This article first appeared as an article for the Institute of Directors.
“Books became my go-to solution.” A transformational read on liberalism and why boards should welcome ideas but stay focused on purpose.
Jim Donovan CFInstD describes himself as a ‘retiring’ professional director who now holds just one board role – independent chair of the New Zealand Utilities Advisory Group Inc, a forum representing the network infrastructure sector that advises the Minister for Infrastructure on improvements to the legislative framework governing the sector.
As a CEO, he led major transformations at the helm of power company Electra, IT services firm Fronde, and telecommunications manufacturer Deltec. He has also held a wide range of company, industry, and government board roles – including chair of Crown-owned telecommunications company REANNZ. And he is a former IoD board member and mentor.
This week, he shares a transformational read and explains why boards should welcome ideas and innovation.
What is the name of the governance or business book (or other media) that inspires your thinking as a director?
Early in my leadership career, I was often asked my opinion on matters beyond my own experience and education. I bluffed confidently, but I eventually realised that wasn’t a productive strategy. Books became my go-to solution.
I have a collection of favourite business and leadership books that helped shape my thinking, but whether you’re considering your own organisation’s future or contributing to a broader arena, it helps to understand the wider social, economic, historic, and political context in which you operate. The book that most epitomises this learning for me is Liberalism – the Life of an Idea, by British journalist Edmund Fawcett.
First published in 2014 (with a second edition in 2018), it is a highly readable history of the development and adoption of social, economic and democratic liberal ideas, particularly over the past 200 years. "Liberalism" is used here in the European sense, rather than the contradictory left- and right-wing meanings applied elsewhere.
How would you describe the style of writing?
Fawcett has written for some of the English-speaking world’s most respected newspapers and magazines, including The Economist and the Financial Times. He is a skilled communicator, able to combine meticulous research with interesting narrative, accessible prose, and meaningful summations. His writing is balanced and non-dogmatic – you’d be hard-pressed to find much evidence of his personal ‘left-liberal’ leanings.
What drew you to the book?
In my industry and government board roles, I’d been struggling for some years with politics and politicians. I found the inconsistency, incoherence, short-termism, and occasional self-interest frustrating. I felt I had better ideas to offer, but realised I lacked the philosophical grounding to express them – I was just another ‘business type’ offering managerial solutions. When the second edition of Fawcett’s book was released, accompanied by favourable reviews, I bought a copy to improve my understanding.
What resonated with you the most?
It was a transformational read, bringing together the jumble of knowledge I’d accumulated over many years into a coherent framework that appealed to me as a systems engineer. In a nutshell, Fawcett boils the fundamental tenets of liberalism down to four principles:
- Respect for rights (including personal equality, freedom, property, and contracts)
- Conflict and competition in ideas and markets
- Protection against the abuse of power
- A belief in progress.
He delivers a condensed yet rich history of how these often-competing ideas developed and were applied. In effect, it is a ‘one-book’ course in philosophy, politics, and economics. It encouraged me to read and learn more – and to reconsider some of my prior beliefs, developing a more coherent personal and political ethos.
What have you taken away from this book that continues to influence your board roles?
A good director looks for long-term trends, challenges, and opportunities. Understanding the broader social, economic, historic, and political context helps you to frame ideas more effectively – especially when you engage with policy-makers – and to challenge others when their actions are inconsistent with the principles they claim to support.
How does reading or listening to podcasts feed your practice?
I’ve never really gotten into podcasts, although I’ll listen if one is recommended. I am a voracious – albeit critical – consumer of ideas and trend-spotting. I read widely online, including commentary from institutions and thinkers I respect, often with views different from my own.
I curate my social media and news feeds intentionally, rather than relying on algorithms. I also use search engines and AI to explore new topics – but as pointers to source material, not as the definitive word.
For deeper understanding, I still prefer a well-written book. The arguments are clearer, with greater depth and analysis. I usually go for books designed to inform rather than preach, written by respected journalists or academics with a flair for communication.
When you’re not reading about governance, what kind of books do you enjoy?
I always have books by the bed – fiction and non-fiction. On the non-fiction side, it’s usually history with a socioeconomic or technology theme. For fiction, I enjoy history, mystery or spy novels.
What governance issues are top of mind for you, and why?
Unlike many, I’m not scared of cyber-security and AI issues. They should be catalysts for innovation, improvement, and growth. While disruptive, they also present huge opportunities. My core governance questions remain unchanged: what are our real challenges and opportunities? Is our ambition big enough? And do we have a credible strategy and team to deliver it?
What has surprised you most about yourself – and others – while serving on boards?
I loved being a CEO. You align the board and team behind a strategy, and act as chief architect and project manager. With that comes responsibility, but also a level of authority and autonomy unmatched by other roles.
What surprised me was how collegial I am as a director. Most directors I’ve worked with share that collegiality. You can still lead and challenge – especially as chair – but it’s different from being a CEO. I now enjoy working alongside colleagues to support the CEO and management team to succeed.
What would you like to see more of at the board table – and why?
Boards should welcome ideas and innovation, but they would do well to remember yachtsman Sir Peter Blake’s acid test – will it make the boat go faster? It’s easy to become distracted by compliance, history, fads, or causes that no-one will remember if you fail to deliver on your core purpose.
It can take courage and conviction to start or stop doing things, or say no to funders, customers, or staff. Boards must stay focused on why the organisation exists and be able to tell that story clearly.