BS The Wise Leader (52)
To appear on 18-5-22
Narcissus in the board room
By R. Gopalakrishnan*
(*The writer is an author and a business commentator. His articles and videos can be accessed at his website www.themindworks.me and his email ID is rgopal@themindworks.me)
Media encomiums and the feeling of self-importance are shimmering mirages in the desert of self-delusion.
Every person’s perspective is partial because the experiences of that person fashions perspectives, though the experiences of that person accounts for a miniscule part of what really happened, One of my bosses used to say, “Beware of winning an award or appearing on a magazine cover; it may be the kiss of death, signalling the future decline of a successful career.” He was mortified of fame and public glare, which tend to consume even balanced leaders. A chief executive officer, indeed, all prominent leaders, must learn to survive the seductive spotlight of public attention, a major job hazard even though it may be only a temporary spotlight.
Our Rigveda mentions the word, Charaiveti, a Sanskrit sandhi of chara eva iti, which means ‘always keep moving.’ You become humble by practicing charaiveti, conscious that every high or low will pass. John D Rockefeller was thought to be reclusive, silent, and withdrawn. He was reportedly fond of reciting the poem, “A wise old owl lived in an oak, the more he saw, the less he spoke, the less he spoke, the more he heard, why are we not all like that wise old owl?” I am reminded of the dilemmas of the retired Warren Schmidt in the film, About Schmidt, and acted so brilliantly by Tom Hanks.
Media encomiums and the feeling of self-importance are shimmering mirages in the desert of self-delusion. The authors of the Black-Scholes model were celebrated for reportedly converting investment and finance into a science. They were even awarded the Nobel Prize. Their company LTCM (Long Term Capital Management) collapsed. Author, Morgen Housel, makes a startling point, “Success is equated with making money. Making money has little to do with how smart you are. It has a lot to do with how you behave. Behavior is tough to teach, particularly to smart people,” Good outcomes are dressed up as strategic strokes of genius, while catastrophes are attributed to bad luck.
From my careers in Unilever and Tata, both long-surviving practitioners of corporate ikigai, I know that sustained success is born in a womb nourished by six enzymes—conservative finance, innovation, continuous improvement, relentless adaptation, and paranoic corporate governance. Such companies reap the benefits of the long-term compounding effect of their good karmas. These practices of the grownups are golden wisdom for startups.
Venture capital as an industry did not exist forty years ago. In April, VC firm, Sequoia India, published a blog titled Corporate Governance: the cornerstone of an enduring company. Such a theme, coming from a venture capital leader, is significant. The blog was also consistent with the previously reported statements of Sequoia’s global CEO, Michael Moritz, in a Charlie Rose show. Unlike most short-lived venture capital firms, Sequoia has survived for several decades because “we are scared of going out of business…we assume that tomorrow won’t be like yesterday…we can’t be complacent…”
The blog carries a plea for more players in the Indian startup ecosystem to join Sequoia’s pledge for greater governance. In the early part of the blog, the company affirms that they do as much due diligence as is possible, though there are limitations in the early stages. Sequoia also undertakes governance training for founders and senior management. Sequoia states that the company is “willing to do whatever it takes to encourage good behavior.”
To me, the message is that there are two vectors to good governance—oversight governance and behavioral governance. Multiple regulations improve oversight governance, but there is a lacuna in behavioral governance. Most boards are hesitant to interpret or act on significant behavioral aberrations. They wait for proof.
What is behavioral corporate governance? It is a behavioral code of what constitutes good board and leadership behavior before the rot of narcissism takes its toll. There are countless articles and books on the elusive subject of leadership narcissism.
In the Financial Times of 25th April, Michael Skapinker has written an interesting piece titled How to handle a narcissist in the workplace. The article concerns media baron Robert Maxwell, whose body was found at sea thirty years ago. The trial of his daughter, Ghislaine Maxwell, in the Jeffrey Epstein case has been in the news. Skapinker quotes several experts to assert that (i) many narcissists lack a secure base of love (ii) some have a genetic predisposition to narcissism (iii) many are clever, capable, and work prodigiously hard (iv) narcissists require excessive admiration (v) they lack empathy for others (vi) they operate with a sense of entitlement.
I have written in this series for over four years on behavioral governance under The Wise Leader. I have long been curious about behavioral corporate governance. I even prepared a director’s checklist to interpret early warning signals. (https://www.business-standard.com/article/opinion/prodrome-of-a-governance-crisis-behaviour-120112000045_1.html).
The checklist may be used for established corporates as much as for startups. India’s startup ecosystem is in a nascent stage of promise. We need to minimize aberrations like Housing.com, BharatPe, Zilingo, and Trell. The Sequoia blog may awaken players in the corporate governance space and startup ecosystem to address the subject with increasing urgency and seriousness.
