The Fish Rots from the Head — Book Review

 

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Estimated reading time: 3 minutes

 

Bob Garratt’s The Fish Rots from the Head: Developing Effective Board Directors is an impassioned treatise on achieving effective corporate governance. Garratt offers an enthusiastic discussion of how boards can develop the requisite skills and approach and defy the potential problems and failings of corporate governance. Garratt particularly focuses on how the serious insufficiencies of some boards have negatively affected or caused the failure of organisations they govern. Garratt asks readers to appreciate the board’s determinative role in the success and effectiveness of an organisation. The Fish Rots from the Head is well respected and has been widely used in the governance world since it was first published in 1996. The third edition of this title, released in the wake of the global financial crisis, investigates the negligence of corporate boards in that crash. Whilst this may not be specifically relevant to most non-profit directors, the importance of ensuring that directors have the requisite skills for their role is a message that is applicable to all board members.

 

One of the few positives to come out of the continuing global financial crisis is the final awakening in the public’s mind that there is a strong possibility that those elected or selected to guide our organizations in the private and public sectors may not be very good at their job.”

 

Bob Garratt is a consultant in corporate governance and board development, described by the book’s publishers as a “pracademic”. He has held a number of senior academic positions and served as Chair for a number of boards. Garratt brings a light and irreverent tone to this serious topic as he bemoans the lack of competent and sufficiently diverse board members. The Fish Rots from the Head guides the reader through some serious and arguably dire case studies, but the redemption of effective and informed corporate governance shines through as a beacon of hope. A discussion of some of the basic tenets of corporate governance and the need for the reassertion of their importance. Garratt argues that campaigns for the corporate governance to become a respected practice and Garratt encourages readers to re-envision governance and champions getting in touch with the basics and ensure that all directors have a strong understanding of the history of business terms and ideas.

 

Directoral competence — independence of imagination and thought, as well as the nous to run an effective enterprise — will determine an organization’s success.”

 

The majority of The Fish Rots from the Head is taken up in the explication of Garratt’s theory of the learning organisation and learning board. This theory involves developing an environment in which both the board and the organisation as a whole can learn, change and grow in relation to the rate of change of its external environments. The board is central to this process as the “central processor of the business brain” and relies upon smooth cooperation and communication with the organisation as a whole. Diversity of directors, well-established skillsets and regular turnover of members is vital to this process and to breeding an environment of equitable debate and decision-making. This section is followed with an expansive discussion and demonstration of the workings of a learning board, including how to balance the range of tasks and distinct intellectual viewpoints the board must balance and models they can use to organise and inform their practices. Finally, Garratt supplies a range of insightful stories and case studies demonstrating his ideas in practice.

 

The Fish Rots from the Head is suitable read for a board that is struggling or failing. It will help to re-energise the board and re-shape their way of thinking; whether that means overhauling the board, redeveloping skills or putting in place more robust structures and systems. It is a compact book that, unlike other instructional volumes for directors, does not seek to teach specific skills such as reading financial statements or fundraising skills, but offers a framework for redeveloping the board and maximising effectiveness in a global and long-term manner. Garratt is quite self-assured in his opinions and those looking for a guide to the basics of governance might not appreciate some of Garratt’s more didactic assertions. Despite this, the book is thorough and sincere and reassuring because Garratt is clearly passionate about the importance of boards. He determined to offer what he feels is the most cogent direction and encourage robust system to bolster boards as they develop into the future. With The Fish Rots from the Head, Bob Garratt encourages readers to reassess what they know about corporate governance and for boards and directors to ask more of themselves.

 

Published by Profile Books, 2010. 332 pages.

About Julia Duffy

Julia is a writer and researcher at Better Boards. She has a passionate interest in the non-profit sector, particularly its legal and regulatory complexities and she follows all news and developments in this area keenly. Prior to joining Better Boards, Julia served as an intern at Philanthropy Australia. Julia has a Bachelor of Arts from the University of Melbourne, majoring in Political Science and English Literature.

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