At dawn on May 29, 2015, Swiss authorities acting on behalf of the U.S. Federal Bureau of Investigation entered a plush hotel in Zurich, Switzerland to arrest nine senior executives of FIFA (Fédération Internationale de Football Association), soccer’s global governing body, as delegates from across the world convened to elect a president to lead them for the next four years. The incumbent president, who had been in office since 1998, at first refused to step down, but pressure from the media, sponsors and fans as the investigation escalated forced him to resign a few days later. The organization’s signature event, the World Cup, had grown into a quadrennial cash cow through the shrewd sale of broadcast and marketing rights. Now, charges of corruption were forcing its governance and practices into the limelight. How could the executive forge a path ahead and what steps were needed to repair the organization’s reputation and survival?
Nine meetings involving 786 directors and would-be directors were held at the Institute of Corporate Directors with the objective of facilitating a discussion on leader character with people experienced in the practice of corporate governance as well as with individuals interested in becoming directors. Following the sessions, a survey of attendees was conducted. This article presents what the authors learned and offers six recommendations for improving the director search, evaluation, performance review and renewal processes: 1. Be explicit about search criteria and include the character dimensions along with competencies. 2. Ensure that whoever does interviewing is, in fact, a good interviewer. 3. When multiple interviews are done sequentially, ensure that each interviewer has a set of questions so that the sessions are comprehensive but not repetitive. Furthermore, schedule a session of all involved in the process to share their observations. 4. Task the search consultant, if one is used, with developing a comprehensive list of referees who actually know the potential nominee. 5. When asking a referee whether they “know” someone, care must be taken to understand the context of this knowledge. 6. If a candidate resists or resents discussion about character, then you should resist the candidate.
Canadian Pacific (CP), a North American railway company, had recently come under attack from an activist shareholder, Pershing Square Capital Management (Pershing). Pershing had accumulated a 14 per cent shareholding in CP and had recently announced its intention to replace the CP board of directors and its chief executive officer. The case reviews the history of CP, its recent performance relative to Canadian National, and the basis for Pershing's allegations that CP had lagged its competitor in terms of performance and that this was attributable to poor governance and management. The board of CP must decide whether to make concessions to Pershing or risk an all-out proxy battle which it may well lose.
Business schools have done an admirable job of teaching competencies, and many business organizations have defined the framework of competencies that are required to be successful in the institution. However, much less attention has been spent on leadership character and the importance of commitment to the leadership role. There is no consistent understanding among executives about what character means, despite a concurrence that it is important. The movie Invictus portrays Nelson Mandela in his first year as the first black president of the newly desegregated South Africa as he persuades not only both black and white populations to support the national rugby team in its effort to win the World Cup but also the players themselves. It provides a truly brilliant illustration of not only the competencies required to lead but also the leadership character and commitment that are needed to lead during trying times.
A procurement officer has got himself into some difficulties by trying to do what he thinks was the right thing in being responsive and accommodating for an internal client. In doing so, he has violated a number of unwritten ethical expectations of his role. He is wondering what he could have done differently and, specifically, how to handle an upcoming conversation with his chief executive officer about his future with the company.
The regional manager of Latin America for a Canadian defence contractor must decide whether or not to employ a South American agent to represent the company and negotiate an agreement to supply body armour to the procurement group of a Central American country's armed forces. The Canadian manager is concerned about whether or not the employment of this agent poses a reputational risk to his company, given the current Canadian legislation with respect to the corruption of foreign public officials, legislation that parallels that in the United States and in most other developed countries. He also wonders whether he will even be able to build business in that region if he opts against using agents with local knowledge and connections.
Corporate directors should look for three criteria in executives: competencies, commitment, and character. This article focuses on leadership character, the least understood of the three criteria. The authors met with over 300 business leaders on three continents, who identified character weaknesses or defects — including overconfidence, lack of transparency, and lack of accountability — as central to the Global Financial Crisis. The authors posit 11 dimensions of character — integrity, humility, courage, humanity, drive, accountability, temperance, justice, collaboration, transcendence, and judgment. They examine why character has not been studied extensively, given its relation to the crisis, and point to the lack of resources that the private and public sectors have spent on studying character (in contrast to competencies), as well as the common misperception of character as a “soft,” non-quantifiable construct. Character is revealed by how individuals behave in particular situations, and a full character assessment requires a deep and wide-ranging examination of a person’s life and work history over an extensive time period. Directors can influence character development in their organizations by discussing dimensions of character during appraisal processes, developing formal leadership profiles, and introducing character-focused discussion into their own board assessments.
There is arguably no more important role for senior leaders than to prepare organizations for risk. Firms face different types of risk, including strategic, operational, market, liquidity, credit, and reputational. This article starts by exploring risk leadership at TD Bank Group and Maple Leaf Foods Inc. In 2002, TD Bank’s leadership lowered its risk tolerance following years of volatile and uneven performance. It avoided excessive risk (including sub-prime lending) and grew from the 55th-largest North American bank in terms of market capitalization to the sixth in 2012. Maple Leaf Foods Inc., a large food-processing company, underwent a crisis in 2008 when its processed meats were implicated in 23 deaths due to Listeriosis. The firm then developed a world-leading food-safety culture, mobilized an increased industry focus on food safety, and recovered financially. <br><br>Five activities that lead to the establishment and maintenance of a strategically driven culture are described. “Think it” stresses the need for a deliberately conceived culture, rather than one that is merely emergent. “Talk it” emphasizes the need for messages and expectations to be articulated forcefully and clearly. “Walk it” suggests that leaders must not deviate from messages about a desired culture, and should offer organizational rewards for culturally congruent behaviours. “Reinforce it” states that leaders should celebrate the success of their organizational culture, while exercising caution. “Check it” suggests that leaders must link their current culture with their desired future culture and prevent the emergence of unplanned, undesired manifestations of culture.
The sum of virtues, values, and traits equals good character, which, in addition to competence and commitment, is one of the three components that make a leader effective and respected. For many, however, virtues and values remain undefinable or elusive. These authors define and de-construct them, and in the process demonstrate how character helps people in their personal journeys to become better leaders. Furthermore, they explain how character develops and why it matters.
TD Bank Group was one of the few large financial institutions in the world to have prospered during the financial meltdown and subsequent recession in 2008/9. It did this without any government assistance. Furthermore, it emerged from the crisis substantially larger in terms of market capitalization and assets while having the best performance of any of the Big-5 Canadian banks in terms of stock price and total shareholder return during the period 2003-2011.<br><br>The case describes many of the actions led by TD’s CEO, Ed Clark, following his promotion to that role after severe credit losses at the bank. It describes a shift of strategy that focused on reducing market, credit, and liquidity risk while increasing strategic risk. It also describes in depth the governance and management approach to risk at the bank as well as identifying important issues such as the establishment of a risk-management culture, the relationship between executive compensation and risk, and the formulation and promulgation of a clear statement of risk appetite. Further, it allows the instructor to focus on the many types of risk that have to be managed in a financial organization including strategic, market, credit, liquidity, operational, insurance, legal/regulatory, and reputational risk and how these might be traded-off against each other.<br><br>Students are required to identify which actions taken by TD are likely to have contributed to the bank’s excellent performance and the extent to which those actions may have been reflected in the performance of the bank’s stock. They need to consider whether avoiding market, credit, and liquidity risk was worth it for TD given that the company did not achieve superior performance to its peers before the financial crisis, a fact that was reflected in its disappointing stock performance.
A.P. Nichols, a distributor of parts in the maintenance, overhaul, and repair industry, is facing the need to realign its strategy to cope with a competitive environment. A key component of this realignment involves changes to the culture and compensation of its sales force while simultaneously building sufficient sales capacity to take advantage of opportunities in key markets. The case focuses on the newly hired vice president (VP) of sales, who is tasked with leading the change initiative. Immediate issues facing the VP include: 1) alignment of the client service representative (CSR) team to the strategy and new model; 2) infrastructure and the need to make a commitment to invest in bringing it up to a best-in-class level; and 3) building a critical mass in the CSR group.
This supplement to Maple Leaf Foods, Inc. (A): The Listeriosis Crisis describes what the company and its chief executive officer did to cope with this crisis in the days and months following.
The chief executive officer of Maple Leaf Foods, Inc., a food processing company employing 23,000 people in more than 50 locations, has just been advised that a deadly outbreak of Listeriosis has been linked to products shipped from a Maple Leaf Foods plant and that there have been several fatalities and many more severe illnesses linked to this contamination. He must decide what to do immediately, within the next few days, and in the longer term to deal with the problem and the effect that the negative publicity will almost certainly have on the company.
Sara Tsien must decide what performance assessment to give one of her employees who has, uncharacteristically, failed to meet one of her key objectives for the year. The situation is difficult for several reasons; the causes of the unacceptable performance are not clear; the employee has previously received excellent appraisals, including a recent one by the vice-president; and the employee was absent for a good part of the year on maternity leave. The various factors that influence sustained performance (ability, motivation, resources, role clarity, reinforcement) are examined, as well as steps leaders can take in improving performance of those for whom they are responsible.
A newly promoted assistant deputy minister of business and trade must decide which of two candidates to recommend for her previous role as executive director, business and consumer regulation. One candidate is creative, innovative, client focused and an inspirational and charismatic leader with a history of ruffling some feathers with other departments within the government. The other candidate seems to lack drive and innovativeness but has earned the respect of his team and others within various government departments with whom he has interacted. This appointment is being made at a time of change within the government as it faces severe budgetary pressures and believes that there are opportunities to do many of its traditional functions in new, more cost-effective ways.
The "vision thing" is still with us, but while leaders insist in having a compelling vision, the fact is that many - both the leaders and the visions - leave people standing still, unmoved. A leader who engages stakeholders when developing a vision will, in the end, articulate one that resonates strongly and impels people to act.
New metrics have been introduced to a software technical support call center operation. These metrics have revealed a wide range of performance between employees both for time taken to answer customers' questions and the customer's perceived quality of service. The call center manager is wondering how to make use of these metrics. He is inclined to go public with them, whereas the head of human resources believes that this could be damaging to employee morale and will also make it more difficult for the company to recruit in a market experiencing labor shortages.
Visualize a leader with virtues such as courage and integrity, as well as five key types of intelligence, and you've got a clear picture of the cross-enterprise leader. So equipped, such a leader has what it takes to adopt the enterprise-wide perspective that is necessary to make the right decisions for creating and delivering value to all stakeholders. These Ivey professors describe how an organization develops the type of leader to succeed in today's dynamic and complex business environment.