Conventional and social media instruments have impact and public opinion appears to be formed at least in part by weight of coverage. Also, people appear to be eager to offer comment, whether informed or not, without considering the issues and alternatives.
Being a leader is not easy.
In addition to the traditional attributes, increasing uncertainty and risk are complicating matters. Add ‘crises not of the making of the leaders’ and the complications escalate.
A McKinsey quarterly report on leading in the 21st century suggests that to be able to adapt a company’s strategy to an external crisis, a good leader must “create a culture of constructive skepticism and surround [her/himself] with people who bring multiple perspectives and have no fear of challenging the boss”.
This means the management team, but it is also important on the board.
The purpose of a board is to use the diversity of directors’ skills and business networks to maximise long-term sustainable financial returns to shareholders. Chief executive employment is another key directors’ role, as is the leadership the board provides on the vision, mission, business plans and ethics of the organisation.
We’re having trouble with this in New Zealand.
Mayor Len Brown is under question for undeclared ‘upgrades’. The issue appears to be whether his then-undeclared mistress benefitted. In France the mistress component of the president’s behaviour was considered to be irrelevant as it was his private ‘affair’. The French reaction might have been somewhat different if business had been involved.
All board (or council) members are under scrutiny for transgressions. On an agricultural board, farmers are constantly aware of the potential impacts on their credibility of, for instance, an effluent spill or over-extension financially.
The problem is likely to get worse. Pita Alexander, specialist farm accountant and commentator, has said that all businesses are getting more complicated and increasingly should be focussed on targeting optimal production. What is optimal for the leader, however, might be beyond the capabilities of staff, but it is the leader who is under fire. In a company the board of directors is also implicated when something goes wrong, hence the reaction of Auckland councillors to mayor Brown’s activities. Had the council not investigated, councillors could have been accused of being complicit, and ratepayers might have questioned their positions and salaries.
Equally, for a company, directors should not say that operational matters are somebody else’s responsibility. They are liable for finance and health and safety: there is a case of extension of liability to matters which affect the reputation of the company. New Zealand directors of Manuka SA have no
doubt been discussing this.
The problem with this approach of ‘liability’ is, however, that it will deter people from becoming involved.
New Zealand companies, and councils, need people who are knowledgeable, forward thinking and have all the skills and attributes identified in leadership. These people are also likely to be the type that push the limits, and sometimes go over them.
To enable top people to want to become leaders in governance and management we need to be considering how best to create pathways of excellence. We also need to be challenging the norm.
Changing times and new goals demand fresh thinking, and should prompt action. All directors should be scrutinising themselves for the value they add to a board, while checking the risks inherent in their own activities.
• Jacqueline Rowarth is professor of agribusiness, The University of Waikato.
