Business leadership in crisis over cases of fraud and greed, conference hears

BUSINESS leadership today, particularly in the US, is in crisis, chairman of Bombardier Aerospace Shorts Sir George Quigley told the MBA Association of Ireland’s annual conference in Cork yesterday.

“People are shocked by the instances of fraud, greed, lack of transparency and aggressive accounting practices.

“There is a sharp reaction against the image of the CEO as star or supermodel, surrounded by geeks only too willing to pursue any goal that held out a promise of wealth,” he said.

“Boards of directors are criticised for being asleep on the watch and too often acting merely as cheerleaders,” he added.

Leaders are charged with being obsessed with growth and with promising far more than they could realistically deliver. The name of the game was getting money for a good idea with scant regard for how it could be turned into a good idea. And he said shareholders often appeared compliant and gullible.

It is easy to point to the business misjudgments which were made, he said. “Can the misjudgments, as distinct from the criminality, be put down to poor business leadership or are they an inherent characteristics of free markets, particularly at a significant inflection point in business evolution?” he asked.

But Mr Quigley said at least three errors will be committed.

“The first is that the focus will continue to be on the person at the pinnacle of the organisation and that the replacement of charismatic stars by quiet, workmanlike, stoic leaders who major on competence will be regarded as fixing the problem.”

Mr Quigley said nothing short of creating a healthy corporate culture would suffice. The second error is good corporate governance will become the talisman and the vision will become suspect.

“It was never more necessary for companies to innovate, and avoiding risk is the sure route to at best lacklustre performance,” he said. The third error, he said was to ignore the situation in which leaders find themselves.

“The leadership’s adaptive capacity, not only to deal with the adverse external circumstances but with the unpredictability of erratic economic fluctuations and political surprises, will therefore be a key characteristic of successful leaders,” he said.