A couple of years ago I wrote this post about the responsibilities of leadership, but in light of the recent Wells Fargo bank scandal and other examples of unaccountability, I feel compelled to republish it again.
“On the sea there is a tradition that with authority goes responsibility and accountability. Men will not long trust leaders who feel themselves beyond accountability for what they do. And when men lose confidence and trust in those who lead, order disintegrates into chaos and purposeful ships into uncontrollable derelicts” Wall Street Journal – Editorial 14 May 1952
A walk through any of the old New England whaling towns reveals several houses, much larger and grander than most, lined up facing the sea. These were the homes of the sea captains. With the risk also came the rewards for a job well done. But if the captain couldn’t get the job done, or had a string of bad luck with the weather, his bonus at the end of the trip was meagre and if a captain earned a negative reputation, very few able seamen would sign on for his next voyage and the ship owners would find other captains.
Imagine the following scenario:
An experienced sea captain sets sail with a hired crew across the ocean. He takes command, charts the course and orders the sails set to his liking. For the first part of the journey the weather is fair, with a following wind. Perfect sailing weather. The crew are pleased to be making such good progress and remark on how good a sailor the captain is.
Out of nowhere the weather turns and that night they find themselves in a raging storm. Everyone is frantic, working as hard as they can to keep the ship together. Without warning they hit a reef and run aground. In the morning an exhausted crew awakes to see their captain rowing off towards shore in the only lifeboat, the boat filled with food and equipment.
An absurd scenario? Isn’t the captain supposed to stay with the ship until the last man is off or the ship can be repaired? Perhaps not any more! Only recently we have all seen the deadly aftermath after the captain of the Costa Concordia cruise liner abandoned ship ahead of passengers and crew.
An even more glaring shirking of leadership is the behaviour of Sir Fred Goodwin, “rowing off to safety with lots of goodies” while the Royal Bank of Scotland teetered on the brink of collapse, begging for more and more UK taxpayer money to keep it afloat. Or the many senior executives who oversaw AIG’s market value collapse from $100B to $1.4B yet walked away with millions in bonuses and perks. And the world is still suffering from the global economic crisis resulting from the reckless profiteering of banks “too big to fail”.
And even more recently the Wells Fargo scandal (2 million fraudulent accounts opened over a 4 year period) where the CEO, in front of a Congressional inquiry, blamed it all on lower level employees. Wells Fargo was fined nearly $300M and suffered huge brand reputation damage, while John Stumpf, the CEO, resigned and walked away with a $134M retirement package.
Is the ethos of leadership and responsibility just a relic of the past?
Here is an abridged list of the responsibilities of a US Navy captain:
Responsibility for Personnel: A captain is responsible for the actions and personnel of the ship that he commands. The Navy holds the captain accountable for any bad behavior that takes place on his ship, any neglect of duty or poor management of his officers. He will be answerable to the military government. Thus, the Navy captain must know what is happening on his ship at all times and must be aware of any improper situations occurring on the ship. The captain has a duty to be a role model for all of the officers and, thus, has to follow the rules exactly. If the captain doesn’t follow the rules precisely, he cannot expect the subordinate officers to follow the rules.
Responsibility for the Ship: The captain is also responsible for the ship. She must ensure that the condition and quality of her ship remains in the same condition as when she first received the ship. This means that she must perform continual inspections to ensure that the ship is fit for sea. Furthermore, since the captain has such a significant responsibility toward the ship, the captain cannot go on a leave of absence from the ship during her time as captain. The only exception is when the captain’s commander-in-chief orders the leave. Otherwise, the captain has a duty to always be present on the ship and ensure that the ship remains in pristine condition.
Returning the Ship: If the ship is out at sea, the captain has a duty to keep the ship out for the required time. However, if there is a reason that he must return the ship, he needs to be careful where he chooses to anchor the ship. An accident to the ship, for example, is one of the possible reasons for the captain to return the ship earlier than expected. If he must return the ship, the captain has to choose where to anchor it by the depth of the water and the dangers of the coast.
Anything that happens when the ship is out to sea is the captain’s responsibility.
Somewhere between the helm of a ship and the head of the boardroom, the responsibilities of leadership have been diluted, with dire consequences for the global economy, the “brand of business” and millions of employees.
Think it’s old-fashioned to demand that the responsibilities of leadership be the same for sea captains and chief executives? Perhaps, but it’s not too old fashioned to think that the principles and responsibilities (and behaviours) of leadership need to be rethought in the 21st Century. In fact, it’s long overdue.
The sea captains of old didn’t own the ships but were hired by the owners (usually a syndicate) to take stewardship of the assets (cargo, ship and sailors) and to do their job as contracted. The analogies between a cargo ship and a modern business are not too dissimilar, except for the stewardship piece. Modern CEOs and executives seem to have forgotten that bit of the job – the stewardship of “other people’s money”!
Time for Leadership Responsibilities?
So who is going to start the dialogue and take a stand for a new set of leadership principles? If your answer is the government or other regulatory body, then you’ve just failed the test. You cannot legislate leadership!
The only ones with the responsibility to lead this rethinking of leadership principles are the CEOs themselves. If they got together, crafted a set of “Responsibilities for CEOs and Principles of Leadership” and then took a stand in their own companies and their industries for holding themselves and others to these new standards, things would change.
All manner of organisational processes (performance evaluations, hiring profiles, compensation formulas, job profiles, etc.) would be changed to line up with the new standards. A renewed culture of leadership would be built, much sturdier and more seaworthy.
As of today there are no leadership standards for public companies that I am aware of, yet every sea captain knows by heart the responsibilities and personal accountability of his or her position.
Time for Dialogue
It’s time to start the dialogue and establish some global leadership principles. Our battered global economy needs the best leadership we can offer.
“No matter how important a man at sea may consider himself, unless he is fundamentally worthy, the sea will someday find him out.”
Written and Posted by: John R. Childress
Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid
John also writes thriller novels!