Corporate Lessons from Sports Field

Opening Ceremony

Asian Games are in full swing in China. After the grand opening China is leading in the games tally and is actually way-way ahead of other participating countries. Watching the games, I can’t help comparing the corporate playing field with the sports games field.

In sports, viewers marvel at the dedication, commitment and perseverance of sports person. For the country to lead in an international event, both men and women have to compete and win in nearly equal number of games. A sports person is completely focused on his/her game and has to win by playing according to the rules of the game. If rules are broken, or a sports person takes performance enhancing drugs, he/she is immediately barred. Victory is always based on fair play and great performance.

The corporate games show somewhat different picture. After the financial crises there was a huge cry that CXO’s are rewarding themselves with high pay packets and bonuses though they have jeopardized the organization. The penalties for wrong doing appear to be light and most escape any form of formal punishment. The increasing trend of white color crime indicates a prevailing mind set of “ rules are meant to be broken”. Gender inequality in boardrooms is prevailing despite various efforts, even in developed countries.

Here are three posts which highlight the abovementioned issues of the corporate world. The question is should we spend some time learning to play according to the rules from sport-persons? Click on the headings below to read the full post.

1.    To Dispel or Not Dispel…Legendary Board Myths by TK Kerstetter (via The Board Blog)

This week I was asked to speak at a service club luncheon to a group of about 250 prominent Nashville business people. My topic was corporate boardrooms and I decided to address some of today’s legendary board myths. The following were the myths and my feelings on legitimizing or dispelling them.

Myth #1: CEO and executive compensation is out of control
I was hoping to dispel this myth, but actually, our research shows that this is not just a myth. For the last five years, more than 60% of corporate directors have felt that boards cannot control CEO pay, although interestingly, only a handful think that is the case for their company. Actually, the more I think about this topic, the more frustrated I get. Plain and simple, we still don’t have a good system that truly pays executive management for performance in both the upside—and the downside—of a capital market cycle. Here’s what bugs me: Right now it’s all about optics, not pay for performance. If the stock price and earnings are up, executives get big paydays. It doesn’t matter if they have improved the company or not. From 1990 to 2000 we experienced the longest running bull market since World War II, and stock options made mediocre executives millions even though they didn’t increase market share, improve earnings over average industry performance, or move up in any peer group analysis. So we got spoiled

2.      Women severely under-represented in corporate boardroom by Cathy Rose A. Garcia and Park Min-shik (via Korea Times)

A glaring lack of female directors on a company’s board of directors is a sign that it is not a “healthy business,’’ according to Lucy P. Marcus, founder and chief executive officer of Marcus Venture Capital.Many Asian and Korean corporations have little or no female representatives in boardrooms, but Marcus says this is sadly still an all too common case on corporate boards around the world.

“There is no doubt that women are severely under-represented in the boardroom, and this is not only the case in Asia, but all over the world. The lack of women on boards, however, is a reflection of a wider problem with diversity: it is one of color, age, international perspective, and more,’’ Marcus said in an interview with the Hankook Ilbo, a sister paper of The Korea Times.

Marcus, whose company works with venture capital and private equity funds, institutions and corporations, said that as an investor, the lack of diversity in a corporate board sets her alarm bells ringing.

“When I see a business with a board that has a preponderance of people with similar, if not identical, profiles, this is a signal that it is not a healthy business… Its good corporate governance and good business sense to reflect a range of the organization’s stakeholders,’’ she said.

Data shows the percentage of women board directors in Asia is only 1.8 percent, compared to 20.5 percent in Nordic countries and 14.1 percent in North America. Marcus noted that having diversity results in a more capable and better functioning board that is better equipped to deal with various challenges

3.         A Wave of Bank Prosecutions Is Unlikely by Peter J. Henning (via Dealbook)

The inspector general of the Federal Deposit Insurance Corporation told The Wall Street Journal recently that the agency had opened criminal investigations into about 50 banks that had failed since the financial collapse in 2008. While that makes it sound like prosecutors will soon be filing charges against a number of bank executives, do not hold your breath waiting for a flood of prosecutions.

The last time there was a surge in bank fraud prosecutions was in the early 1990s during the savings and loan crisis that led to the collapse of nearly 1,800 financial institutions. Unlike that era, the number of bank failures has totaled 311 since 2008, and most of those were smaller institutions that got caught up in construction lending.

Although some larger banks did collapse in 2008, like Washington Mutual and IndyMac Bancorp, those failures appeared to be more related to aggressive mortgage operations that fell apart during the collapse of the housing market rather than misconduct by executives. And banks were hardly the most prominent contributors to the financial crisis, with the mortgage lender Countrywide Financial playing a significant role, while the collapse of Bear Stearns and Lehman Brothers triggered much of the upheaval in the bond market.

What do you say, should the corporate world learn some lessons from sports people to achieve performance ethically?

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11 comments on “Corporate Lessons from Sports Field

  1. Dear Sonia,

    Good poser that! I am reminded of the games people play. We are watching one of the most absorbing games played out by two of the bast managers in the country, both of them women. Whether it is politics, sports or the corporate world, competition enhances performance. So sports is a good example

    And one more thing Sonia..the figures you have quoted will improve with time They have to. The writing is on the wall

    Sethu

    • Sethuram,

      Thanks for reading the blog. I agree with you competition to some level enhances performance, specially those who are externally focused. Those who are internally focused generally compete with oneself only.

      However, there are plenty of negative connotations to competition. We are forgetting that the corproate world is breaking all possible rules in the pursuit of money. The end has become more important than the means. In sports, the means are most important.

      So differences are there. As for figures of females at higher levels, I think it will take time. Western culture is equating sexual libration to equality of genders. Sexual libration is no way equality of genders, it is sometime a good way to objectify the opposite gender. The other aspect is women are supposed to be physically weaker than male gender. In sports they are fighting for their country’s lead alongwith the men. However, where women are generally even in US more educated then the men, they are earning lower salaries, finding it difficult to reach senior managmeent positions, because of gender bias or shall I say protection of the male bastion.

      Of course that gets me thinking are men so insecure about women entering their turf and taking over, that they need to fight and protect their turf?

      Sonia

  2. Dear Sonia,

    If completion has negative connotations, is it really competition in the true sense? I don’t think so.

    A quantum change in attitudes will definitely take time, I agree. What I meant was, an irreversible process has set in and I think women can take advantage of it provided they act responsibly and with maturity, which they are capable of doing. Women should also beware of and shun condescending attitudes of women. I see this trend increasingly in my interactions

    Having said all this, let us accept that women will have to realise that some roles like, for example, supervision in a construction site where night shifts are involved or working in disturbed areas may not be suitable for them

    Sethu

    • Sethuram,

      That is exactly what I am against, why should men be deciding what is suitable for women. If a women wants to work at construction site, she should. during dam and bridges construction, there are number of women labourers working on the site. So why cant a women be the supervisor.

      In most countries now, women are in the army and police, so why should there be difference. If they can physically train themselves to fight, then they are equally capable. It is a personal choice if they want to fight on a battlefield, fly planes, or compete on corporate minefield. 😮

      So these juandiced attitudes need to go, if men can be nurses, home makers, dancers, cooks, etc. then women can be fighter pilots, cops, astronomers, investigators, bike riders and whatever else they choose to be. They are quite capable of understanding the risks, and it is their choice whether they want to live with it or not.

      Sonia

    • Sethuram,

      I agree with you that women should not have condescending attitude towards men. But I think they are returning the favor, they have been on the receiving butt for this kind of attitude, and they are giving back what they learnt.

      So first men have to give up their high handed attitude if they wish to be treated with respect by women.

      One only gets back what one gives to the society. Expecting women to follow higher moral ground when men haven’t done so is setting unrealisitic expectations. Women are in all terms equally good and bad as men. That has to be accepted first.

      Sonia

    • Sethuram,

      This discussion is turning interesting. I have another question.

      Poor women work on construction sites in night also, some sleep on foot paths during the night, and have no protection whatsoever.

      However, middle class Indians say that middle class women should not go out in the night, take night jobs etc. because safety is at risk.

      My point is, is it alright to rape a poor woman and not that good if one rapes a rich woman. The psychological and physical pain is the same. So where is the difference.

      Why can’t men say that we shall be better behaved and it is demeaning on our part if women fear or feel insecure and threatened in our presense.

      As you have said women should not have condescending attitutude. Women are not physically attacking men (in most cases, there are some rape cases where women have raped men) irrespective of the temptation or opportunity. So why is that men cannot have the same control on themsleves. On the first opportunity available, they think women are soft targets, hence if attacked they can be exploited.

      Shouldn’t men be taking a moral higher ground in this situation and say irrespective of how vulnerable a woman is, we shall not be exploitative?

      Sonia

  3. Dear Sonia,

    I had made a correction in my post and meant that men should not have a condescending attitude

    You have floored me with Your arguments. I agree with You if all You say is practicable. In the EPC industry, which I know well, some of the women I have come across shy away from long deputations at sites. This may not be the rule in future, I agree

    As for wrongdoing I accept Your comments. Women behave with more maturity

    Sethu

    • Sethuram,

      Thanks for discussion. Again I will point out a situation which I faced some years back in respect to travelling.

      I was working in a consulting firm and the CEO was given the mandate to improve the number of women workforce to atleast 25% from the prevailing 5%. The male senior managers would not hire women stating that jobs require travelling and women are unable to travel. I took up an assignment (2001-2002) in Srinagar and travelled frequently during high terrorist activities. Whenever a male senior manager asked for references to clients, so that they can provide complimentary services, I requested them to come with me to Srinagar. I did this in front of the CEO very many times, who fortuantely knew me well and had a great sense of humour. None of the male senior managers ever came with me to Srinagar to be introduced to the senior management of the client team.

      So I think this again is part of the jaundiced thinking, it depends entierely to the person and not the gender whether they like travelling and what risks they are willing to take for it.

      I think in these small things, men are perpetually being condescending to women. When women do the same, the male ego is hurt. Are we saying men are more sensitive than women, hurt more easily? Or are we saying women should get used to all the hurt, as they have been used as punching bags for centuries? Or are we saying men will change their stance according to present situation and revert back to whichever they please when they please?

      I generally get lost in what is being communicated 🙂

      Sonia

  4. Dear Sonia,

    I love this. I accept that many men are hypocrites, but that doesn’t mean all of them are!!!

    And Sonia, I agree with what You say fully. Women these days do NOT allow themselves to be punching bags though!! Maybe a difference in perception because I have always respected and admired women. 🙂

    Sethu

    • Thank you for an interesting discussion. If you read today’s post on Taleb, his interview in NYT, the last line on women is interesting and appropriate. :O

      Sonia

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