Is it true that nothing is actually free? I'm not sure - literally nothing, a vacuum, costs quite a bit to make - you can get it free in space, but travelling there costs quite a bit. So you can find costs that you may have to pay for anything, but forget sophistry.
If you have a choice of whether to use a 'free' piece of software,
The real secret is to make sure that the cost is not one of your requirements. Cost on its own doesn't mean anything. Is a Rolls-Royce expensive? (no, it's a lot cheaper than a lear jet). What's important is the TCO - the Achilles heel of many cloud services is that you have to keep paying for them in five years time, when software you've bought has had four years in which to amortise the initial cost.
Even more important is the value/cost ratio. Developing your own solution may seem extremely expensive compared to buying an off-the-peg software package, but, if you base your development on a rock-solid open-source platform, then the fact that your software has been developed exactly to fit your requirements should make it better than any generic offering. So your cost/value ratio, in the long term, means that your TCO is tiny.
Tuesday, 19 August 2014
Governance - Why the roles of Chair & CEO cannot, and must not, be combined.
Governance is not ideology, at least, it certainly should not be. It is a way, evolved over time in response to real-world disasters, and successes, of achieving the best results for all stakeholders.
That's the important bit 'all stakeholders'.
That includes the general public, the regulators, the suppliers, the customers and the staff - as well as the shareholders, the directors and senior employees, such as the CEO, CFO, and so forth.
The roles of CEO and Chair of the board, should never be combined, it's vital that they are different people to prevent the conflict of interest that exists between the two roles. I think it's worse than poor governance and ought to be illegal.
Before the idea of the impressive titles of CEO came about, there used to be 'managing directors' - directors who had the task of managing, as well as being part of the governance team. That worked quite well, but had its share of problems - as does everything else.
It's worth remembering that one of the arguments for fascism, its main appeal, actually, is that 'it works' - it gets the trains running on time and keeps the riff-raff off the streets. This in middle-class terms is ideal, which is why fascism has always had, and continues to have, such a great appeal.
A company run entirely by one person, whether CEO, Chair, MD, owner or some combination, is like that, it works... or, it fails.
That's because 'things get done', as in a fascist state, the word of one person is law.
The problem, as people have been noticing for a long time, is that 'it works' from just the perspective of shareholders, or just the perspective of the middle-class majority, or just the perspective of the share price or any individual measure, is not good enough.
It is not OK for a company to succeed by:
- Bullying its suppliers
- Bullying its customers
- Bullying its staff
- Ignoring regulators, laws, standards, safety etc.
- Bribing any combination of these
- Industrial espionage - yes, even competitors are stakeholder
These may all give the appearance of 'success', but are all, in fact, failures in the company as a human institution.
Governance is there to ensure that there are checks and balances to the skewed approach that results from only one person being in control.
Naturally, if it is a one man company, then only one person will be in control, and will prosper and suffer for his own errors or successes. Similarly for very small companies, the individual running it, or a collaboration, works, and the company succeeds, or fails, and it doesn't.
For a medium-sized or large company, this isn't good enough. As I said at the start, instead, governance is essential so that the best value is delivered to all stakeholders.
That's the perspective. Summed up in the idea that a company must be a good corporate citizen. Yes, it must make money for its shareholders, but also, it must obey the law, comply with standards, such as those for health and safety, and it must treat its suppliers, staff, customers fairly.
To achieve this, it is necessary to have a properly governed company, with the board governing, and the managers managing.
To give just one practical example:
Carly Fiorina was able to destroy Hewlett-Packard precisely because she was not only employed as CEO, but also put in the role of President of the Company and Chair of the board - there was nobody who could prevent the disaster. It was so bad that the HP board eventually sacked her - something that's almost unknown. If they'd just had her as CEO, the damage could have been contained and a strong chair might even have helped re-direct her to doing a proper job - I personally doubt that, because she was the wrong person for CEO, but it'd have been far less damaging than the disaster that it actually was.
Naturally, separating the roles doesn't prevent malfeasance, but it adds an extra bit of protection against it.
That's the important bit 'all stakeholders'.
That includes the general public, the regulators, the suppliers, the customers and the staff - as well as the shareholders, the directors and senior employees, such as the CEO, CFO, and so forth.
The roles of CEO and Chair of the board, should never be combined, it's vital that they are different people to prevent the conflict of interest that exists between the two roles. I think it's worse than poor governance and ought to be illegal.
Before the idea of the impressive titles of CEO came about, there used to be 'managing directors' - directors who had the task of managing, as well as being part of the governance team. That worked quite well, but had its share of problems - as does everything else.
It's worth remembering that one of the arguments for fascism, its main appeal, actually, is that 'it works' - it gets the trains running on time and keeps the riff-raff off the streets. This in middle-class terms is ideal, which is why fascism has always had, and continues to have, such a great appeal.
A company run entirely by one person, whether CEO, Chair, MD, owner or some combination, is like that, it works... or, it fails.
That's because 'things get done', as in a fascist state, the word of one person is law.
The problem, as people have been noticing for a long time, is that 'it works' from just the perspective of shareholders, or just the perspective of the middle-class majority, or just the perspective of the share price or any individual measure, is not good enough.
It is not OK for a company to succeed by:
- Bullying its suppliers
- Bullying its customers
- Bullying its staff
- Ignoring regulators, laws, standards, safety etc.
- Bribing any combination of these
- Industrial espionage - yes, even competitors are stakeholder
These may all give the appearance of 'success', but are all, in fact, failures in the company as a human institution.
Governance is there to ensure that there are checks and balances to the skewed approach that results from only one person being in control.
Naturally, if it is a one man company, then only one person will be in control, and will prosper and suffer for his own errors or successes. Similarly for very small companies, the individual running it, or a collaboration, works, and the company succeeds, or fails, and it doesn't.
For a medium-sized or large company, this isn't good enough. As I said at the start, instead, governance is essential so that the best value is delivered to all stakeholders.
That's the perspective. Summed up in the idea that a company must be a good corporate citizen. Yes, it must make money for its shareholders, but also, it must obey the law, comply with standards, such as those for health and safety, and it must treat its suppliers, staff, customers fairly.
To achieve this, it is necessary to have a properly governed company, with the board governing, and the managers managing.
To give just one practical example:
Carly Fiorina was able to destroy Hewlett-Packard precisely because she was not only employed as CEO, but also put in the role of President of the Company and Chair of the board - there was nobody who could prevent the disaster. It was so bad that the HP board eventually sacked her - something that's almost unknown. If they'd just had her as CEO, the damage could have been contained and a strong chair might even have helped re-direct her to doing a proper job - I personally doubt that, because she was the wrong person for CEO, but it'd have been far less damaging than the disaster that it actually was.
Naturally, separating the roles doesn't prevent malfeasance, but it adds an extra bit of protection against it.
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