GIVE GOVERNANCE TO THE BUREAUCRATS - LET'S HEAR IT FOR INSPIRED, COMMITTED LEADERSHIP!

The Combined Code on Corporate Governance purports to give guidance about the strategic leadership of companies. The fact is that any guidance of this sort is deeply buried under a mass of procedural material and checklists on formal roles, board procedure, separation of powers, audit and financial reporting. The Combined Code is in reality a mechanism for enabling investors to try and police the procedures followed by the board to ensure that their money is 'safe'. Research has shown that most value destruction is as a result of inappropriate strategies and poor execution - and that the behaviour of investors and their representative bodies in ensuring Code political correctness is damaging the strategic leadership role of boards of directors.

The vast bulk of research and observation by those who have bothered to get close to successful enterprises indicate that it is the quality of relationships between competent leaders and the people who work with them that is the (unsurprising) magic ingredient which makes good businesses. This is also consistent with the experience of those who have worked with good leaders. The theories bandied about by many business academics, securities analysts, investors and the bulk of the press simply betray how little they understand of the more intimate skills of leadership.

So, let's get down to what really matters in a business: Viability and Leadership.

Viability is important

make sure that your business is positioned in markets where good margins can be made from competitive products/ services - no point in flogging a dead market.

Then aim to build a customer franchise through providing good quality, value for money and excellent service. Never sleep on your laurels - somebody is always aiming to steal your dinner.

But leadership is the key

In order to be sustainably viable, effective leadership is the crucial ingredient that will make the difference. Here is all you need to do to be effective, provided of course, that you have the necessary personal attributes. That is up to you to decide, after reflecting on your experience so far and taking wise advice from somebody who will tell you the truth. (NB. Don't take it for granted that possession of accounting experience and qualifications or an MBA has anything at all to do with leadership potential).

Mandate for leading.

PS. Observe the spirit of the governance codes.

Just in case it needs spelling out, and it shouldn't: "You will maintain the strongest legal, ethical and moral standards in all your doings and transactions - be they financial - or with employees, customers, investors and the wider society of which your enterprise is a part."


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