From the multi-talented James True:

Around the world, governments are under increasing pressure from their unions, manufacturers and farmers to re-erect trade barriers and instruct government agencies to buy local.  In times of economic crisis, that’s the worst possible thing to do.

Buying imports enables others to buy your exports.  In general, providing you live within your means, trade tends to balance out, and the more trade the merrier for everyone. You sell more of what you’re good at, and buy more of what others are good at. There’s possibly an argument to be made for temporary specific protectionism when you’re building a new industry which will be genuinely globally competitive once it has achieved scale and the barriers are removed; but generally, protectionism only transfers wealth from consumers and taxpayers to uncompetitive local suppliers.

Whether it’s in response to calls for US highway builders to use US steel, the NZ Army to buy locally made wet-weather-gear, or British hospitals schools and prisons to buy only British meat fruit and dairy products, governments must not yield to popular pressure (and their manufacturers’ and farmers’ naked self-interest).  Otherwise, as the chart shows, things will only get very very much worse. The Great Depression of the 1930’s may have been triggered by a stock market crash, but it was made many times worse by well-meaning protectionist initiatives and retaliatory moves by other countries.  World trade plunged by two-thirds, industries collapsed, and many millions were thrown into the breadline.  Let’s not even start going down that slippery slope.

It seems like every country has organised some variant of “Jobs Summit” where the great and the good are invited along to generate ideas for getting the economy back on track. Having attended a few such events over the years, I’ve learnt that they follow a predictable pattern.

The day starts with coffee and chatter while everyone arrives. Following a welcome by the summit chairman (usually a business leader or noted academic), the top politician tells you gravely about the challenges ahead, the resolve of the government to meet them, and the importance of the advice you will be giving. You then hear various economic briefings and snappy thought-starter presentations (not too heavy, not too light) from respected figures.

Next you divide into workgroups which focus onto specific themes.  In the breakout room, the group hear another briefing related to their theme.  A  noted CEO, a mid-ranked minister, or a professional consultant facilitates a discussion to generate ideas, assess them and rank them for effectiveness.  Everyone regroups, where the facilitators report back each group’s conclusions.  There’s usually a bit of clarification and discussion, before a plenary session tries to pull everything together.  The day ends with some drinks and networking, while the senior politician, the summit chairman and the leading business lobby group representative make warm and encouraging noises for the media that “the government has got lots of ideas to follow up”.  It’s not unusual for the government to “respond to suggestions” with some new initiatives announced during the plenary session or the closing addresses. And then everyone goes home.  For months afterwards, you are deluged by letters from ministers telling you what they’re doing. You start to suspect that there’s a secret cabinet prize for who’s got the longest list of initiatives and programmes; “many small” beats “few large”.

Do these events generate new ideas? Very rarely; the same ideas, issues and prejudices get trotted out every time. Do they get people in the room who otherwise would rarely talk to each other?  No; these are the great and the good; they meet in various forums all the time; they have access to government, directly and via industry bodies.  Are new initiatives generated as a result of the forum? Again, very rarely. Those industry bodies work with government policy people all the time.  Anything announced as a major new initiative will have been worked on behind the scenes for some time already.

So why bother? Is it just window-dressing?  In part, yes; most leaders know that driving strategic change requires some stage management. The true value of these events is a signal that something is being done, that someone has taken charge and is attempting to deal with the situation, and is building goodwill and consensus around what needs to be done.

In other words, it’s all about confidence, and you might need a shot of that right now.

Here’s a move by a bank that’s bound to rebuild some goodwill:  a friendly loan regime for businesses that create jobs.

ASB Bank is an NZ bank that enjoys a strong brand reputation for service and innovation.  It regularly polls as one of NZ’s most preferred retail banking brands, thanks in large measure to the sterling leadership of Ralph Norris, an IT guy who became CEO and who now runs Commonwealth Bank, ASB’s owner.  Norris’s legacy at ASB is a team, an ethos and a modus operandi which still builds on what it’s good at. It doesn’t get everything right, but overall, it’s an organisation many Kiwis admire.

This move probably won’t cost that much; competitors are already calling it a gimmick, but that will only come across as sour grapes, and perception is a big part of this move. Smart marketers use downturns to make bold moves.  ASB has just demonstrated one way to do it.

Following today’s internet blackout, NZ Prime Minister John Key announced this afternoon that, via an Order-in-Council, he has postponed the coming into force of the Copyright Amendment Act and in particular Section 92, which contains “guilty until proven innocent” clauses. I am delighted by this development.

Before everyone starts feeling too cocky, the news is also significant in its demonstration of a new power in the political and lobbying process, one which all governments and businesses need to consider.  In just two weeks, via two simple campaigns on Twitter and the general internet, a national government was forced to take action on legislation.  The power of the internet community has just been vividly demonstrated.  However, it also demonstrates the power of the mob, and that’s what we  who protested were - a mob, albeit an intelligent, informed and probably enlightened one.  Our cause was righteous in our eyes, but so are other movements in the eyes of their supporters.  Athens, Rome, London and Paris suffered major civil disorder because the mob became uncontrollable.  Containing the internet-enabled mob may be a major challenge for governments and businesses everywhere.

I am a strong believer in property rights, including copyright.  However, on Monday, this website will be blacked out in protest against a draconian new copyright law that comes into force in New Zealand with a huge impact on artists, businesses, and general members of the public, basically anyone that uses the internet. En Avant will join a wide array of bloggers, businesses and news sites covering the entire spectrum of content, audience and politics.

Section 92 of the Copyright Amendment Act assumes Guilt Upon Accusation and forces the termination of internet connections and websites without evidence, without a fair legal process, and without punishment for any false accusations of copyright infringement. We should speak out against injustices like Guilt Upon Accusation being done in the name of artists, businesses and protecting creativity.

The countdown is on: we have until 28 February 2009 to persuade the government to abort this law.

An organisation called the Creative Freedom Foundation has been set up to specifically represent artists’ voices on these issues. Check out their website: http://www.creativefreedom.org.nz, sign up and help our MPs make an informed decision about S92!

Thank you.
Jim Donovan

PS As some sort of part-time writer, I’ve decided I’m an artist.  At the risk of looking even more foolish (what’s new?), I’d also appreciate a little help over the weekend from someone who knows about hosted Wordpress, to make this blackout thingie happen. Can a Wellington-based tech whiz please contact me ASAP?  Update: Ignore that; I’ve figured it out!

Ever had one of those weeks when the same idea gets raised again and again in unrelated contexts?  This week, I’ve been in several discussions with very experienced business people in very different industries looking at very different issues, and each time this little phrase came up:

“Untidy xxxx, untidy business”

where xxxx could be shop, storeroom, workshop, reception, kitchen, factory, vehicle, warehouse, etc.  In essence, each of these successful business leaders has a mental red flag raised if they walk into a business and see obvious inattention to tidiness; not everywhere, just areas critical to the success of the type of business.

So when you’ve got a prospective customer, investor, partner or employee on your premises, what will be their reaction?

Yesterday, I wrote about global pessimism and getting on with life.  What I now know, thanks to The Spectator, is that Britain has a market intervention which will enable a new positivism for that nation:

Faith Of Britain Day is a day that focuses all of the positive energy in the country towards achieving our hopes and aspirations. For exactly two minutes on March 6th at 11.00am our consortium of psychics and healers will act as a channel for the positive thoughts of the entire country.

Why March 6th at 11.00am?

March 6th has been chosen as Faith of Britain Day because March is a time of seeing light emerging from the darkness of Winter, therefore emphasising hope in an unsure world. Numerologically this date is symbolic because the 3rd month, the 6th day and the 9th year are all multiples of 3 which is about balance - which is what we strive to achieve as humans. The time, 11.00am is a master number, or a powerful 2 (1 + 1) which is the duality of the inner and outer self, encouraging us to look within to find solutions.

Utilizing the incredible force of positive thinking.

Faith of Britain Day will help us all overcome whatever obstacles and difficulties we may face as a country, an economy and as individuals. With over 80 million people concentrating their mental energies at the same time on the same day, we will unleash an irresistible psychic force that will, quite literally, make our dreams come true.

There’s more:

Faith of Britain recognizes that Britain is a multi-cultural, multi-faith family. All of our faiths and beliefs have one common thread: the belief that positive thinking makes positive things happen.

How do I take part?

At exactly 11.00 am on March 6th 2009, we ask that you stop whatever you are doing for just two minutes. Take that time to concentrate your thoughts on overcoming a particular difficulty or solving a problem that has affected your life. It may help to say quietly or aloud “I have faith” while you are thinking about this difficulty.

Why will this work?

It is a proven scientific fact that thinking about something often causes it to happen. Some call this quantum physics. Others simply call it “faith.” We ask that you open your mind to joining in with a unique psychic force that will change our lives through the power of thought.

What a relief!  We’re saved; at least, those of us with British antecedents. Do you think we could make it a global event, all around the world at the same time? Oh, what about the numerology of date and time? No worries; anything’s worth a try, isn’t it?

Addendum:  I’m normally tolerant and careful of people’s beliefs, but this is just too silly.

I’m very disenchanted with the constant breathless “end of the world is nigh” reporting in most media, the hijacking of bad news by agenda-pushers, and the one-sided blame game. Yes, I know some bankers deserve our opprobrium, but not most of them; and don’t forget that the governments we elected around the world contributed to the problem, with soft interest rate regimes, distortionary tax incentives, schemes to push poor people into mortgages, etc. Let’s also not forget our own responsibility. Many people bought into the speculation game, paying too much for their own housing,  borrowing on those homes to buy goodies today, over-leveraging themselves to build up property investments, investing in high return schemes without regard to risk, and buying assets where the only way to make money is for a bigger fool to come along.

Enough! All this doom-saying and blaming does no-one any good. Karl du Fresne, Wellington’s usually grumpy old man, hits the right note for me:

I keep hearing economic commentators scolding us for not realising the severity of the economic crisis and acting accordingly. But what do they expect us to do? Dress in sackcloth and flagellate ourselves with barbed wire? Stop laughing, going to movies, listening to music or doing any of the other things that give us pleasure?

Would they prefer that we all draw the curtains, eat dry bread and gruel and sit around in darkened rooms feeling miserable?

Bugger that. Getting on with life is surely the best possible response to the financial meltdown. There are enough people around the world talking themselves into a depression without New Zealanders joining in.

Wellington at the weekend was buzzing. I can’t think of a better antidote to all the prophecies of doom from the economic Cassandras.

I’ve heard several people recently mention their concern or exasperation at the distraction or rudeness of people texting and emailing during meetings, or worse, taking phone calls.  It’s a real issue for newer members of the workforce who may have developed the habit of using their phone or laptop anytime anywhere.  Some thoughtful people worry that the remoteness and lack of humanity shown by some intra-office emailers (flaming someone whose desk is ten metres away) will spread into broader human interaction.  No doubt some workplaces and some people will fall into that behavioural mode, but then again, look at how quickly it’s become commonplace in some countries for smokers to no longer inflict their habit on others in the workplace, pub or home, evolving through asking permission to now taking themselves outside.  That societal pressure to adopt better behaviour  is called “good manners”.

On starting my first job I was given a list of explicit do’s and don’ts.  I was also assigned a “buddy” whose primary role was to answer my newby questions and to teach me the unwritten rules. Some were quasi-political (eg. interacting with the powerful or the quirky), but most were just good manners. Those rules evolved over time, as did society and the workplace.   Some fell by the wayside, some new ones become part of the norm.

Here are a few technology manners I try to abide by:

• Switch your phone to silent in meetings (and other shared events), and don’t take or make calls (unless you’ve told everyone beforehand that you really are expecting an truly urgent call, and apologised beforehand; update: and leave the room so people can carry on without you disturbing them).
• Likewise, don’t check (or answer) your text messages, email or voicemail during a meeting or when talking to someone (in person or on the phone).
• Don’t browse the internet or do other online tasks when in a meeting or talking to someone, unless it is something related to the meeting, with the intention of sharing it during the meeting with others present. An exception is co-workers talking casually while doing their normal job, but if it turns into a proper conversation, stop one thing or the other.
• Don’t text or email someone in a conversation more than twice.  After that, call them.
• Don’t copy all and sundry on email, and don’t play the “I’ve copied your boss” game on emails. If you have a gripe, say so, and if necessary, approach the boss, ideally together, with a clear complaint and options.
• If someone complains to you in a text message, email or voicemail, call them.
• Don’t use foul, intemperate, offensive or defamatory language (or pictures) in business communication, including email, text messages, voicemail and phone calls. Mild swearing is acceptable in voice conversations between mates, but don’t inflict it loudly on others within earshot.

How to enforce these? First and foremost, demonstrate them in your own behaviour. And tell people when they join that these are part of the way things get done around here. If someone breaks the rules, tell them politely, briefly and firmly not to do it.  Usually that’s all it takes, but if they persist, you have other tougher decisions to make.

The basic principle? Do unto others as you would have them do unto you. The people who give you their time deserve your undivided personal attention, and vice versa; and always interact with people as if they are with you in person.

Paul Walker (of “irrational Valentine’s Day” fame) has pointed me to a list from noted Harvard economics professor Greg Mankiw.  It’s a list of propositions which attract widespread consensus and support by economists (put aside the references to the USA; these apply to any economy/nation):

1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
2. Tariffs and import quotas usually reduce general economic welfare. (93%)
3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
6. The United States should eliminate agricultural subsidies. (85%)
7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
11. A large federal budget deficit has an adverse effect on the economy. (83%)
12. A minimum wage increases unemployment among young and unskilled workers. (79%)
13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

Unfortunately, politicians have a habit of ignoring this consensus and doing what is popular. That’s understandable on minor issues, but head-in-the-sand behaviour on big issues, and downright dangerous during a crisis.

Guys, there’s rational and there’s rational. Chris Dillow tackles another economist on whether or not celebrating Valentine’s Day is rational.

Paul Walker says Valentines day is irrational. Giving a woman money, he says, is Pareto-superior to dinner and flowers. Now, I’m not famed for understanding women. But my hunch is that a man who says: “I can’t be bothered with that Vally day bull. Here’s a £100 - get yourself another pair of shoes” will not be getting any action for a while.

For those needing reasons to support this self-evident  insight, Dillow presents four rational economic propositions.   Another addition to that field of economics known as Womanomics.

Last week, The Economist published its latest Big Mac Index.  Briefly, it compares the prices of the ubiquitous McDonalds menu item in a broad cross-section of economies, and adjusts those prices for relative purchasing power (a standard economic normalisation).  The adjusted prices are then compared to the US price for a Big Mac.  The percentage difference indicates how much the currency is under- or over-valued.

As at 30 January 2009, the EBMI calculated that, relative to the US dollar:

• The Pound is 7% undervalued
• The Yen is 9% undervalued
• The Kiwi is 30% undervalued
• The Ozzie is 38% undervalued
• The Yuan is 48% undervalued

And:

• The Loonie is 5% overvalued
• The Euro is 24% overvalued
• The Norwegian Kroner is 63% overvalued.

I often teased my fellow directors at Deltec with the Big Mac Index; 95% of our revenues were international. However, the EBMI has proven over the years to work as a rough and ready indicator of a currency’s long-run relative value. Use this information at your peril.

Prompted by various conversations and things I’ve read in the last few days, I’ve got a few gripes, er, I mean constructive suggestions for developers of personal office applications (MS Outlook, Google Calendar/Gmail, etc).

• When booking meetings, how about default (changeable of course, and overlappable)  pre- and post-meeting travel times, shown as such? Currently I have to remember to book them as separate diary events. (It was suggested to me that apps developers don’t think about this stuff because they never leave their buildings!)
• Building tasks into calendar applications as a standard feature, not an add-on that doesn’t integrate or display well. I want to see in my calendar what I’ve got to do, and how much time it’s going to take.
• Include start dates in tasks. Some of us plan more than a few weeks ahead, but few task and planning tools (and even some project management tools) seem to recognise this.
• Bring-ups and renewable reminders on email and tasks; and, as  Rowan suggests, optionally hide them until they’re due to start or I’m reminded again.
• Common tags/labels and links between calendar events, tasks and contacts.  I do stuff in preparation for an event, other people are involved, and I want to use the same labelling/folder system to manage them.
• Linking repeating tasks and calendar events to other tasks and events.  A regular one for me. Say I chair a board meeting on the 4th Monday of every month.  That’s straight forward in most calendar apps. Ten days before, I finalise the agenda, and have a phone call with the company secretary and CEO. The board papers go out 3 days later.  Setting up the phone call as a repeat meeting in my calendar  is laborious, since it may be the the 2nd or 3rd Friday in the month, but it is always 10 days before.

No doubt I could think of more, none of which are “power-user” activities but everyday personal planning tasks. These applications seem to have either stagnated on doing office basics, or morphed into monster geek mashups, too complicated for ordinary punters to set up and use. Yet they are used more frequently and by more users than just about anything else.

Of course, it may just be that I should read the instructions! Surely not?

Here’s a simple mindgame in corporate accounting. Imagine you’ve decided to borrow money by issuing a bond.  Let’s say the bond is for $1000. You now have $1000 cash (an asset), and you owe the bondholder $1000 (a liability). The person who owns the bond can sell it to someone else, but you still owe the money. Now fast-forward through time to a point where the market is in meltdown, and the going price for your bond is now only $900.  Does your liability change? No. Unless you buy that bond back, you still owe $1000. So when it’s time to report your financial results to your shareholders, you show that liability as $1000, yes?

Er, no; not according to leading UK bank Barclays. In its financial statements for 2008, it’s applied the current accounting standard of “mark to market” to its corporate debt obligations, ie. money it owes to other people on its own account (as distinct from money held in customers’ bank accounts). Has it bought back the debt? No. Does it still have to pay the full value of the debt when it falls due? Yes. But Barclays has written down the value of its own debt and magically booked a profit of £1.663 billion (yes, billion). One assumes that the Barclays board took professional advice.  The auditors signed off the results without demur. But how can the financial statements be said to give a true, fair, and meaningful summary of Barclays’ financial position?

Respected economist and Financial Times columnist Willem Buiter is worth reading on this one.  His opening paragraph signals his opinion right from the start:

Either accountancy rules in the UK are generically nuts, or Barclays PLC’s accounting conventions are idiosyncratically nuts, or both are (nuts, that is).

Given that Australia and NZ accounting standards are usually in line with the UK, it makes you wonder about the reported profits of our banks downunder.

Vodafone has announced that it will merge its Australian mobile phone business with that of Hutchison Whampoa (branded as 3).  To those with some knowledge of the Oz market, this comes as no surprise, other than why it didn’t happen sooner.  VfA and 3 have both struggled in the dreaded lower tiers of operators ever since entering the market.

The most curious issue is why VfA didn’t emulate its Kiwi sister company, which took over the ailing Bell South operation and, through brilliant marketing and attention to a quality consumer product during high market growth, substantially increased its absolute and relative customer numbers, becoming #1 even though its prices were higher. (It was also slightly helped by its choice of GSM versus Telecom’s AMPs and CDMA offering, meaning better phones and good international roaming).  The hapless Vf Australia went for a low-cost (one could even say cheap) modus operandi which gave a poor customer experience; that cheapness seemed to infect its brand persona too.  As the market matured, the larger players (Telstra 42%, Optus 33%) capitalised on their earlier market entry, economies of scale, and stronger network effects from fixed line bundling, corporate deals and friends&family packages. Efforts to recreate the Kiwi experience at VfA came too late, with VfA stuck at 17% market share; and 3, though enjoying a growth spurt with its 3G offer, is too small to matter at just 8%.

A combined VfA and 3 no doubt hopes to overcome the scale and network issues of the past, but a strong brand persona change is also required. However, it looks like the JV will persist with both brands (both parents have global aspirations).  Unless it’s just short-term window dressing, that sounds like a difficult and expensive trick to pull off successfully.

In NZ, despite VfNZ’s great performance, Telecom doesn’t have so much of a gap to close.  With its next generation network (think of it as super GSM), its fixed line synergies, and its smarter business processes, I expect it will gradually overhaul Vodafone.

If I remember correctly, Telecom owns 10% of Hutch Australia, so presumably it will own 5% of the new entity.

Disclosure: My family trust holds Telecom shares.

Spotted by Andy Lark, with background history available at the BBC.

We’ve all experienced it when we’ve taken something faulty back to a shop.  Probing questions which imply that you’ve been at fault rather than the product; slipperiness on who’s responsible for a solution; evasiveness on how the problem will be fixed and who to contact on progress; further inconvenience for the customer in having the goods returned and extra cost if you’re not local.  So when you come across a store that doesn’t engage in these behaviours, it’s actually refreshing, and transforms the initial disappointment into a pleasant experience.

It’s with great pleasure that I recommend Tom Foolery of Muswell Hill, London to you.  I purchased some rather nice designer jewellery there, as a Christmas present for SWMBO.  Unfortunately one of the earring clasps didn’t grip tightly enough and tended to fall off.  Taking the item back to the store just before New Year’s Eve, Nicki Kaye said “Oh I am sorry. Let me resolve that for you.  I’ll return it to the jeweller because he’ll want to know what’s wrong, and I’ll send it to you when it’s fixed.” No questions, no evasiveness.

“We’re flying back to New Zealand in two days,” I say.  “That’s alright,” said Nicki. “Just give me your email address and I’ll let you know how we’re getting on and when we’ve sent it to you; here’s my name and email address in case you have any questions.” An email from us was answered within 12 hours, and two days later, another email advised us that the jewellery was on its way back to us in NZ, along with a tracking code for the package and a brief description of what the jeweller had done.  The package arrived (a very sturdy little packing box) and the earrings work perfectly. Do you think we’ll go back to Tom Foolery? You betcha.

An old Wellington retailer’s catchcry was “If it’s not right, we’ll put it right; and it’s the putting right that counts.” It’s as valid today as it was then. Well done, Nicki Kaye and Tom Foolery.

Any psychologist will tell you that rewards work better than punishments.

Reacting to customer outrage, Vodafone announced (very gracefully) that it will drop its new $1.50 charge for sending a paper bill each month, part of its initiative to encourage customers to accept electronic billing  In your own business, you have a major problem with customers not paying their bills on time, so you impose a 10% late payment penalty.  I can guarantee that your customers will hit the roof every time you charge it, and you’ll end up processing a lot of credit notes.

There’s nothing wrong with what you’re trying to achieve.  It’s just that customers react very negatively to being punished by you for what to them (and to you in the past) is acceptable behaviour. One solution is to package your cost-savings measures as an option and share the cost-savings with those customers who take part. However, the incentives are small and take-up is often slow.  I’ve found that you get much better results if you lift your standard prices (a one-off drama),  and at the same time introduce significant bonuses or discounts for the behaviours you want to encourage, be it electronic billing, paying by direct debit, on-time bill payment, etc.  Give the customers plenty of notice and make it very easy for them to initiate cost-saving action.  The price-hike memory fades and the bonuses keep doing their job of positively encouraging customer behaviour.

Sometimes your problem is much more complex and severe; your cost drivers and price drivers are way out of alignment.  Then the best approach is likely to be unbundling or rebundling - making the various elements of your product or service more transparent, with variants and options clearly spelt out.  And major changes like unbundling are great opportunities to introduce those other behaviour-encouraging measures too.

Whichever approach you take, take the time to plan it through.  Major pricing model shifts should be one-time only events.  Some customers will scream (and maybe leave) because they’ll be charged more, but you were losing money on them anyway; remember, you’re not running a charity. Some will be very happy because they’re paying less, or at least they’ll stop using the hitherto free part of your offer, saving you and them money, and you’ll likely get more of their business.  And new customers will be attracted by your smarter pricing.

On Monday, directors of failed carpet-maker Feltex pleaded “not guilty” to charges laid against them in relation to information in the listed company’s financial reports prior to the collapse. It would be improper for me to comment on the case, as it before the courts (and neither should you).  I did however note that the directors, in a reported statement, are laying emphasis on their reliance on “professional advice” in approving the financial reports.

In my experience, boards of major organisations almost always seek professional advice (usually from leading law or accounting firms) prior to making decisions on thorny issues and big events like capital raising, especially when they are exercising their statutory responsibilities during difficult times. Sometimes it’s done because the directors want ideas and recommendations, sometimes to have their own thinking either confirmed or corrected, and always as part of being prudent.  As directors, we hold responsibility for the decisions we make, but many directors rely on professional advice in the belief that courts in most legislations internationally have been reluctant to blame directors for following such advice.  If the court in the Feltex case rejects the “professional advice” defence, it could have important ramifications for directors and companies everywhere.