CULTURE, LEADERSHIP AND COMMUNICATION / Alfredo Ventura Mari

I recently had the good fortune to attend to a lecture where Ramón Pueyo, Javier Perera, Ruth Ortiz and Alberto Andreu talked about Corporate Governance and the department dedicated to people, about how both are related in the strategy of the business. Having done a Master's Degree in this field, I want to take advantage of this small article to reflect on the ideas that were discussed in the seminar and the concepts learned during this year in the #MDPO.

From the "Social Responsibilities of the businessman" by Howard Bowen, in 1953, where the concept of Corporate Social Responsibility is introduced for the first time, until it lands in Spain, with its legislative articulation in Law 31/2014, with which "the Capital Companies Act is amended for the improvement of Corporate Governance, attributes to committee the non-delegable responsibility for CSR policy, in its article 529 ter. 1" (Andreu A. 2020), Corporate Governance has been evolving and covering more and more ground. From shareholder to stakeholder, from complying with the rule to going beyond. The whirlwind of legislation that is coming from Europe (450 legislative initiatives) with, for example, "The European Green Deal Investment Plan" or the European taxonomy (cataloging of sustainable projects), will require companies to maintain a flexible structure to adapt to change, but with a "WHY" and "HOW" that are present throughout the organization. This is where the committee of Administration and the department of Human Capital will play a fundamental role in the coming years.   

Personally, I understand Corporate Governance as a set of rules, principles and processes in decision making that ensure that business is properly managed, seeking the maximum benefit for both owners and stakeholders, and that it also minimizes friction in the short and long term. Ramón Pueyo described this friction as a military concept where what had been planned is confronted with the reality of the battlefield, and the same thing usually happens at business . An example, which we see on a daily basis, are companies that, as part of their values, uphold transparency and yet no auditor is able to understand their consolidated accounts, or the famous work as a team... but in companies with "Up or out" systems.

In one of his latest articles "Danone case: attack on sustainability or failed management of change? (2021)" Alberto Andreu talks about the change in market capitalization of the companies that led the market in 2001 and in 2021, and how Corporate Governance is a tool that companies have Economics real to generate value and compete with the explosion of technology. The fact that Good Governance generates value is conceptualized very well in the 2012 study "Roads to Ruin. A study of major risk events: their origins, impact and implications", where it explains that long-lived companies are those that are well governed.

According to the manuals, good governance requires a committee of Administration that complies, at least, with the principles set out in the CNMV's "Good Governance Code for Listed Companies (2020)" , and by this I mean that the committee must be capable of looking after the long term of the business and all that this phrase entails (independence, size, structure, behavior, etc.). However, this long-term vision will not exist if we do not manage to endow the supervisory bodies with a new conception of a more sustainable capitalism, far from the vision that Corporate Social Responsibility is a foundation here, a donation there, and Greenwashing to hang a poster on the entrance (a more standardized vision in the United States). In Ramón Pueyo's article "Children, companies, advice and the long term (2017)", he talks about how issues related to strategy, to the process of value creation, receive little attention from companies, and that if it is not the committee of Administration that looks to the future, who does?

Lately, every time I subscribe to a webinar or lecture directly or indirectly related to the field of people, it has the word "revolution" in the title, whether industrial 4.0, technological, in spaces of work, in the development of talent, but... do we really want such a disruptive process? Things are not achieved in a day and much less do we change people. In a simple but illustrative simile, does a person's health change by going to per diem expenses for a week or does it change when he gradually learns which foods are healthier and modifies his eating habits?

Chapter 2 of guide also talks about the fact that corporate transformation must come from a "Top-Down" system, so when a Compliance or CSR audit is performed, the first thing that is sought is to have a code of ethics that marks the behavior from the strategic direction, but in my opinion, people are the engine of this transformation, constant, from day to day, from small gestures, either with a boss who does not let you stay more than your hour in the work, with a policy of digital disconnection, leaders committed to the training or even with something as simple as turning off the light when leaving the work (The offices are beautiful at night but turning off the lights today can save the planet tomorrow).

Thanks to this Master's Degree I have understood that the department of people plays a crucial role in Corporate Governance and that it will be the people themselves the core topic when facing such a changing world. A department that is capable of structuring agile organizations (and by this I mean clear KPis) with well-defined responsibilities and accountability systems, will have a much easier path to good governance. How is this achieved? Transparency in the selection systems, eliminating biases, with diverse teams capable of contributing their own vision, and very importantly, as Ruth Ortiz pointed out, with compensation systems, which are nothing more than purely internal and external communication (also being measured by all proxy advisors) and which cannot, for example, aim to have a long-term culture with short-term objectives.