A multi-stage model of governance in ... - Cass Knowledge

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Cass Centre for Professional Service Firms – Working Paper 004 - 2010 was then I suppose about seven hours of discussions…There was genuine hostility in tone against the entire management…There was absolutely not a single partner who spoke in favour of any of the proposals that were out there. (Business Group Head) Part of the second day of the conference had been set aside for the election of a new CEO. The current CEO’s term of office was coming to an end and he had already publicly identified his preferred candidate (Michael). However, responding to strong encouragement from many partners, a second candidate put himself forward (Alistair). I think our CEO … just assumed that his nominee, Michael, would be elected. But there was so much anger built up by the partners…that there was a strong sense that someone else ought to stand. Alistair was very different from the style of our CEO … much more consensus-building, much more sort of charming if you like, and much less hard than them. (Partner) Alistair was obviously seen as an anti-management candidate, even though he was on the Management Committee, whereas Michael – because he was the preferred candidate by the CEO - was viewed as the management candidate and therefore had lost before he started. (Business Group Head) Alistair gave a speech which, while light on specific details, contained the promise to ‘give the partnership back to the partners’. 32
Cass Centre for Professional Service Firms – Working Paper 004 - 2010 It was a brilliant speech. In about 30 minutes Alistair touched every single point of insecurity among the partners and said basically – don’t worry, everything is going to be all right. (Partnership Secretary) At the partner conference Alistair was elected CEO by a substantial majority. As one member of staff explains it: We sort of rushed headlong down a corporate-style approach and then rushed headlong, or rather arse-end, away from it. (Business Group Head) Over the next few years Alistair made concerted efforts to rebuild the sense of connection between partners and management. Shortly after his election, the titles of Managing Partner and Senior Partner were reintroduced to replace the titles of CEO and Chairman. He also went beyond such symbolic changes. In promising to ‘give the partnership back to the partners’, Alistair committed himself to an exhausting programme of dialogue with the global partnership group. His relentless international travel programme and willingness to listen to all partners’ concerns helped to allay partners’ fears across the global network and resolved the crisis of Disconnection. However, he found it difficult to translate this activity into effective action. In retreating from the ‘Corporate’ style of governance, Alistair had relinquished any possibility of exercising Delegated authority and had, in effect, reverted to a more Collegial style of governance. This collegial approach proved ineffective for a large global partnership. The partners became increasingly concerned as many merger-related issues remained unresolved 33
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