The Fish Rots from the Head

Posted By: Admin, 05 Feb, 2013 - 12:33 pm

To Whom Much is Given, From Him Much is Required...

This weekend I spoke at the National Housing Federation conference and one of the themes I shared was that we shouldn't blame the vehicle when things go wrong but understand that the responsibility lies with the driver.

You see, some people have tried to suggest that because companies have failed even with good governance that we should abandon governance. I have even heard that governance is a passing phase and there will soon be another leadership trend to follow. This couldn't be further from the truth! In fact, good governance is not only an integral part of a company's success... good governance is here to stay. When we look back we can see some of the reasons why:

Twenty years ago in 1992 we saw the Cadbury Report as a result of the issues at BCCI, Maxwell and Poly Peck...

Ten years ago, in 2002 we saw Sarbanes-Oxley as a result of World Com and the world renowned scandal at Enron...

More recently, in 2012 we saw governance codes being updated but not radically changed as a direct result of the global economic crisis, initiated by the banking crisis...

It isn't that governance is broke but the driver of governance that is to blame!

Let me explain what I mean by way of analogy. My eldest son is 16 now and looking forward to passing his driving test in the near future and getting his first car. I have concerns because of his zest for speed, he only has to hear a sports car and he goes crazy. My dilemma is considering if it is worth getting him an old dilapidated car because it is destined to crash or wondering if it would be better to get a sound, robust vehicle reducing the odds of mechanical problems. Unfortunately, in both examples I see the same fate for the car, because it isn't the vehicle that needs to be concentrated on but the driver.

“The Fish Rots from the Head" is a Chinese saying and the title of Bob Garret's excellent book on corporate governance. I concur that if you want to get to the root cause of failure you need to go to the head. The buck stops with head of the organisation. If governance is the vehicle then the driver is the board.

Biblical scripture tells us that; “to whom much is given, much is required.” Are you the leader and do you take full responsibility for your role? It doesn't have to be a large corporation with thousands of employees that you are responsible for in order for much to be required of you. You could be a team leader in a business or a leader in your own family. Whatever form your leadership role takes, remember that the buck stops with you.

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