Dark Roast Double Shot: The Bane of Omnipotence
It was one of those days in the middle of June when the view outside the French window looked like a study in still life. Bright sunlight beating down with a ferocity which made me wonder, if soon the view would inherit a Daliesque melting quality. The most comforting sound was the constant hum of the air conditioner which kept the temperature perfectly poised to optimise the jouissance of the morning cup of Dark Roast Double Shot. This dark brew was just the right companion for the enigma that consumed me that morning as the neurons fired up to dissect a deep-seated malaise.
As I sifted through the news that had gathered through the night, I admit that I was stoked to read that one of the biggest corporations in the world now had a Chairperson who was of Indian origin. Already a CEO he now had the dual responsibility and clearly full authority to steer the fortunes of a world-renowned entity. A just reward for a man of great integrity, talent and proven track record. Unassailed by the power of pride and happiness the rumination of the mind kept beseeching the larger question of whether this concentration of power augured well for all those who would be stakeholders of this enterprise. Not specifically just in this case, but the very concept of the Chairperson and CEO being the same individual.
In philosophical and psychological terms, the pitfalls of excessive concentration of power in individuals has been extensively argued and researched. The evanescing of social harmony and the causation of conflict is well recorded. The fallibility in human behaviour when endowed with excessive power is unfortunately a reality. Societal norms and laws are created to circumvent such sufferance. Yet, individual ambition and the inability of institutions to be the just watchdogs of their influence makes the human race revisit such travesties again and again. This is not to say that there cannot be individuals who may rise above the fault-lines; but that is not a chance worth taking when the stakes are high. Checks and balances built in to avoid imprudent aggregation of power are the silent sentinels of sanity and sustainability.
The role of business in our lives cannot be underestimated. It is akin to the arterial system that carries blood to the farthest parts of the body. From being the cornucopia of goods and services that make life comfortable, to being the fountainhead of livelihood directly or indirectly to the majority of humankind it is critical to our existence; then a 'fortiori' if business was weak or unhealthy it would have a deleterious impact on society and people at large.
In the world of business, the position of Chairperson and the CEO are at the top of the pyramid of any organisational structure and therefore control resources as well as influence people, which is the very definition of power.
The Chairperson is the head of the Board that is mandated to monitor corporate governance, compliance, risk, accuracy and transparency of reporting, fiscal performance, remuneration of senior managers, safeguarding of shareholders’ interest. The Board also plays the important role of monitoring the company’s stability and ensuring its survival in times of economic change or uncertainty.
The CEO on the other hand is the company’s top manager, oversees the working of the senior management team, is responsible for the strategy to grow the business including products, innovation, marketing, expansions. Ensures return on investment for shareholders. Delivers on goals and financial expectations. Builds and nurtures relationships with other business associates, media, community and professional organisations that can strengthen business results. Serves as an important member of the Board with a well-informed view of daily operations and implements the Board decisions in the company.
Clearly therefore, while the Chairperson along with the Board ‘monitors’, the CEO ‘manages’. Roles that contrast yet complement each other to form a cohesive system that powers a company with prudence and responsibility. It is an elegant system that ensures that the monitoring is by a body of people who bring in diverse experiences, knowledge and information and not left to a single individual while the execution is invested in a single individual with responsibility and freedom to respond with agility and authority.
This concept of power sharing with collective responsibility is a cornerstone of governance. It enhances sustainability while reducing the possibility of a self-centred autocratic form of management which could emerge if the power of monitoring and managing was invested in a single entity. Fuelled by avarice activated by the millions of dollars in salary and bonuses for CEOs on achieving fiscal targets this would spawn grave consequences.
Why then do we find even large corporations, owner led companies, public sector companies in effect every kind of company without distinction still crowning the same person with the title of Chairperson & CEO or Chairperson & Managing Director? It is because those in power feel insecure without full control. As individuals in power tend to become more focussed on their internal states and emotions and less of others, a wider width of control suits their purpose better.
Owners and powerful managers believe they have the absolute right to determine their destiny. They forget that their existence itself depends on the support of a huge eco system. From the world we inhabit to the people who live on it and the communities that have evolved with their own identities. There is a growing concern about how companies treat each of these and intrinsic to it is how within itself it manages risk and responsibility. The ability to respect an architecture of power that counterbalances accountability and freedom is key to good governance.
Keeping in view the fact that those in power only hunger for more how could this happen? There are only two ways. The first that the enlightened amongst the most powerful lead the change. Plato’s concept of the Philosopher King is great inspiration. The other is that the investors wake up and push for what is right before business goes the same way as politics. Don’t wait for the regulators. Those in power tend to support each other. We have seen the bane of omnipotence in many spheres of our existence. The world of business would be a better place without it.
You can DM me on LinkedIn or write in to darkroastdoubleshot@gmail.com
(Nitish Mukherjee is a Board Member, Advisor, Coach & Mentor. The content of this article is his personal opinion.)
