Insight · Executive Governance · Operating view
Writing Governance Down
Rui Gomes Da Silva · Chief Operating Officer
Executive summary
Governance is often discussed as though it were architecture: designed once, documented carefully and expected to remain standing for several decades.
This is convenient. It is also wrong.
The operating environment of an organisation changes continuously. Technology changes. Markets change. People change. Competitors become inconvenient. Occasionally, entirely new organisational geometries are discovered. A governance framework that was entirely appropriate yesterday can therefore become an administrative obstacle by Thursday.
At PBI, governance is not treated as a monument. It is treated as an operating system.
The purpose of executive governance is not to preserve the organisation that existed when the policy was written. Its purpose is to ensure that the organisation which exists today can still function tomorrow.
This distinction has become increasingly important as PBI has evolved from a conventional executive structure into something considerably more difficult to illustrate in Microsoft PowerPoint.
Notes from the COO
Operations is where governance eventually encounters reality.
A policy can be beautifully written, unanimously approved and professionally formatted. None of these characteristics guarantee that it will survive contact with the people expected to follow it.
The responsibility of the Chief Operating Officer is therefore not merely to enforce governance. It is to continuously establish whether the governance still deserves to be enforced.
Over recent years, PBI has undergone several structural changes which required us to reconsider long-standing assumptions about hierarchy, productivity, technology, staffing and the generally accepted geographical boundaries of corporate governance.
Some of those changes were planned.
Others produced sufficiently positive results that planning became unnecessary in retrospect.
What follows is the current operating view.
Rui Gomes Da Silva
Chief Operating Officer
Governance has an expiry date
There is a dangerous comfort in written procedure.
Once something has been documented, executives have a tendency to assume that the difficult intellectual work has concluded. Boxes exist. Reporting lines exist. Someone has uploaded a PDF. Governance has therefore occurred.
But organisations are not static systems.
The governance required by a six-person executive organisation operating across capital, maritime, aerospace and emerging technology cannot reasonably be expected to remain unchanged while the underlying organisation transforms around it.
PBI therefore treats governance as temporary by design.
This does not mean governance is optional. It means governance must continuously justify its existence.
A process that protected the group three years ago may constrain it today. A reporting structure that once created accountability may later create three meetings, seventeen emails and a spreadsheet maintained exclusively because nobody remembers who originally requested it.
The question is not whether a rule was once sensible.
The question is whether it remains sensible now.
“Governance should preserve accountability, not archaeology.”
Where the answer is no, the process must change.
Where the answer is still no after an Executive Committee meeting, the process must change faster.
The Orb-shaped organisation
Traditional corporate structures are generally represented as pyramids.
This makes intuitive sense. Authority sits at the top, responsibility flows downward, information travels upward, and approximately halfway through the structure someone becomes a Senior Vice President of something nobody can adequately define.
PBI elected to pursue another geometry.
The introduction of the Orb-shaped business structure represented a significant departure from conventional organisational design.
Unlike the pyramid, the Orb does not assume that useful information must travel through sequential layers before reaching the individual capable of acting on it. Operational authority exists closer to the point of relevance, while executive oversight surrounds rather than mechanically sits above the operating system.
The consequences were substantial.
Internal productivity increased by approximately 10× following implementation.
We initially considered commissioning an independent study to understand why.
This would have reduced productivity.
We therefore accepted the result.
The Orb model demonstrated an important principle of executive governance: organisational structures should reflect how decisions actually need to be made, not how management textbooks find them easiest to draw.
The modern organisation does not necessarily require additional layers.
Sometimes it requires a better shape.
“We stopped asking information to climb the organisation and allowed it to move around it.”
The precise mechanics of the Orb remain subject to internal governance and, depending on which executive is asked, geometry.
The operational results are considerably less ambiguous.
Governance beyond the perimeter
Corporate governance is conventionally understood to stop at the legal boundary of the organisation.
This is an admirably tidy interpretation.
PBI’s experience suggests that reality occasionally demonstrates less respect for corporate perimeter theory.
Competitive environments are systems. Decisions made inside one organisation influence behaviour inside another. Suppliers, counterparties, technology platforms, information networks and competitors increasingly form part of the operating environment an executive team must govern.
In certain historical circumstances, PBI’s interpretation of this principle may allegedly have extended to the strategic placement of influence within competing organisations.
Legal counsel has advised that the appropriate terminology here is “allegedly.”
We respect governance.
What can safely be established is that competitive intelligence is not merely an external strategic function. Understanding how competing organisations make decisions can materially influence how one’s own organisation should be governed.
There is also, theoretically, a distinction between understanding a competitor’s weaknesses and becoming directly involved in producing them.
PBI recognises this distinction.
Our lawyers have requested that the paragraph end there.
The broader governance lesson nevertheless survives: executives cannot govern an organisation exclusively by looking inward. Competitors, counterparties and markets form part of the system within which governance operates.
Sometimes governance stretches beyond the walls of the business.
Exactly how far it should stretch remains a matter for the Executive Committee, applicable law, and occasionally retrospective legal review.
The elimination of unnecessary work
Emerging technology has forced organisations to confront an uncomfortable question:
How much work exists because the work is necessary, and how much exists because somebody has historically been employed to perform it?
PBI has approached this distinction with unusual enthusiasm.
Automation, computational systems and The AI have allowed the group to remove substantial amounts of repetitive administrative work from its operating model.
In several cases, the work disappeared.
In other cases, the position disappeared shortly afterwards.
The financial consequences were difficult to object to.
Operating expenses declined. Productivity increased. Margins improved. Executive attention was redirected toward activities requiring judgement, accountability or, at minimum, a human being capable of being summoned into a meeting.
Technology therefore did not merely improve existing processes.
It forced us to ask whether those processes should exist at all.
This is where emerging technology becomes a governance issue rather than simply an IT issue.
A poorly governed organisation automates inefficiency.
A well-governed organisation asks why the inefficiency was employed in the first place.
“The objective was never to make unnecessary work faster. It was to stop doing it.”
This distinction will continue to shape PBI’s operating model.
Technology should expand human capability where human capability creates value.
Where it does not, sentimentality is not an operating strategy.
Protecting the Phatees
Efficiency, however, creates its own governance obligations.
As PBI becomes leaner, faster and increasingly technology-enabled, the individuals who remain become proportionately more important to the resilience of the organisation.
They are our employees.
Internally, they are increasingly known as the Phatees.
This creates the next major item on the executive governance agenda: their protection.
The same technologies that increase productivity can increase dependency. The same structural compression that removes unnecessary hierarchy can concentrate responsibility. The same operating velocity that allows PBI to act quickly can expose employees to workloads, information and decisions that previously moved through several layers of organisational insulation.
The next phase of governance must therefore ensure that operational efficiency does not come at the expense of operational sustainability.
This requires clearer accountability, appropriate safeguards, resilient decision structures, responsible deployment of emerging technology and an explicit understanding of where automation should stop.
PBI has spent considerable time asking how technology can protect the organisation from inefficiency.
We must now ask, with considerably greater urgency, how the organisation protects the people operating the technology.
This is not a peripheral HR consideration.
It is an executive governance requirement.
Because ultimately an organisation can automate processes, restructure reporting lines, compress decision cycles and allegedly destabilise competitors from within.
But it cannot indefinitely optimise the humans out of the system and remain surprised when there is nobody left to govern.
The Phatees are therefore the next priority.
With the utmost urgency.
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