In today’s world only at family owned companies it is crystal clear who is “the boss”. As a consequence, the decisions by the management of that kind of companies, whether they prove right or wrong, are taken always for the benefit of the owners. It makes sense since that owners, shareholders or entrepreneurs have risked their money investing in a venture and they expect and demand all effort to be focused on the return of their investment. This is, under my point of view, fine. Even so much so, when by risking their capital expecting a return, the society at large shares the return, mainly in the form of employment and taxes.
But in the big listed multinational the reality is very different. They are run by professional executives and normally the ownership is very diluted among thousands or millions of large or small investors in the equity of the company. That investors are the owners of the company and regional and national regulations plus stock exchange rules should make it possible that the company is governed to achieve the best interest of its real owners. But the reality is that the professional management takes the decisions. They are powerful figures at the company, they manage well the largest investors and who cares about the small investors. As a consequence, they take decisions thinking in themselves, in what is good to protect them and increase their retribution, specially their bonus and share awards. And this is wrong. It is a non sense and because of that, sooner or later, this way of managing companies will have to change. A good leader has a great opportunity to change this mentality. A great leader must be well paid, I agree with that, but must put owners interest first and strategize and think ahead. Think how the company will be stronger in twenty years time in a different society, under different management, in a different world and yet how to deliver the maximum every single year but without compromising the future.
At the public sector, something similar happen. Who is the “owner”: the citizen, tax payer or non tax payer, they are the owners. So decisions should be taken to make their life better or same, no worse and, very specially, to make sure that the future generations will be in a position better and not worse than their ancestors. The problems are that the number one interest of the politicians is to win the next elections and even with lots of controls, there’s a perception that the resources in the hands of the governments do not belong to anybody so politicians are not accountable for how they administer that limited resources for the good of the current and future generations. This is what a good leader will do differently. To understand who sis the boss, the citizen, and, hence, be its humble servant and use the immense power you have won for the well being of today and tomorrow. Will this make that leader to loose the next election?. If genuinely manage to communicate that the decisions are the best possible considering today’s resources and thinking in the future of our children, I bet he or she will win the next elections.