Traditional project governance is used to describe the rules and processes that are required to ensure a successful project. Traditional management and governance is about milestones and schedules where Agile is about business value and deliverable products. Traditional governance tries to manage the project work as process work. When we think of corporate governance it is the sum value and processes that are used to protect shareholder and stakeholder value. Agile practices maximize a product’s value. One of the lowest levels of governance in Agile is automated testing. Automated testing save time, reduces risk and increases predictability. Creating predictability is part of the Agile value. Most people who work with Agile know that automating system testing is essential, but they also realize that it is very easy to fail in doing so. What makes test automation so hard within the agile context is that the test object is constantly changing since it is gradually refined over sprints. If there is anything a test automation engineer is afraid of, it’s constant changes and the resulting high level of maintenance.
Despite these difficulties, the hard truth is that without automated testing, it is not possible to work Agile in full, at least not with frequent high quality deployments.
Gender Diversity and Agile on Corporate Boards of Directors
Quotas, term limits and outright recruiting are methods are ways to rotate people off of boards and make room for others. Ways to see more women or minorities moved onto corporate boards go outside the existing board to find new members. There is so little diversity on boards because board members will tend to recruit their friends. Organizations that use recruiters and outside resources outside of their acquaintance will lead to more diverse membership. In organizational context, having an outside resource will help determine what the board needs and then find those people. This is a strategic approach to board recruiting as opposed to the invite your friends to join model. Defining who is needed or a skill set that is missing will help contribute to a population of directors with more to contribute than simply recruiting your buddies to be on with you.
Is there more to diversity than gender and ethnicity? Sure. Like what is a person’s background or expertise. An accountant will see the world differently than will a salesperson or lawyer. A larger population of experts from different professions will benefit the organization. Another example is geographic diversity. Asian companies are looking to recruit Americans to their boards so that they can start to understand the U.S. market better. Recognizing that to expand in the U.S. they have to understand how decisions get made in an American household are what are motivating them. One example Ryn mentioned was a financial services company. They were not aware that the woman in the American home made most of the money decisions and their board was all male.
Student board members are another idea for diversity. When a school’s student population can see that their interests are represented on a board they are more likely to be loyal to that brand.
Activism from Shareholders
Are these the conscience of business or merely a distraction? Capitalism resonates with Americans from an emotional point of view. Every dollar we spend is a vote for the world that we want. Make spending decisions accordingly. If you want to support the values of certain companies, patronize them! If the values of Apple, Whole Foods, and Amazon resonate with you, spend your money with them. If you are unhappy that American industry is moving offshore, do not shop at Walmart. You can literally take your money and vote for the country or world that we want. We are not passive or victims.
Democratization of the stock market started in the 1970’s and expanded the opportunities to invest in companies that reflect individual values. We can now put a monetary value on a brand. Coca Cola among others, had to change their business model because of investments they were making. From this point of view, everyone is an activist. Though not everyone is aware of their status and the impact they can have with their resources.
Cyber Security and Governance
Regardless of the type of business anyone is in, cyber security is now a permanent part of the scenery. While Agile will not specifically lead to better governance and security it will shorten the “learning loop” by invoking the MVP model of invent, test, change etc.
There are Agile teams that are devoted to the issue of security and they benefit from the process. You can have absolute security, but nothing will ever go in or out of the organization. Similarly, being completely open is not an option as nothing is secure. Agile teams devoted to security can act effectively in weeks instead of months. Agile security teams are extremely successful because of the Agile process.
Agile is very good at security breaches with an approach called “swarm”. Agile teams are standing teams. They are always in existence. Sow when there is a security breach, everyone stops what they are doing and works on a single issue. In this case it can be security. Slow responses to breaches like the ones from Sony or Target take far too long to resolve.
The Board’s Job Evaluation
Does the board of directors get a Job Performance Review? How are they held accountable? The primary way is through the shareholders. With private companies its with the stakeholders and customers. Primary equity holders will initiate a board review if performance is off. Fortune 100 companies are the ones we think about but all corporations have boards and those are almost never evaluated and individual performance is very rare.
Shareholders rarely vote which is too bad because it another element of democracy in action as part of the capitalist system. Employees and retirees proxies are signed over to their designated representative or to their 401K managers. A lot of 401K’s require participants to automatically sign over their proxies to belong and most people are not aware of this. This probably accounts for why so few changes are ever made. Ryn says that you can contact the management office for a lot of these organizations and ask for the opportunity to vote.
Wynn Resorts and Governance
Steve Wynn is trying to force his ex wife off the company’s board. While she is a founder and 3rd largest shareholder she and Steve cannot co-exist, so Steve and the other members are essentially kicking her off by reducing the number of seats from 8 to 7. This is really nothing more than a family business with predictable squabbles that arise when marriages end. Under the current CEO, Steve Wynn, the company has not performed well. So fire the CEO? Not likely as the reason Wynn is still CEO is he is the majority shareholder and always votes for himself.
In situations like this, there is not the governance available because the majority shareholder is in conflict of interest, he cannot be objective. The board is prevented from doing any real governance. According to Ryn, kicking the ex off is just a symptom and not the disease. Wynn can’t possibly be objective and his board is prevented from doing anything because they do not have the votes. In this and similar situations, the company will underperform. There are layers of bad behavior involved here. None of this is in the interest of Wynn Resorts or their employees, customers or other stakeholders. The leaders at Wynn are not focused on the right things. For those involved or thinking of investing, patronizing, or going to work there maybe think again.