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.

• Your first and greatest duty is to inspire, direct, succour and support the enterprise that it is your privilege to lead, so that it shall realise its full potential.
• You will give primacy of place to building constructive relationships with your fellow employees, because you and they acting together are the only true source of value.
• You will exert your efforts and skill to making sure that you and your colleagues provide your customers with good quality and value, striving constantly to match or exceed the offerings of competitors.
• Then - these things having been put in place - you will avoid the temptation to let unwise ambition guide your actions - in particular avoiding foolish Mergers and Acquisitions, risky, undeliverable strategies and top-down corporate fiats driven by the need to exercise unilateral power.
• You will not consort solely with others of your status or ilk; nor with external advisers, at the cost of mingling freely and constantly with your own junior colleagues and customers, in order to learn their wisdom and impart some of your own.
• You will not let others lead you into the temptation of greed and excessive reward, rather you will carefully consider the needs and well-being of colleagues and ensure that they, too, are fairly rewarded for their true contribution, realising that, without them, you are nothing.
• You will behave modestly at all times, not raising great edifices to your own glory, nor travelling the world with unseemly pomp and luxury. You will avoid setting yourself up above your colleagues in the public eye - always making it clear that you are but part of a greater team. Your place of work shall be modest, not defended by dragons, and accessible to your co-workers, because becoming isolated by physical and social barriers is the first sign of impending failure.
• You will seek constantly to learn and encourage others likewise, not letting false pride or ambition stand in the way of the realisation that many others possess greater knowledge and wisdom than you - and that the greatest sign of true wisdom is to listen and seek to learn from others, including the most humble of your colleagues.
• You will seek to satisfy the reasonable needs of your financiers, whilst remembering always that their ambitions, needs and whims are frequently going to be at odds with the best long-term interests of the enterprise to which you owe your first duty. You will endeavour to seek out means of financing that will make you least dependent on moneylenders.
• Last, remember always that it is your duty and privilege to lead a community of people, which, like all communities, can be inspired to create great artefacts and services, valuable financial surpluses; be a source of reward, pride and satisfaction to its members and a responsible citizen of the world. Above all, with dedicated and skilful stewardship, it can be immortal.

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."