Business and accountable governance obligations of leadership

The successful leader according to Kraemer shows absolute fidelity to four principles of value-based leadership
Self-reflection : the ability to identify and reflect on what he/she stands for, his values and mission;
Balance/Perspective: the ability to see the situation from multiple perspectives including different viewpoints to gain a holistic perspective and understanding;

True Self-Confidence: accept yourself, recognize your strength and master your skills as well as your weaknesses for continuous improvement;
Genuine humility: not forgetting who you are, appreciating the unique value of each individual and treating everyone with respect.
Appreciating these principles leads to the discovery of the best self who will build the best team that can fit in and fulfill the goals and objectives of the organization or nation. Consequent on these is the discovery and promotion of the best investments whose end-product is the best citizen.

Governance, History and Development
It seems evident that values, motives and styles of the leadership are the lynchpin on which leadership revolves and ultimately influences the culture of the society. There is always an underlying and implicit synergy between the values of the leader and the followership filtered through the perception of the leader by the followers.

In the 6000 years in which the history of leadership, development and social progress have been documented clear cut patterns have emerged. For example, leaders whose needs are driven by external forces tend to emerge in societies where there is limited constraints to the exercise of power. In such societies there are no institutions to restrain the use and abuse of power leading to great wealth and unchecked power for those in control. This encourages the emergence of extractive economic institutions which confer great profits and wealth with the implicit message: control of power bestows great wealth either by extracting through taxes, expropriating the assets of others and/or by setting up monopolies. This is why the earliest model of power tended to be feudalistic. This model of social organization created huge inequalities in societies but also bred instability as many wishing to take over power to control the society resorted to infighting and even civil wars.

There is also the tendency for successive regimes to be even more extractive thus increasing the level of competition within the elite. The civil wars and the intensity of extraction cause great human suffering even as the society descends into lawlessness, state failure and political chaos destroying all hopes of economic prosperity. The rulers in such absolutist political systems neglect all factors that will encourage the emergence of forces conducive to economic progress for fear of creative destruction and may even take explicit steps to block the spread of new industries and new technologies.

Absolutist rulers are fearful of the forces of creative destruction because they tend to redistribute income including wealth and political power. On the flipside, is the emergence of inclusive political institutions. These inclusive institutions create constraints against the untrammeled exercise and usurpation of power. It fosters pluralism in the polity even as it also fosters inclusiveness in the economic system as new forces and interests emerge such as merchants, industrialists and the new class of diverse political interests. We must also note that inclusive political and economic institutions bring with them a level of political and economic centralisation so that the nation-state can enforce law and order, uphold property rights and encourage economic activities by promoting or investing in public services.

It is perhaps appropriate to indicate that in the modern era the emergence of inclusive and plural political and economic systems have often followed a period of convulsive social collision in the different countries where these took place, what many call revolution. In Britain we had the Glorious Revolution presaged by regicide and dictatorship. In France we had the French Revolution of 1789 which in one fell swoop abolished the feudal system. The first article of the Constitution of 4th August 1789 stated:
“The National Assembly hereby completely abolishes the feudal system. It decrees that among the existing rights and dues, both feudal or censual all those originating in or representing real or personal serfdom shall be abolished without indemnification.”

There is also the American Revolution (1787), the Meiji Revolution (1860) in Japan and the communist revolutions in Russia (1917) and later in China (1947). The incomplete revolution in Korea led to the division of the Korean peninsula to North and South Korea with two political and economic systems. As we can surmise not all revolutions ended in inclusive political and economic systems. As it has been observed the rich countries of today are those that undertook the journey of industrialization and technological change and the poor ones are those that did not.

As Acemoglu and Robinson have stated
“World inequality exists today because during the 19th and 20th centuries, some countries were able to take advantage of the Industrial Revolution and the technologies and methods of organization that it brought while others were unable to do so. Technological change is not only one of the engines of prosperity: it is the most critical one”

Moreover the societies which permitted and provided relevant incentives to their citizens to invest in new technologies which enabled them to grow rapidly in contrast to the nations firmly in the grip of extractive political and economic institutions which could not generate such incentives. Spain and Ethiopia before the dawn of the 19th century were in the grip of absolutist control to the extent that the environment provided no incentives and the incipient economic institutions asphyxiated whatever initiatives that could thrive. In Nigeria colonialism strangled whatever progress that could have arisen in the political and economic sphere. Before then was the slave trade that exported the best of the human capital of these societies. The damage to the indigenous Nigerian political and economic system can best be appreciated when it is remembered that the Itsekiri nation had ambassadors to the Portuguese royal palace in the 16th century even as the streets of Benin City enjoyed street lights at night long before London could enjoy the same facility.

The situation in South Africa is of special interest. There a dual political and economic system operated such that African miners’ wages fell by 30% between 1911 and 1921.

By 1961 despite relatively steady growth of the economy miner’s wages were still 12% lower than they were in 1911! On the other hand South African Whites had property rights, invested heavily in education while the extraction of the minerals gold and diamonds was firmly in the hands of the White South Africans who sold them at phenomenal profits to other individuals in the global market. Over 80% of the population was excluded from any meaningful economic activities given the chokehold the white population exercised over the political system under the apartheid system. Black South Africans were precluded from using their talents and skills to become business men, entrepreneurs, scientists or engineers.

While the Africans grovelled in poverty white South Africans luxuriated in affluence comparable to the best living standards of their cousins in Europe. This oppressive extractive system could not last forever. By 1970, the South African economy had stopped growing and by 1994 apartheid finally crumbled as did the Soviet Russian system a few years earlier.

To be continued on Monday

Professor Anya delivered this paper at the second annual lecture of the Niche Newspapers in Lagos recently