirect way of achieving happiness. Surely we cannot take the quote to mean that these people that we admire went actively in search of unhappiness – and that excellence was a by-product of that search.
Quote5:
Finally, graduates are told to be independent-minded and to express their inner spirit. But … doing your job well often means suppressing yourself. … Being a good doctor often means being part of a team.
Comment5:
The mantra says “be independent minded” while the reality is “don’t”. Progress is possible only if initiated by people sufficiently independently minded to go against the wisdom of the day. Witness Galileo, Edison, the Wright Brothers, Steve Jobs etc.
Quote6:
Today’s graduates enter a cultural climate that preaches the self as the centre of a life. But … they’ll discover that the tasks of a life are at the centre. Fulfilment is a by-product of how people engage their tasks, and can’t be pursued directly. … Life comes to a point only in those moments when the self dissolves into some task. The purpose in life is not to find yourself. It’s to lose yourself. -- New York Times.
Comment6:
The mantra says “self at centre of life” whilst the reality is “dissolve self into task”. Workaholism is a huge contributor to mid-life crises – when people suddenly realize they do not really know what they have been doing with their lives.
Comment7:
Taking an overall view, we must note that this is an inductive argument. It says that because the mantra misleads in so many cases, the mantra therefore misleads in general. I have considered the examples, and I am not convinced the mantra seriously misleads in these cases. But even if it did seriously mislead in these cases, there can still be uncited examples where the mantra does not mislead. What is needed in this argument is the additional premise that the cited examples cover the entire span of the mantra. However, such an additional premise is not provided.
END
Author: David Brooks
Source: The Straits Times,1 June 2011
Quote1:
If you sample some of the commencement addresses … these days, you see that many graduates are told to: Follow your passion, chart your own course, march to the beat of your own drummer, follow your dreams and find yourself. This is the litany of expressive individualism, which is still the dominant note in American culture. But, of course, this mantra misleads on nearly every front.
Comment1:
This is Brooks’ thesis: that the mantra misleads. His argument is inductive – it takes the form of several examples. We consider each in turn.
Quote2:
College graduates are often sent out into the world amid rapturous talk of limitless possibilities. But this talk is of no help to the central business of adulthood, finding serious things to tie yourself down to.
Comment2:
The mantra says “limitless possibilities” whilst the reality is “seriously tie oneself down”. What is a possibility? The word “possible” means “it can happen”, not “it is very likely to happen”. Thus, while the statistical probability is that new graduates will quickly begin to “seriously tie oneself down”, it can still happen that others will pursue their “limitless possibilities” – and some will succeed in their pursuit.
Quote3:
Today's graduates are also told to … find themselves first and then … live their quest. But … most people … are called by a problem, and the self is constructed gradually by their calling.
Comment3:
The mantra says “find self, then live” whilst the reality is “live, then find self”. Brooks says most people are called by a problem. Problems are neutral. Any given problem will call some people, and not others. Who feels called by a problem is a function of the person’s self, not a function of the problem.
Quote4:
The graduates are also told to pursue happiness and joy. But … when you read a biography of someone you admire, it's rarely the things that made them happy that compel your admiration. It’s the things they did to court unhappiness.… It's excellence, not happiness, that we admire most.
Comment4:
The mantra says “seek happiness” whilst the reality is “we admire excellence, not happiness.” This reminds me of the hedonic paradox: that happiness cannot be pursued directly, only indirectly. Perhaps excellence is an indirect way of achieving happiness. Surely we cannot take the quote to mean that these people that we admire went actively in search of unhappiness – and that excellence was a by-product of that search.
Quote5:
Finally, graduates are told to be independent-minded and to express their inner spirit. But … doing your job well often means suppressing yourself. … Being a good doctor often means being part of a team.
Comment5:
The mantra says “be independent minded” while the reality is “don’t”. Progress is possible only if initiated by people sufficiently independently minded to go against the wisdom of the day. Witness Galileo, Edison, the Wright Brothers, Steve Jobs etc.
Quote6:
Today’s graduates enter a cultural climate that preaches the self as the centre of a life. But … they’ll discover that the tasks of a life are at the centre. Fulfilment is a by-product of how people engage their tasks, and can’t be pursued directly. … Life comes to a point only in those moments when the self dissolves into some task. The purpose in life is not to find yourself. It’s to lose yourself. -- New York Times.
Comment6:
The mantra says “self at centre of life” whilst the reality is “dissolve self into task”. Workaholism is a huge contributor to mid-life crises – when people suddenly realize they do not really know what they have been doing with their lives.
Comment7:
Taking an overall view, we must note that this is an inductive argument. It says that because the mantra misleads in so many cases, the mantra therefore misleads in general. I have considered the examples, and I am not convinced the mantra seriously misleads in these cases. But even if it did seriously mislead in these cases, there can still be uncited examples where the mantra does not mislead. What is needed in this argument is the additional premise that the cited examples cover the entire span of the mantra. However, such an additional premise is not provided.
END
Subscribe to:
Posts (Atom)