Corporate Governance: A shared responsibility

impact individuals and societies. Societies or communities have an interest in what companies do and how they are governed. Each of these impacted persons, individually or collectively, in one way or the other places a demand on corporate governance.

Through a combination of democratisation, press freedom, increased consumer sophistication information and communication technology, there is now greater awareness of what corporations should do. There is also greater expectation how companies should be governed.
Corporations are becoming accountable to larger cross-sections of communities. Therefore gone are the days when corporate governance was thought of as a board and senior executive’s concern, but that it a common good which requires shared responsibility. Do companies get the leadership they deserve?

Companies are not democracies. They do not elect their chief executive officers or boards of directors. Leadership is appointed. Often organisations can only hope on the skillfulness, integrity and quality of interaction of appointed leadership.
However, in today’s businesses, it is unlikely that a single person can provide all the necessary leadership on different issues. The “John Wayne School of Leadership”, which suggests that an individual who has the experience, knowledge, skill, charisma, vision, decision-making ability, interpersonal skills, respect, stature, position, role etc. will provide the leadership to lead us out of this mess, is proving to be a myth.

Corporate governance challenges and needs are dynamic and change by the day depending on the type of organisation. For instance, leadership in multi-national corporations are often faced with “unfamiliar” risks ranging from security, climate change, global health issues such as HIV and AIDS and varying cultures, laws and regulations, over and above standard corporate governance challenges. Small to medium scale enterprises also attract specific sets of problems and needs.

These multi-dimensional corporate governance challenges require multi-skilled leadership. Acts of leadership must come from all of us.
If it is true that we are all leaders in one way or the other, then it should follow that corporate governance is a shared responsibility of all stakeholders. Anyone related to an organisation, somehow has a role and responsibility in developing the necessary corporate governance system.

As a leader in one dimension of the organisation, how are your levels or quality of accountability, transparency, compliance, responsibility, integrity, fairness, competence, truthfulness, obedience etc?
These individual or self-governance values are what collectively, either supply or place a demand on the quality of corporate governance in an organisation. I have seen good boards of directors frustrated out by ungovernable corporate cultures. Thus organisations must be governable inorder for good corporate governance to take root.

Religions have it that the way you are, is how you will be ruled and as a man thinks in his heart so is he. This view is one of the pillars to values-based governance. Outcomes of this type of governance include the stakeholder theory and corporate social responsibility.
Values-based governance seems to be appreciated in more societies than the purely legalistic, shareholder-based governance. How is the shared responsibility for governance implementable?

First, it is important to remember that corporate governance graduated from shareholder to stakeholder approach after the realisation that success of an organisation also depends on a wider group of persons including government, employees, customers, suppliers, creditors etc, rather than just shareholders.
Freeman and Phillips recognised this fact in, “Stakeholder theory: A libertarian defence (2002)” and said that it is how well a company manages relations and balances the interests of varied stakeholders, which determines the success of an organisation.

So stakeholder relations plus shared responsibility will impact the quality of an organisation’s governance systems. An example of shared governance responsibility is integrity. Integrity is closely associated with both, governance and leadership. Duggar, in The Journal of Academic and Business Ethics mentions that a culture of integrity creates a highly valued business environment; it impacts the quality of corporate governance; and it provides a foundation for solid long-term financial performance.

At individual level, integrity is those characteristics of an individual that are consistently considerate, compassionate, evenhanded, transparent, honest, trustworthy and ethical. Trust is closely associated with integrity. Individuals with integrity are regarded as those who can be counted on to do consistently what is “right” and what is expected of them.
They are reliable and predictable in dealing with others and with issues, and they are defenders of what is fair, just, and acceptable. The role of leadership in good governance is therefore to bring together people with shared integrity and trust values. Equally important is for individuals to search for employers or companies with similar values.

Strong relationships are based on trust, the more the trust the stronger the relations. A good test case in Zimbabwe will be the outcome of WikiLeaks revelations, currently doing the rounds. Whatever relations will remain intact after the saga would have indeed passed the “trust” test.
It is in fact a norm for every relationship to be tested. After all, trust or mistrust is earned directly or indirectly. Duggar also says that when there is “trust” in dealings in or with a corporation it is usually because the leadership of the company has created a culture of integrity. The relationship with the corporation becomes predictable, reliable, and consistent in meeting stakeholders’ needs and requirements. A convergence of trust and integrity among others create conducive atmosphere for good corporate governance. All because each stakeholder takes responsibility and plays their part.

Value addition in shared responsibility is that stakeholders do not only benefit from good governed organisations, but also take pride in being associated with them. This means broader success, greater broader and broader power for all involved.
So does that mean leadership is absolved from its responsibility to make decisions and lead? No, on the contrary shared responsibility in good governance creates giants in a variety of ways. It could also attract lots of fans, even from far off land.

“Little” Lionel Messi of Barcelona Football Club in Spain, when alone on the street is not as great a giant as when he is on the football pitch.
A young man with curable growth hormone deficiency, which proved too costly for his Argentinean family and football clubs, would not have been noticed by Barcelona FC, had he felt sorry for himself, ignored his talent, not had the integrity to be on time for training, trusted and respected his coach father or been content to be just the son of a football coach.
If “little” Messi had not had the discipline to know when to drink and when not, I am not sure, this writer would have known, or heard of this talented young man. Skill, discipline, integrity, character, trust and communication altogether, conspired and little Messi won, Barcelona FC won, Argentina won, FIFA won, South Africa and the Vuvuzela producers won as well as the Messi family.

However, the great legend Pele had this to say about Messi, “He’s a great player. He plays very well for Barcelona, but has failed to show his talent with the Argentina team. Maybe he can at the World Cup?”
World Cup 2010 is now in the past and the performance of the Argentineans did not showcase the celebrated Messi. What is it that Barcelona FC offers Leo Messi that the Argentina national team does not? Better governance perhaps?

The Kaufman Governance Post in 2010 reported that, Maradona’s disastrous coaching trajectory in past years is well known. Prior to being asked to coach the national team preparing for the South Africa World Cup in 2010, he had tried to coach two club teams in Argentina, winning 3 games out of 23, with one of the teams folding altogether.
Maradona had started coaching right after being banned from soccer for over a year following the World Cup in the US in 1994, due to his recurrent doping.

During the qualifying stage prior to the 2010 World Cup in South Africa, Maradona’s team nearly failed to make it to the World Cup, in spite of playing against so many less talented South American teams.

The stories surrounding Maradona’s work ethic and lack of discipline as a coach are also well known, and, together with his repeated bouts with drugs and alcohol, provide very poor example to millions of soccer youth who know what a gifted player he was in the past.

This illustrates that, good governance at institutional level, whether for a soccer team or another organisation, is the ability of the team to attain results where the Whole Exceeds the Sum of its Parts. In the 2010 soccer World Cup, countries like Ghana, Uruguay, Paraguay and arguably South Korea, Japan, Slovakia, the US and Chile, could have belonged to this group.

Among others: their achievements were not mainly due to numerous world stars in their team, but their teamwork instead, showcased shared responsibility.
Italy, England, France and some African teams, excluding Ghana and South Africa, are thought to have belonged to the group where the “whole-is-much-less-than-the-sum-of-its-parts”, and Argentina and Brazil were also be added to that group.

The quality of leadership of the coach, through the team’s strategy, tactics, and discipline, is critical in determining whether the whole exceeds or not the sum of its parts. Therefore, it is not by mere fluke that football or soccer is the world’s most popular sport. People love it because it provides for a need in entertainment. Every one of the stakeholders knows their roles and responsibilities.

Teams know when and how to prepare for a match, fans know what regalia to wear and when to arrive at the stadium, and in the case Manchester United, Sir Alex, knows how much gum to take.
The game is played in consistent field sizes throughout the world. Rules originally codified in 1863, and have since developed, are known and apply equally to all. All recognise FIFA as the mother body, which organises all World Cups. Human error and weaknesses are what fail the game. If left alone without undue human interferences, the soccer system is predictable, reliable, and fairly

consistent in meeting stakeholders’ needs and requirements.

The only unpredictable is which team wins; no wonder betting creates fun to soccer lovers. Everyone knows at the end of the game there must be a winner and a loser. Penalty shootouts and goal aggregations settle stalemates.
Sadly, once “self” gets entangled with the governance of soccer, the game loses objectivity. It is then, that we start to hear about match-fixing, corruption or soccer hooliganism. Likewise, when corporate governance systems are