We all wear many hats. Parent, leader, manager, spouse, friend, competitor all feature in some way or another. We get really good at switching these hats most of the time. Doing so ensures we are in the right frame of mind for the task at hand.
We take care to wear our parent hat when engaging with our children and not leader or competitor. We engaging on the sprorts field, we compete rather than parent.
In business this often becomes tricky. When we wear multiple hats that seem like the same thing because the outcomes are aligned. We wear the hat of shareholder, director, executive all at the same time.
These roles are different even though the outcomes are similar. This is so primarily because the accountability structure differs. Directors are accountable to shareholders to maintain the value of the business and grow it over time. Executives are appointed by directors to execute operationally what is required to accomplish these objectives.
When these are all the same people, authority and accountability become hazy and abuse becomes inevitable.
The easiest fix, appoint independent directors. There is a reason why the King reports recommend it.
