Time, we think, is running out for those at the top of the organisational tree. If life up there in the rarefied air of the corporate canopy doesn’t change soon, the inhabitants will find growing army of malcontents hacking away at the seemingly solid trunk on which they firmly believe the capitalist system is rooted. Internationally blight has infected the world of corporate governance and its trusted senior executive lieutenants. It is called arrogance and it feeds on greed. Boards and directors in New Zealand may not yet be as stricken as their contemporaries in the United States and Europe, but there is worrying evidence of contagion creeping into our region. On the principle that prevention is more effective than cure, we dispatched our correspondent Mark Story to listen to the analysis and advice of practitioners and specialists lined up to examine the topic in Auckland at last month’s Corporate Governance Masterclass seminar organised by LexisNexis and Management magazine. His cover story identifies some of the symptoms and prescribes few remedies, but there is surprisingly little evidence that corporate leaders really comprehend the dynamics of the problem.
As Clarence Da Gama Pinto, editor of Mt Eliza Business Review says in recent editorial which we reproduce on pages 56 and 57 of this issue: “Ethics and Corporate Governance have for too long been the pre-occupation of small constituency of philosophers, ethicists and the socially minded.” Corporate greed exists in New Zealand, though it manifests itself little differently. More worrying is private sector arrogance of attitude exemplified in reluctance to accept that directors and managers must show genuine leadership commitment and perform to more demanding world-class levels. And unless they do so it’s unlikely we’ll ever really lift the nation’s total economic performance.
Our coverage of the New Zealand Business Excellence Awards this month illustrates the point. It is the public sector which now shows willingness to embrace excellence and best practice, not the corporate giants of the private sector which seem to adopt “we know best without being measured” attitude. Is there connection between the level and the basis of remuneration paid to leaders in the two sectors? Whatever the interpretation, the organisations prepared to step up to the mark and aspire to world-class performance in 2002 are revealed in our story starting on page 30.
