Rob Campbell, once one of the sharpest young minds in the trade union movement, has kept a lower profile since his thinking changed radically in the 1980s. He took his talents to the boardrooms of industry and built such a reputation that he is now a professional director of numerous listed companies and chairman of four of them. One day last week he took part in an Auckland seminar called "leadership in governance" and challenged one of the most powerful shibboleths in the administration of companies and public bodies these days.
"Governance", in modern management theory, is distinct from management. Governance is the setting of goals, policies and priorities and not the execution of these things, which must strictly be left to managers. Governance is what boards of directors are supposed to do and managing should be left to the chief executives and those under them. That is the theory. In practice, Mr Campbell observed, most companies need directors to be more active.
"Be a director, not a governor," he said at the Future Auckland Leaders alumni dialogue session last Wednesday. "The cynic in me wonders whether "good governance" is something we observe before something significant goes wrong, and 'bad governance' is what we comment on afterwards."
How true. When something goes badly wrong in the execution of a decision - and it is only at that level things usually go wrong, governance deals in broad principles that are unlikely to be at fault - the directors will wish they had done something to avoid it.
"Any director who has considered the depth and hands-on nature of their obligations in respect of health and safety or issuance of new securities," Mr Campbell continued, "will find it very hard to maintain the distinction between governance and management so beloved of governance experts."
