Marc Le Menestrel

Reflections on Governance and the Africa Directors Program: at the forefront of responsible board practice?

Marc Le Menestrel — 2016-02-28T10:28:02Z

I wrote this short piece as a Reflection Paper for the Newsletter of the INSEAD Corporate Governance Initiative. It illustrates my commitment towards the transformation of business governance and the profound impact that South Africa has on my reflections about who I am: descending from African ancestors and man of white skin.

When INSEAD Corporate Governance Initiative accepted the invitation of the University of Stellenbosch Business School and their Executive Education branch USB-ED to partner in the offering of the Africa Directors Programme, I was especially interested in the programme's intention to bring ethics at the centre of the governance discussion and practice.

Crises of many types are currently raising new challenges for business organizations. In a context where capitalism is being questioned in its foundations, improved governance has emerged as one response and a critical issue for the credibility of the whole system. A new paradigm is emerging where business and boards have a new and more active role to play, where responsibility and power are two keys going together. This includes a shift towards a stakeholder view of boards, away from the previous shareholder view which is now recognized as having imposed too many negative externalities on other stakeholders (employees, bondholders, communities, governments and the environment).

South Africa at the leading edge of governance for social transformation

In this respect, it is remarkable that South Africa plays a leading role in the current discussion about corporate governance. As part of the post-apartheid transition led by Nelson Mandela's arrival to political power, a committee on corporate governance was constituted in 1993. Chaired by retired Supreme Court of South Africa judge Mervyn E. King, the “King Committee on Corporate Governance” has produced a series of reports over the last 20 years - the “King Reports”- that apply to all listed companies in South Africa.

It is important to understand that the political changes of the post-apartheid South Africa is one more instance of what is a profound transition, one that goes much deeper than the already complex change of political and economic dominance from white to black ownership. As program co-director Arnold Smit taught me, the King Commission was about designing a corporate governance framework that would be able to mirror the values of a progressive constitution, one that would match the new democratic dispensation and one that should guide the rebalancing of South Africa's economic and business landscape to make it fairer and more inclusive for all the country's citizens. As it faces this challenge, South Africa is an important point of focus and even a source of inspiration for the wider transformation of our societies.

Leadership, sustainability and good corporate governance citizenship are at the core of this new vision for governance. The King committee has brought South Africa at the leading edge of the discussion about corporate governance, heralding a different approach, for example, than that which Sarbanes and Oxley have advocated for the U.S.. The latter does not question the supremacy of shareholders, and has instead focused on a greater ability of detecting responsibility for value destruction and in particular fraud. This is mainly because SOX came as a legislative response to the big fraud cases of the 90's and early 2000's (WorldCom, Enron, Tyco …).

The South African approach has to be applauded and has indeed been recognized. It certainly has increased the perception of a greater effectiveness of South African boards. For instance, South Africa ranked #3 in board efficacy according to the Davos World Forum Global Competitiveness ranking.

In this program for African Directors, we are of course guided by the King Reports, which are an inspiration to identify and discuss key principles that could be implemented all over the African continent, a context that offers a broad range of worldviews and business systems. Especially, we allow stakeholders to take a prominent position when conceptualizing the role of corporations. It is held explicitly that business organizations shall be governed in a sustainable manner and for the benefit of society as a whole. This view goes well beyond the primacy of shareholders model and brings new perspectives to the governance conversation. It acknowledges the un-sustainability of the shareholder view and considers that, for business to exist in the future, it has to pay greater attention to human values, ethics, social justice and environmental sustainability. This rejoins the idea that greater performance arises when looking not narrowly at profitability, but also considering social and environmental impacts like in the “Profit, People, Planet” framework. In a sense, this program is one of the first in the world that is strongly built on such a transformative paradigm.

Developing a Capacity for Directors to Use Power Responsibly

In terms of pedagogical intention, the program aims at building capacity of directors for the contribution of business governance towards societal transformation. When we go to the details, it is crucial to realize that, ultimately, governance is very much about the responsible and irresponsible use of power. Thus, building capacity in governance is about developing effective uses of power that contribute to effective corporate transformation, and ultimately beneficial societal transformation. The creation of business value is not an end in itself but a means towards a greater end: the transition to a more cohesive, just and sustainable society. Business rationality is reversed: society is not used as a means to profits but profits are a means to a greater purpose which is to benefit society in the respect of environmental impacts.

Responsible uses of power give meaning to power and the program intends to give meaning to the power of boards. Rather than top down lectures, this is achieved through facilitated conversations: conversations amongst business, political and social actors, conversations across business actors, conversations at board level with employees and stakeholders, conversations preparing these boards which ultimately require deep conversations amongst board members and finally conversations within each board member. In this program, we enter into conversations that give meaning to the use of power in business governance and that prepare board members for the responsible use of power for the benefit of corporations and their positive impact on “people and planet.”

As the world is undertaking a profound transformation on its own sustainability, it is critical that business governance develops a language that allows conversations about the use of board power and its impact on profits, but also people and planet. As a result, this program is unique in its ambition to discuss the broad extent of the power of corporations on their environment.

As an outcome of the program, participants become empowered to give new meaning to their contribution to the boards they chair or sit in. For instance, they find new ways to empower their boards to tackle issues of risks – where excessive risks often lead to fraud and then corruption. Resisting the temptation of excessive or unwarranted risk, and then fraud, and ultimately corruption is thus a novel manner to preserve the value creation of an organization. As my mentor Ludo Van Der Heyden puts it, value preservation more than value creation is the most important responsibility of boards. It is also an opportunity to enter into a new meaning for the role of board members, and through them, of business in society. It is an opportunity that promotes strategies that are based on sustainability and justice. By proposing a language that overcomes the narrow mindset of shareholders profit maximization, we open a space that gives business a greater purpose and a more positive contribution to society and its ongoing and necessary transformation.

Enlightened Power and Ethical Shadows

Going deeper into the theoretical realm, the articulation of governance has been traditionally approached either about interests (how to further the interest of a particular actor, how to coordinate interest of different actors), either about ethics (how to constrain interest by ethical principles, norms and rules). The reality is richer and more complex because it must articulate both.
Governance is about the smart articulation of both interests and ethics. A fundamental principle of this articulation of a bias that characterizes us all: each of us are very good to perceive, think and communicate about the ethical side of our own interests and, conversely, to see and communicate the unethical sides of the interest and actions of the other actors. There is generally very little awareness of our own shadows, while there remains a very strong bias against those who may judge us or infringe our particular interests. This bias creates a sort of tiny corridor where one thinks about ethics, focusing only on one's own interest like the light at the end of the corridor. A main objective of the program is to empower participants to be free from that sort of ethical bias, if not blindness, i.e. to bring light to our own ethical shadows. That is the challenge that needs to be overcome to allow for deeper societal and thus ethical discussions at board level.

The word ethics has been used a lot, so much so that in many quarters it leads to dubious or even cynical reactions. We indeed believe that it should be understood in the presence of another notion: enlightened power. Through the use of carefully designed and facilitated processes, such as a cognitive, emotional and shall we dare say a spiritual awareness of our and our corporation's negative and harmful shadows, we can liberate that enlightened power from having dared to bring new light to our shadows. In the program, the harnessing of directors' enlightened power increases capacity of participants 1) to be free to think strategically about a wider range of opportunities for action and vision, 2) to be emotionally more mature to fully hear and understand the hidden risks of strategies that oppose legitimate interests, so as to combine them better in resolutions that are more satisfactory to stakeholders 3) to enter into board dynamics that leverage the grey zones of interests and ethics in an inspirational manner.
As a result, and as a final comment, this program is not just about governance for social transformation. It also becomes an opportunity for personal transformation. A transformation that equips us with a way to talk about some of the most pressing issues that capitalism face today in Africa and beyond, one that gives us the language to find meaning in our professional life and experiences as a director so as to truly become actors building and contributing to a better world.

As directors become leaders of their organizations, and even enlightened leaders, they integrate the changes and new mindsets their corporations need to acquire by anticipating, integrating, living and being the change before leading, inspiring, supervising it on the others, and particularly on the corporation. Isn't this leading a responsible and new view of the board?

Marc Le Menestrel
Co-Director of the African Director program

How to help business actors to apply the Precautionary Principle?

Marc Le Menestrel — 2013-01-25T18:40:04Z

On Wednesday 25th of January, I was part of the EEA delegation who launched the second volume of Late lessons from early warnings: science, precaution, innovation at the European Parliament (see my former entry in April 2012 here)

Jacqueline McGlade, Corinne Lepage and Sybille van den Hove during the Press Conference

The delegation presented the report to Green Ten (a group of NGOs acting at the EU level), to the European Parliament, to the DG Environment and to Friends of Europe.

The general message of the report is that early warning signals of a technological risk for the environment or human health are often ignored and even supressed, thereby leading to negative consequences that could have been avoided by early action.

Because business actors often play an important role in developing and applying these risky technologies, it is important to understand why did business not respond with precaution to these early warning signals.

This is the question that our chapter "Why did business not react with precaution to early warnings?" with Julian Rode attempts to answer on the basis of published academic literature. Without much surprise, we find that economic motives are often driving non-precautionary decisions. However, these decisions are also influenced by a complex mix of epistemological, regulatory, cultural, and psychological aspects.

Clearly, the interest of our work is to lay ground for more advanced and constructive findings. In particular, I am especially interested in the concrete application of the precautionary principle by business actors. To this end, my impression is that there is still much to add to the current debates. For instance:

– the legal definition of the precautionary principle is open to interpretation. Understanding these interpretations require us to understand the ethical issues that lie beyond;

– we can neither be totally free nor totally precautionous. In practice, we need to draw a line in the grey zone. To some extent, this is what each one of us do every day. What I find interesting is to understand and improve how this line is drawn;

– prima facie, business actors often face a dilemma between profits and precaution. For the use of precaution to be profitable, much work is necessary. Technological risks, when they involve the environment and the public, are a specific case of ethical risks. Clearly, identification, mitigation and transformation of ethical risks is not easy. This is a major challenge for ethical training;

– the profoundly difficult dilemmas facing business actors must be acknowledged and spelled out, in order for the debates to gain constructiveness and not be lost in ethical ambiguity. As I attempt to teach to Master students, companies should clarify for themselves what profits they would forgo for precautionary reasons and with which managerial process they would make such decisions.

Of course, there is much to work out, but the idea is to promote intellectual courage and honesty so that we can create and develop trust. For instance, imagine a business actor saying

"we want to be precautionous but we cannot always be because it would cost us too much. Hence, we have to draw the line somewhere. This is the part that we are ready to pay for. Clearly, we can't solve the issue alone. We need help and support from all stakeholders to move this line further towards sustainability."

Would you help business to apply the precautionary principle?

Related Pieces on this website:

Thinking Ethics as a Grey Zone

Ethical Risks: Identification, Mitigation and Transformation through Ethical Training

A related piece on the excellent Vivagora website (in French):

Les dilemmes de l'innovation : pourquoi est-elle peu ou pas responsable ?, by J.J. Perrier, Vivagora.

The Prince of Wales's Business & Sustainability Programme: Brussels Nov. 2011

Marc Le Menestrel — 2011-11-10T13:39:00Z

On November 10, I was invited to teach a short session on Values, Ethics and Leadership to the Prince of Wales's Business & Sustainability Programme in Brussels.

Part of the University of Cambridge Programme for Sustainability Leadership, this programme appears to me as one of the most advanced and proactive programme in Sustainability and Leadership.

In fact, given the proactive positioning of the programme, I was expecting some reluctance from participants to see their “dark side”, which I believe is a pre-condition for any intellectually honest work on ethics.

In reality, I was surprised to observe that many of the participants were ripe for self-questioning and far from being self-serving in their thinking.

I believe this reflects the quality of the three days they had attended and I am glad to have experienced this particularly high-level and enlightened audience.

It was a priviledge to meet and discuss with executives at the highest level, for instance from the oil industry in Irak or Nigeria, thus gathering precious perspectives for my udergraduate teaching of these issues (see for instance my undergraduate seminar on Shell in Nigeria).

Even in a short session, it was possible to share concrete and effective ways to better think, act and communicate about ethical leadership.

In particular, I expressed the idea that a credible communication about sustainability requires to identify and share, in the appropriate manner, the extent to which we are not sustainable.

Ethics is one of the most difficult and fascinating dimension of business today, in particular because it links the very inner part in each of us with the destinity of our species. In this assignment, I felt how much walking this path requires us to be centred.

Compliance and the Grey Zone

Marc Le Menestrel — 2011-10-28T14:12:00Z

Compliance is an organizational process aimed at encouraging ethical behavior at work. However, it is not sufficient to guarantee ethics. It can also be perceived as a top-down constraint, pressuring even more managers who have already many balls in their hands. On the other hand, it is often a first measure to meet the expectations of regulators and stakeholders. A key aspect is to consider compliance not as an end in itself but as a means to promote ethics beyond compliance.

Approaching compliance and ethics as a grey zone allows to rationally think about the various situations where ethics conflicts with economic and financial interest. What are these situations and how can we analyze them? How do we act in front of these dilemmas and how can we honestly talk about them, inside and outside the organization?

These questions are at the center of a session whose objective is to empower participants to strive in the grey zone of business ethics and to move beyond compliance. Leading us outside our zone of comfort, the interactive method gives a special emphasis on the emotional character of values-loaded decisions.

In terms of organizational ethcis, moving beyond compliance can be especially useful to contextualize and harness a code of conduct. Because ethics is not guaranteed by compliance, it also helps to uncover ethical risks, to create a more ethical climate and to nurture a values-based culture.

Designed for a leading company of more than 200.000 employees, this session allowed to move from seeing compliance as a constraint to ethics as an opportunity. Thanks to the genuinely honest discussion about the difficulties of combining ethical values and business interest, it raised enthusiasm and willingness to act.

A Journey Through the Forest

Marc Le Menestrel — 2011-07-19T12:27:38Z

In these last years, I have been dreaming of accompanying executives in Nature, to share my teaching in this only place where I truly feel at home. I could see the day where I could teach from my true self, as much as a rock-climber or an academic.

Thanks to the vision of Jens Meyer at CEDEP and of his client, this became reality in June 2011 with a 2-day program in the Fontainebleau forest, followed by a 1/2-day debriefing to facilitate integration and re-entry.

I may have spent in this place most of my week-end before 20, discovering this magical forest in the typical tribal way of my rock-climbing friends and with unbounded passion. This journey was like coming home: a deep feeling of belonging.

Here is how the program was presented to a set of 40 Human Resources participants of a large multinational:

The purpose is to prepare you to guide the leaders of your company in their own journey. We will take the time for you to go deep in who you are and who you want to become: we want your own journey to become the primary source of your excellence towards others'.

We will dream, reflect, share ideas and visions to be ourselves, for us and for others: to work better together.

Day 1: Anchoring in the past, dreaming the future: being with integrity.

Day 2: Giving to others, protecting ourselves and trusting the unknown: becoming together.

½ Day 3: Integration towards my role as HR leader

Experiences in nature combined with cutting edge leadership development approaches and discussion are an effective way to help us realize how much we are part of nature. We also experience that our own accomplishment depends on looking after each other and the environment. Our nature can be a surprising and distinctive teacher…

Download the flyer (pdf) for more information.

Teaching Ethics to Chinese Executives

Marc Le Menestrel — 2010-11-29T10:58:44Z

In September 2010, I was invited by Renmin University to teach 2 days in their new CMPM program, a 5-module training experience inspired by Mintzberg's IMPM but dedicated to Chinese senior executives.

I had a few surprises during my intervention, but I was specially impressed by the proportion of female executives (close to 50%), their assertive character, the deepness of their reflections and their high-status profile. Could China be at the forefront of gender equality in business?

Click here to watch a video for CMPM participants.

From Nightmares to Dreams

Marc Le Menestrel — 2010-01-06T10:59:00Z

On the one hand, the crisis we are facing can be a nightmare. On the other hand, it can be an opportunity to realize some dreams. This two-part session is intended to help us move from one perspective to the other.
In the first part, we carefully evaluate the challenges pertaining to our current situations. We can then assess our responses and identify our needs for facing these difficulties as appropriately as possible. A second part leads us to these defining moments, where one find the (…)

- Executive Sessions / Ethics as Grey Zone, Executive Training, Ethical Risks, Ethical Rationality, Leadership Development, Experiential Teaching, Dreaming and Visioning, Emotional Agility

Nightmares, Dreams and Business Decisions : Teaching Values for Leadership Development

Marc Le Menestrel — 2009-12-04T16:32:00Z

Nightmares

As a decision scientist specializing in ethical values, I have been drawn to leadership development in a difficult and rather painful manner. Taking an analytical and systematic approach to values in business decisions, I was to uncover an array of nightmarish considerations.

Think about it. Which leader could honestly face the contribution of business to the current destruction of our natural habitat? With whom can you joyfully discuss the subversion of the public sphere using powerful influence practices or manipulative techniques? What sort of emotions arise when one share personal situations of corruption, intimidation or coercion? You are likely to arouse strong and negative emotions.

In my experience, most business people avert thinking about it. This avoidance of a direct conscience of the unethical aspects of business turns executives into a reactive mode. They still think a lot but their cognition is trapped in various forms of denial, rationalization and externalization of their locus of control. By constructing these protections, they also isolate themselves from the source of future and dramatic problems. They are preparing themselves for bad surprises.

In my executive teaching about “Values, Ethics and Leadership in Business Decisions”, I create situations where emotions are close to the real situations and I attempt to establish the trust that is necessary for participants to dare experiencing in the classroom the unethical person they can be. I then share a series of analytical tools to uncover the specific logics of ethical values in business decisions at the cognitive, behavioral and communication levels and we work on strengthening their ability to be proactive in front of these difficult situations. Months later, I may receive feedback that these experiences succeeded in empowering them to be the ethical person they wanted to be in crucial decisions.

Along the years, my own development lead me towards being less and less judgmental, giving increasing space to the participants and their values, while feeling less the need to impose my own values on others. In this manner, I reduced the rate of reactance behaviors. The context also helped me, the prevalence of unethical behaviors in public business discourses having increased. Still, I was in need of a more direct relation with the positive self in each participant. This pushed me to creating sessions where dreams will balance nightmares.

Dreams

My intention in “Dreaming and Visioning" Sessions is to connect participants with the source of their motivation and help them clarify their vision for the life of their dreams. These “quasi-spiritual” dimensions become additional layers, below and above, for their decision-making process. Hence, my objective remains to empower participants to take concrete and strategic decisions that reflect their own values and aspirations.

Even if the level of participants' commitment is often very high, the childish connotation of the word “dreams” for what could be conceptualized as mere imagination leaves space for those who want to live the experience lightly. Also, the distinct use of the words “dreams” and not “objectives” allows more distance with the fear of failure.

These strictly experiential sessions are structured as a series of exercises about 1) connecting with the past, 2) dreaming the future, 3) distinguishing shared and non-shared values and 4) building a vision with concrete bold actions. My explicit conceptual input along the process is kept to the minimum: I give instructions before each exercise and ask participants what they have learned afterwards. This allows me to dedicate myself to observing the processes, being present when someone needs it, keeping the group together when appropriate and answering methodological questions when raised.

It turns out that dreams, objectives, values and concrete decisions that are uncovered are rather fundamental. Over the hundred or so participants that I observed during AMP sessions at INSEAD or with CEOs and executive boards, it seems that a great majority are looking for a life that meet key essentials. They dream of someone that would love them or continue to do so, of an harmonious combination of their personal life with their professional life, of a social context where their values could be aligned with the ones of the community they are part of, and of opportunities to contribute to others.

In my experience, the communality among Europeans, Asians, Africans, Americans seems patent as if culture makes little difference at this deep level. The diversity of the audacious concrete actions each one identifies for himself is great but many say the first thing they will do is talking with their partner about the result of the session.

Since the start of my dreaming sessions in 2008, these sessions are said to have a very high impact on participants. They are happy to find there an opportunity to dedicate time to an integrative decision-making process about the conduct of their life. It is too early for me to have a sense of any lasting effect but these sessions have already contributed to my own development. I feel more balanced in my teaching of ethical values in business decision-making, thanks to the direct observation of executives who better see who they want to become and feel strong in their capabilities to move towards the life of their dreams.

These are personal reflections about my teaching to executives, prepared for the INSEAD Conference on Leadership Development – December 2009

Values, Ethics and Business Decisions

Marc Le Menestrel — 2009-09-18T09:50:00Z

How to act in the face of corruption, intimidation or coercion?

How to honestly discuss the impact of business activities to our natural habitat?

What to think about influencing the political sphere and the general public using subversion practices or manipulative techniques?

What to say when accused of unethical behavior?

Those who have never asked these uncomfortable questions may later be trapped in various forms of denial, rationalization and loss of power. They prepare themselves for bad surprises.

In this challenging session, we experience and discuss situations where unethical behavior may well be the easiest or most efficient response.

Looking for some "Ethical Rationality", we then work on a series of analytical tools to uncover the specific logics of ethical values in business decisions at the cognitive, behavioral and communication levels.

We thus can work on strengthening our ability to be proactive in front of these difficult situations: our power to draw the line in the grey zone.

Dreaming and Visioning

Marc Le Menestrel — 2008-10-06T09:46:00Z

In this session, we give time to ourselves to link with our past and elaborate a vision of our future. Using “dreams”, we make it more than an intellectual exercise and connect with what is most important to us. We learn the extent to which our values are shared or not and we identify bold and concrete actions towards the life of our dreams. After the session, each participant has laid out a vision that will help his or her practical decision-making.
Inaugurated at INSEAD in the AMP in (…)

- Executive Sessions / Executive Training, Leadership Development, Human Resources, Experiential Teaching, Dreaming and Visioning, Sustainability, Emotional Agility