It’s never a good idea to proof your own work

Shooting the Breeze

10 January 2019

The controversy unearthed in 2018 surrounding large consulting firms teetering on the conflict of interest edge with their mates in banking has certainly raised eyebrows in many circles. It’s left me baffled, that’s for sure, and reflecting on how I know there is something very wrong with this picture.

My first ever ‘real’ job was as a magazine journalist. While pretty scrappy, I could write some serviceable copy that was informative, but often missed the mark on delivering a truly engaging article. After a couple of years hard work, I ended up being promoted to editor and this is where things started to fall into place. I discovered that I was far better at refining someone else’s raw copy, which concurrently shed light on the journalist/editor relationship and my greater understanding of publishing.

Learning to appreciate that division of tasks and skill will lead you to a higher quality outcome has stuck with me throughout my career. Of note is with my work on boards, where I’ve learned to value the contributions of my non-executive directors when in a CEO role. As CEO, I may have the vision for the company and be hands-on as a day-to-day executive, but I still rely on others. I need people I respect from diverse backgrounds to offer me sound, objective advice to calibrate with on a regular basis to ensure rigour on key business decisions.

Equally, when I find myself in boardrooms as a non-executive director, I’m able to slot into that impartial persona because I’m not as attached to the work behind the business case. This gives me greater power to probe with objectivity and a broader vision, arming the company’s executive team with additional considerations from their proposed activities. It’s funny, when you remove the benefit of being ‘right’ and personal agenda goes out the window, objectivity reigns and forms a critical part of acting in this non-executive capacity.

"When there is an obvious financial imperative of a company implementing or creating the software then they cannot objectively rate their performance. "
Ashley Howden

I’ve seen this play out in governance of IT transformation projects as well. If someone is cutting code or implementing a software application, it’s impossible for them to review and test the code or provide impartial assessment of how the implementation is progressing. When there is an obvious financial imperative of a company implementing or creating the software then they cannot objectively rate their performance. The conflict is overt and absolute. Chinese walls in these scenarios don’t work. The potential for internal reciprocity, and the lure of personal gain, by the service provider will surely impinge upon their ability govern and advise the client.

Back to the current affair – it stuns me that so many parts of corporate Australia willingly allow themselves to believe the fairy tale read to them by large consultancies. That somehow their scale provides peace of mind that they are able to divide their personality to the point where the hundreds of millions of dollars fed to them to implement a new IT system is then given a safety of accountability by the same consultancy, to the tune of tens of millions! It’s like giving a gambling addict an open line of credit in a betting app and then paying them a salary to make sure they bet responsibly.

Looking at the issues with corporate governance emerging in Australian companies in recent times, it would appear that more stringent external governance is needed. With IT spend on the rise, surely we should see independent assurance and advice on the rise as well? Not just quasi-independence as lip-serviced by the Big 4. In my experience, this is the only way to ensure that corporate Australia is able to transform itself appropriately and without harming its customers.

Edmund Tadros from the AFR has been keeping abreast of the story

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