The Fish Rots From The Head: The Crisis in our Boardrooms: Developing the Crucial Skills of the Competent Director

by Bob Garratt

In the nearer field are the contractual or operational stakeholders, prominent amongst whom are the staff and the suppliers. These are the people who keep the day-to-day work flowing through a mixture of contracts, cash and goodwill. Curiously, they are rarely acknowledged in current thinking on corporate governance and are seen to have little bearing on the big owner/director issues. Yet without them the organization does not operate effectively or efficiently. They are fundamental to customers’ or users’ experience of the organization. They are the ‘moments of truth’ that build or destroy a brand. They reflect the emotional temperature of the business – whether dour and uninterested, full of patently false bonhomie leading to redundant intimacy, or genuinely keen to solve a problem. These contractual stakeholders are fundamental to delivering good service through the service profit chain,97 and it is on their learning and goodwill that companies must rely in hard times. The key governance question is how can they be brought into the corporate governance orbit? And the simplest answer is by treating them as the frontline of the cybernetic feedback and learning system that continuously adds value to your brand.