What if Corporate Boards Acted Like Google?

Published by

By Julie Garland McLellan*

Garland McLellan

Julie Garland McLellan

Jeff Jarvis’ latest book ‘What Would Google Do’ envisions the ways in which running businesses the way Google is run would change industries. It is impossible to read this book without having a few innovative ideas of your own. It got me thinking ‘What would Google do if they regulated boards or designed corporate governance systems?’

Here are some ideas:

Give shareholders control – in theory this happens at annual general meetings (AGMs). In practice the process stultifies the content and the exercise is often an empty formality. The AGM could be webcast and votes cast remotely after hearing the arguments for and against each issue. Chat rooms could allow shareholders to communicate with each other and the board on issues.

Life is a beta test – instinctively, when we make mistakes, we feel embarrassed. We shouldn’t.  A board that truly values innovation or creativity should be out pushing the boundaries of what is possible and failing a little from time to time.

Don’t be evil – Google’s founders wrote, before their IPO, “We believe strongly that in the long term, we will be better served – as shareholders and in all other ways – by a company that does good things for the world even if we forego some short term gains.” Wow!

Elegant organisation of data – When you type a search into Google you get back a simple list of relevant sources of the information sought. There is no clutter, no distracting graphic, and the sources are ranked in order of likely importance. Why aren’t board papers presented like that? Why don’t corporate boards report to their shareholders like that?

Meritocracy wins – In boardrooms, it is often the sad case that directors are selected because of what they have done in the past and with insufficient real analysis of what they will provide to the board in the future. On Google data is realtime; imagine if we could constitute boards that had access to the best expertise on any topic, instantly, as required. How would that affect quality of data, independence of thought and speed of reaction?

Better searching of previous information – With Google a board could call up such board governance data instantly and use it to support decisions. A system for tracking and reporting dividends and share purchases or sales when annual tax returns are being drawn up would remove the potential for errors and inaccurate reporting of dates, quantities and assessable imposts. Shareholders do not want impersonal reports that are delivered months after the end of the financial year; companies can close of their accounts faster and shareholders expect faster reporting with greater customisation.

The impact of the Google mentality upon regulators and judiciary is also apparent; these institutions are using sophisticated search and tracking to catch inconsistencies in reporting and recording data. The ability to cross check and match large data sets will change the corporate compliance and reporting environment.

Love it or loathe it, the ‘Googlisation’ of corporate boardrooms will have an effect on directors that may be as profound as the effect of globalisation of business.

Julie Garland McLellan is a practising company director with experience on a range of boards including public listed, non-profit and government sector organisations. She is also a boardroom consultant and the author of Dilemmas, Dilemmas, a book of practical case studies for company directors. Julie will be presenting at the NACD conference in Washington on the topic of “Digital Directorship”.

Register to the NACD Conference, 2010

Register Today

2 Comments

  • Great and thoughtful comment, Mark!
    Thank you. I totally agree that trust is a fundamental to good boards; we earn it, must grant it wisely and can lose it in a flash.
    In England the stock exchange has a motto ‘my word is my bond’. It should be aspired to by all directors of companies listed on any exchange everywhere (and by all brokers), treasured when you get given it and defended mightily if it is threatened. I wish we had that here in Australia and also that we had ‘trust’ on our daily currency as you do.
    The idea of showing investors hat you are trustworthy is a great one. If only our disclosre regime could make that aparent..
    Will you be at the NACD Conference? If so I look forward to making your acquaintance there.

  • Mark Guay says:

    The “how to” do it is a good start so I applaud Google but I think ultimately its about one word. The term is written on the back of a dollar bill. D.H Lawrence wrote a love poem about it. Stephen M. R. Covey wrote a famous business book about the “speed” of it. Ronald Reagan used it to describe our nuclear position with Communist Russia. General Robert E. Lee used the term to describe leadership traits. And Mother Theresa used it to describe her relationship with God. What is this term that all these powerful people have used so eloquently? The term is simply “trust”.

    Why has Wall Street still not convinced investors to get back into the “shareholder” game? Simply stated, they lost our trust. How do you regain trust? As they say in my wife’s home state: “I am from Missouri – you have got to show me.” Perhaps simply asking investors how may also be a good start.