Narcissus in the boardroom
Every person’s perspective is partial because the experiences of that person fashion their perspectives, even though the experiences account for a miniscule part of what really happened. One of my bosses used to say, “Beware of winning an award or appearing on a magazine cover; it may be the kiss of death, signalling the future decline of a successful career.” He was mortified by fame and public glare, which tend to consume even balanced leaders. A chief executive officer, indeed, all prominent leaders, must learn to survive the seductive spotlight of public attention, a major job hazard even though it may be only a temporary spotlight.
Our Rigveda mentions the word, charaiveti ,a Sanskrit sandhi of chara eva iti, which means “always keep moving”. You become humble by practising charaiveti, conscious that every high or low will pass. John D Rockefeller was thought to be reclusive, silent, and withdrawn. He was reportedly fond of reciting the poem, “A wise old owl lived in an oak, the more he saw, the less he spoke, the less he spoke, the more he heard, why are we not all like that wise old owl?” I am reminded of the dilemmas of the retired Warren Schmidt in the film, About Schmidt, and acted so brilliantly by Tom Hanks.
Media encomiums and the feeling of self-importance are shimmering mirages in the desert of selfdelusion. The authors of the Black-scholes model were celebrated for reportedly converting investment and finance into a science. They were even awarded the Nobel Prize. Their company LTCM (Long Term Capital Management) collapsed. Author Morgan Housel makes a startling point, “Success is equated with making money. Making money has little to do with how smart you are. It has a lot to do with how you behave. Behaviour is tough to teach, particularly to smart people”. Good outcomes are dressed up as strategic strokes of genius, while catastrophes are attributed to bad luck.
From my careers in Unilever and Tata, both longsurviving practitioners of corporate “ikigai”, I know that sustained success is born in a womb nourished by six enzymes —conservative finance, innovation, continuous improvement, relentless adaptation, and paranoic corporate governance. Such companies reap the benefits of the long-term compounding effect of their good karmas. These practices of the grownups are golden wisdom for start-ups.
Venture capital (VC) as an industry did not exist 40 years ago. In April, VC firm, Sequoia India, published a blog titled “Corporate Governance: the cornerstone of an enduring company”. Such a theme coming from a venture capital leader is significant. The blog was also consistent with the previously reported statements of Sequoia’s global Chief Executive Officer, Michael Moritz, in a Charlie Rose show. Unlike most short-lived venture capital firms, Sequoia has survived for several decades because “we are scared of going out of business…we assume that tomorrow won’t be like yesterday…we can’t be complacent…”
The blog carries a plea for more players in the Indian start-up ecosystem to join Sequoia’s pledge for greater governance. In the early part of the blog, the company affirms that they do as much due diligence as is possible, though there are limitations in the early stages. Sequoia also undertakes governance training for founders and senior management. Sequoia states that the company is “willing to do whatever it takes to encourage good behaviour.”
To me, the message is that there are two vectors to good governance—oversight governance and behavioural governance. Multiple regulations improve oversight governance, but there is a lacuna in behavioural governance. Most boards are hesitant to interpret or act on significant behavioural aberrations. They wait for proof.
What is behavioural corporate governance? It is a behavioural code of what constitutes good board and leadership behaviour before the rot of narcissism takes its toll. There are countless articles and books on the elusive subject of leadership narcissism.
In the Financial Times of April 25, Michael Skapinker has written an interesting piece titled “How to handle a narcissist in the workplace”. The article concerns media baron Robert Maxwell, whose body was found at sea 30 years ago. The trial of his daughter, Ghislaine Maxwell, in the Jeffrey Epstein case has been in the news. Mr Skapinker quotes several experts to assert that (i) many narcissists lack a secure base of love (ii) some have a genetic predisposition to narcissism (iii) many are clever, capable, and work prodigiously hard (iv) narcissists require excessive admiration (v) they lack empathy for others (vi) they operate with a sense of entitlement.
I have written in this series for over four years on behavioural governance under The Wise Leader .I have long been curious about behavioural corporate governance. I even prepared a director’s checklist to interpret early warning signals (bit.ly/3lkglwu).
The checklist may be used for established corporates as much as for start-ups. India’s start-up ecosystem is in a nascent stage of promise. We need to minimise aberrations like Housing.com, Bharatpe, Zilingo, and Trell. The Sequoia blog may awaken players in the corporate governance space and start-up ecosystem to address the subject with increasing urgency and seriousness.