Boards of Directors Must Become More Professional to Avoid Corruption
El Diario Vasco’s article, “Boards of Directors Must Become More Professional to Avoid Corruption,” interviewed Russell Reynolds Associates Consultant Pedro Goenaga about his work in executive search and his insights in corporate boards. A translated version of his Q&A is excerpted below.
- You are a headhunter. What would you consider the profile of a talented person for the business world to be?
- The two differentiating characteristics of such a person are those of anticipating trends and managing uncertainty. This involves understanding what new situations there are in an international context and their impacts on the business, directing their teams to respond according to those facts. Now then, we are in a changing world. The strategy of today may not be valid tomorrow. You have to have sufficient credibility to redirect the organization, knowing that cycles are shorter and shorter.
- This thing about anticipating the game has something to do with being a visionary. Is intuition more important than technical knowledge?
- For me, the better visionary is the better-informed person. We do not need gurus but professionals with access to the people who really know what is happening in the different industries, countries, political administrations, etc. A person who has access to those channels, receives the information, and directs it will be the person that draws the best conclusions.
- To reach those management positions, are candidates required to give blood, sweat, and tears?
- Inspiration is found on the practice field. The ideal combination is to unite the ability to anticipate with a dedication commitment. That formula tends to achieve success. It is not worth working a lot of hours without knowing where you are going or, on the other hand, thinking that you can have a few wonderful ideas and not take the time to put them into action.
- Well, the conciliation between working life and family life does not form a part of that formula.
- Conciliation is low. Inspiration with sweat is needed. A top manager sacrifices many moments, but no one is forced to hold those positions. And, in addition, they are well remunerated.
- Should remuneration be tied to results? Or, said another way, is it logical for management in banking or Spanish companies to have been given multimillion dollar salaries when their organizations were on the road to bankruptcy?
- There have to be two parts. Management must receive logical remuneration from the market, according to their level of dedication and capacity for sacrifice. This having been said, what lacks any sense is for there to be variable remuneration situated at the top of the rankings, when the shareholders see the stocks of the companies managed by those executives have not appreciated. There must be a certain correlation. It cannot be that shareholders do not receive dividends, and the top executive is at the top of the rankings for remuneration. It is not enough to say, “I have worked very hard.” One has to provide results.
To read the full article, click here.