Ethics, Benchmarks and Leadership

Well I’ll admit it. This blog has been inspired by all the noise at the Co-op and the recent letter by the group CEO Euan Sutherland. Now I don’t know enough about how the coop is run or about Euan Sutherland to comment on the rights and wrongs of what is going on there. I am, however, struck by a couple of standout comments and revelations. The first is about his pay, the second is his apparent comment about the group being ungovernable.

So let’s start with the basics. The Co-op aims to be a group that is built on a strong ethical foundation and that is governed and answerable to its members. A laudable but challenging goal since it is likely that everyone one of the coop’s members (of whom I am one) will have a slightly different view of what those values and ethics actually mean. So this is where Leadership steps in. Part of the goal of any CEO in such an environment is to unite the members behind them, to create a shared understanding of what those values mean and how they will play out in reality. This is real vision building stuff. Actually co-creating a genuine sense of shared purpose amongst adn with people who actually have a choice and power over your actions. Not the esratz variety of vision we so often get in organisations today which is a hollow ambition created in a cupboard by execs that is then ‘sold’ to the rest of the staff. After all if you have to get ‘buy-in’ you’re selling, not engaging – if you’ve co-created you don’t need to get buy in!.

This is much more akin to a political process but one where results are faster and accountability sharper and there is no party system churning out neat packages of policy that members have to agree to or back the other party. And it’s a process in which trust plays a big part and this is where the issue of pay comes in.

So I have no doubt that Euan Sutherland’s pay is on a par with the current rates of pay in C circles around the world for organisations as large and complex as the Coop. But that doesn’t make it right. Executive pay has in short gone mad. Its amoral and out of kilter with what is acceptable to most of us as a reasonable reward for what is no doubt a very difficult and exceptional challenge. When your comparator group is ethically bankrupt – your benchmarking activity becomes pointless. And this is one of the dangers with benchmarking in general – what you compare yourself with and the appropriateness of that comparison. Executive pay, bankers bonuses all are justified by saying that is where the market is and that is what everyone else is doing. But that doesn’t make it right. I hope the coop will hold their nerve and refuse his remuneration package and find someone who will take on this difficult challenge for less.

Which brings us back to leadership again. If Euan Sutherland is saying the group is ungovernable he is obviously not the right man for the job. He appears to be saying give up your voice and the role you, the members, play in upholding the ethics of this business and just let me decide for you. Now as I said I don’t know enough of the detail to know if that is the reality. The point though is that the Coop leadership needs to find a way to keep its membership structure, hold to its values, create a shared sense of what its ethics mean AND be a successful business. That is what leadership is really about. Not overly simple choices but building success that encompasses and celebrates what is special. It’s not complicated – its hard!