Trust in leadership is at an all-time low.1, 2 Tales of incompetence, negligence or malpractice dominate business headlines, affecting the lives of millions in our globalising, inter-connected world. Other reports paint a grim picture of executives whose mental and physical health, private lives and values are collapsing under the sheer weight of information and work overload.
How can senior managers make a change for the better in their own lives and, by association, in corporate leadership and governance? Because we would argue that strong and sustainable corporate governance can only happen if the people in charge of organisations can demonstrate solid personal governance. Then we can start taking steps towards a more credible and more widely accepted form a of governance as a whole.
We add the personal governance dimension to the existing concepts and rules of corporate governance.
Seven building blocks of governance
The seven building blocks of personal governance form a pathway for managers to create good corporate governance and leadership. It all starts with ourselves; by establishing a meaningful personal mission and set of values; by engaging in healthy self-reflection and continuous self-development; by better managing stress, balancing our work and private lives and interests – and ultimately our reputation.
The seven principles of personal governance provide important keys to help managers shape their role. As it becomes ever more of a priority to achieve the best possible interplay between work and private life, the ‘orientation framework’ provided by personal governance can make it easier to handle role conflicts between those two worlds.
Organisations need to establish the conditions most likely to nourish good personal and corporate governance and create a sense of shared responsibility together with employees. Among these conditions, personal governance coaching is a powerful way to support reflection, learning and personal development.
New concept, deep roots
Is personal governance anything new? Well, given its special characteristics and its close relationship with top management and corporate governance, we can cautiously say yes.
In recent years, corporate and managerial social responsibility, management ethics and work-life balance have all been talked about at length. Still, personal governance has very deep roots. It has a lot in common with ‘self-care’, a theme we can trace back to Ancient Greece. For Plato, self-care was a pre-condition for moderation in exercising power over others.3
In the 1980s, the theme of self-care was taken up by philosophers, such as Michel Foucault (The Care of the Self). Peter Senge also presents compelling arguments in The Fifth Discipline – the Art and Practice of the Learning Organization. He defines ‘personal mastery’ as the discipline of self-leadership and personal development.
Why managers matter
As the financial crisis of 2008 starkly revealed, managers, and particularly senior managers, have central social and socio-political importance. Via their behaviour, they set the course for economic development. The way in which they relate to their function, their contract and their company can never be treated lightly. As such, the behaviour of managers is openly monitored – and judged – and inextricably linked with corporate governance.
Fredmund Malik is an Austrian economist and business consultant. For him: “The company is the only, (and therefore most important), social institution to create prosperity. It demands management. So management is the most important shaper, developer and directive organ of modern society – all the more so as state politics, in our global economic context, are pushing at national borders and have lost any effectiveness in answering the questions that matter the most. By inference, management is also the most important profession in a company. Almost everything depends upon the quality and conscientiousness with which the profession is practised. High demands need to be placed upon management – and fulfilled.”
There’s no question about it. The societal influence of companies (large companies most directly, small to medium companies more indirectly), and therefore their managers (our so-called economic leaders) is enormous. Not surprisingly, that influence has been repeatedly seized upon in discussions about top management salaries.
“ORGANISATIONS NEED TO ESTABLISH THE CONDITIONS MOST LIKELY TO NOURISH GOOD PERSONAL AND CORPORATE GOVERNANCE”
Yet, in these statements, Malik is only dealing with the commercial aspects of societal health. As we have experienced, the role of companies and their management has also been dragged into the epicentre of world events, giving them an unprecedented social role and responsibility. Are supervisory and executive bodies sufficiently aware of their impact on society? Whatever the case, the conclusion is clear. Functions with this much influence on society need outstanding personal governance if they are ever to practise credible corporate governance and guarantee their positive effect on the world around them.
Welcome to personal governance
In summary, corporate governance has central, social importance. Many, if not most, people have been directly affected by the successes and failures of large private and state-owned businesses on an emotional, financial or even existential level.
Personal governance, meanwhile, is a conscious, strategic and operative/situational form of self-steering and permanent personal development. It is a beacon for the way in which we lead our lives and organise our private CV.
It is a psychological contract with ourselves. This contract implies expectations regarding our actions and commitments. An important corollary – playing a key role in personal governance – is the psychological contract between company and employee. This regulates mutual expectations in a way that goes beyond the formal framework of the employment contract.
“PERSONAL GOVERNANCE IS A CONSCIOUS, STRATEGIC AND OPERATIVE/SITUATIONAL FORM OF SELF-STEERING AND PERMANENT PERSONAL DEVELOPMENT”
Personal governance is aligned with a personal mission, one that takes equal account of private and professional goals and is based upon these. Our personal mission also covers social and or political engagement.
The seven principles of personal governance — code of best practice
So, what do you ideally see in a director who embraces personal governance?
- Life plan and goals A personal mission within easy reach, serving as a common thread and leitmotiv
- Ethical behaviour A high-awareness of their personal value system and ethically responsible action principles
- Self-reflection High capacity for self-assessment and self-regulation:
■ They opt for functions in which their strengths and preferences can most ideally be expressed, avoiding (or clarifying) role conflicts (clashes between private or professional roles)
■ They are aware of the most productive use of time, allocating their energy accordingly
■ They regularly reflect upon and check their behaviour. For example, via coaching, peer coaching and feedback
- Dealing with stress Knowledge and recognition of personal stressors (destructive causes of distress, i.e. negative) and awareness of the right (work)load for themselves and for others:
■ Coping strategies (ways to overcome problems and diminish load) are close at hand and are situationally deployed, checked, adapted and, when necessary, effectively substituted
■ They are able to reach out for help in difficult situations – via coaching, professional/personal consulting, etc
- Personal development Developing (self, others) via ongoing study and inquiry
- Personal interests and passions Strong fields of interest and passion outside the scope of professional responsibilities:
■ They can experience ‘flow’ experiences (Mihály Csíkszentmihályi) – a state of complete immersion in an activity
■ They visibly and skilfully stake a claim on their personal space and time
■ They make space for political and/or social engagement
- Reputation Alertness to personal reputation and that of company
Working with the principles — adopting and adapting
How can we make the step from recognising the seven principles of personal governance to really anchoring them in our daily practice and behaviour? Seven principles are neither definitive nor conclusive. We should constantly adapt them to our fresh experiences and discoveries. We should put them in a situational context, taking account of our personal needs and our current, individual ‘reality’. As such, the principles are intended to act as a ‘working paper’.
This brings us to another important point. It might seem as if compliance with the seven principles will turn us into superheroes. Not only will we achieve a perfect balance between all facets of our professional and personal lives but we’ll also make an active contribution to the common good! However, this perfect (and probably rather restless) person would find almost no time for the all-important passive regeneration, which is handled in principles 5 and 6.
Finally, the conditions within each principle don’t all need to be fulfilled simultaneously. In any case, this is impossible. In the course of our lives, it’s a question of striking a balance, taking individual principles into account to a minimal degree, without accumulating a mass of demands and creating overload.
What’s next?
So far, we have presented the case for personal governance, provided definitions and introduced the seven principles of a code of best practice. Each of these principles, with its leading questions and vital signs can be unpacked further.
In our next article, we start with the personal mission. What does a personal mission really mean? What key questions do we need to ask ourselves from a managerial and organisational perspective?
Footnotes:
1 2015 Edelman Trust Barometer – 15th Annual Trust and Credibility Survey
2Crossan, Mazutis and Seijts, (2013) In Search of Virtue: The Role of Virtues, Values and Character Strengths in Ethical Decision Making. Journal of Business Ethics, 113:56seven–581
3 Plato, Pseudo Platonic Dialogue of Alkibiades
