TUESDAY 27 JUL 2010 1:05 PM
VINDICTIVENESS AGAINST LEADERS CAN BE STEMMED
Many chief executives fear becoming the next Tony Hayward. But the tide of vindictiveness against leaders can be stemmed, says Ruth Sunderland, editor of Observer Business & Media
Is it fair to hold up chief executives as human sacrifices when their companies foul up?
The vilification of Tony Hayward over the BP oil spill has been even more intense than the opprobrium heaped on the heads of Sir Fred Goodwin of RBS or Dick Fuld, the CEO of Lehman Brothers.
As the face of the oil spill, Hayward became public enemy number one in the US and was even excoriated by the White House for spending Father’s Day at a yachting event with his son – though President Obama was golfing at the same time.
Hayward’s strategy of engagement was actually textbook PR, showing the chief executive leading from the front.
It is hard for the public to feel sympathy with very highly paid oilmen or bankers when the organisations they run have committed terrible errors with enormous costs to society. Individuals should be properly held to account.
But the personalising of business failure can be counterproductive. It is easier to heap blame on an individual than it is to deal with uncomfortable underlying issues, such as our continued addiction to oil, our appetite for cheap credit, or the shortcomings in the regulation of the oil and banking industries.
Can CEOs avoid becoming the next Tony Hayward? In a social media age, it is impossible to avoid public outrage, and it is impossible to prevent politicians looking for fall guys.
But the tide of vindictiveness against business leaders could be stemmed.
In part, it is the flipside of the worship bestowed on some bosses during the boom, including Hayward’s predecessor Lord Browne, nicknamed the Sun King in his heyday. The irony for Hayward is that he was never one of the “celebrity CEOs” and had kept a modest profile since taking over in 2007.
“CEOs should be presented more as team captains than demi-gods”
Perhaps we need to redraw the template for CEOs. In the past, bosses were viewed merely as highly skilled managers, engaged in the mundane task of making money, and there was no high-blown language about “vision” and “values.” Executives were not on “missions”, they were doing their jobs – important jobs, but still just jobs.
Top CEOs run large, geographically diverse and highly complex organisations and they do so at the head of a team, which should have depth and breadth of expertise. In an age of austerity, it would be more seemly for CEOs to be presented as team captains than demi-gods.
This does not mean retreating from the media in the hope of hiding behind a cloak of corporate responsibility when a crisis hits. Talking honestly to the media and to other stakeholders about strategy and risk will foster a climate of greater understanding and support.
It also means other key members of the top team should lend public support to a CEO in the spotlight, unlike BP’s chairman Carl-Henric Svanberg, who for weeks left Hayward to face the flak alone.
Good leadership means the top team standing together. And it means openly explaining what a business is doing and why – the public should never be shocked to learn what companies they trusted have been doing behind closed doors.
The chief executive sets the tone, the aspirations and the culture of a business. Get those right, and there might be a chance of seeing an end to the corporate witch-hunts.
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