What connects the three institutions above – each of whom has recently hosted DA to talk about leadership, governance and compliance? They run different businesses, they are different in size and structure; and, they have different cultures, constraints and management styles.
There are of course similarities. They are large and profitable enterprises; they have global perspective and a network of international relationships. In two out of three cases, they operate globally. They are all world-class in their sectors. And they each need to create value for investors, compete successfully and build lasting relationships with customers.
But what is the underlying ‘connective tissue’? The element common to successful institutions is likely to be strong leadership and good corporate governance – not just at the top but at all levels. Good leaders see themselves as not just there to satisfy shareholders but to guide and look after their employees and customers – and to listen to them. The word ‘governance’ is derived from the Latin word ‘gubernator’ meaning ‘helmsman’. Leaders have to steer the corporate ship in ever changing and often choppy seas.
In an increasingly complex world, there are more and more demands with which leaders have to ‘comply’ – the law, political and public developments, environmental and energy policy, pension rights and other evolving requirements. And it is because companies have notably failed to comply with some of the demands placed on them that they are subject to an increasing raft of regulations.
Since it is impracticable to regulate for every conceivable situation, a code of values to enable effective governance is necessary. Such a code is effectively a set of principles that can act as a ‘handrail’ to good decision-making in the face of challenges and competing interests. Despite the black-and-white nature of metrics as an indicator of the success of companies, the decisions required to achieve those metrics are anything but binary.
Because values can’t be taken for granted in a corporate environment there is a need to instil them through education. Thus one of the criteria on which leaders should be selected is their ability to instil the relevant values and to live by them. Living the values is a leadership responsibility at all levels. In that sense we are all leaders, aiming always to behave responsibly and to be seen to be doing so – since what we do is at all times potentially under scrutiny. And so the “tone from the top” is not enough on its own. Posting a corporate “guide to values” is a good start but those values need to be “operationalized” in the context of a statement of intent for all major projects. Otherwise their relevance as values at the tactical level will be elusive.
Those to whom responsibility is delegated at all levels need to understand the part they have to play in ensuring that the values are upheld throughout the company. And those who delegate that responsibility are accountable for putting in place a system to help them do that.
As Pope Francis reminds us: “Every man, every woman who has taken up the service of government, must ask themselves two questions: ‘Do I love my people in order to serve them better? Am I humble and do I listen to everybody, to diverse opinions in order to choose the best path?’ If you don’t ask those questions, your governance will not be good.”