What is corporate governance?

Corporate Governance is more than just restoring or maintaining (public) confidence in a company; it’s about organizations making better decisions.

A few months ago I was in touch with a former colleague who I greatly admire – not only for his excellent management skills but also for the person that he is – kind, generous, honest and down to earth. We were talking about my consulting business and he asked me: “what is corporate governance”?

I realized that while many people (including very smart and skilled managers) might know that corporate governance relates to managing a corporation, they might not know exactly what it means. And it got me thinking that if more people know about corporate governance it might influence a shift towards creating more responsible and relevant organizations – especially those companies that we interact with as investors, employees, consumers, partners, etc.

Corporate governance to me, as a consultant, means helping boards (board of directors) make better decisions. It is a framework and a practice (within that framework) that ensures that corporate decisions benefit all stakeholders.

It is said that the introduction of the Sarbanes-Oxley Act in the US in 2002 ushered in a (renewed) interest in corporate governance because it was seen as a way to restore confidence in a “system”.

There is no doubt that corporate governance is a balancing act; organizations are good corporate citizens when they are not just concerned with profit but also short, medium and long term effects of their actions on the environment, community and their investors (including employees, suppliers, government etc.) It’s as much about PR as it is about internal controls, disclosure and performance management and compensation. For example, executive pay and benefits is a corporate governance issue if bonuses are tied to making short term decisions that could harm the organization. Such issues are kept in check by having an oversight committee or board of directors that examines executive actions, pay and risk.

So what does corporate governance mean to you? To me it means making sure that different voices are heard and that key decisions are not biased towards just making money or keeping a special interest group quiet. Corporate governance means that key decisions are made by taking into consideration different stakeholders in order to support the well-being of the entire organization.

Savvy Saturday July 27th, 2013

“I do not think there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature.”
-John D. Rockefeller

And here is a great TED talk on “grit”….perseverance and strength to follow one’s goals and to achieve them through hard work, patience and taking advantage of opportunity. Happy Saturday!

5 Trends Impacting Growth in Latin America

While doing research for a project I’m currently working on, I discovered a list of mega trends from Frost & Sullivan (report for purchase on their website). These are trends that underscore Latin American growth prospects in the next 10 to 15 years.

Below is my list of five trends. Each item on the list has been studied and researched by Hipona Consulting in order to understand their impact on growth and business in Latin America. Some may change and some may fade (10 years is a long time!) but organizations that take these trends into consideration will be better able to adapt and take advantage of opportunities in Latin American markets.

1) Increased participation by women in decision making (at corporate level, in politics, buying decisions) (see my AmericaEconomia article in Spanish or my blog post on corporate governance)

2) Urbanization

3) Rising middle class

4) Increased connectivity (private and public sector spending)

5) Investment in infrastructure (traditional: airports and roads as well as innovative: industrial parks/clusters)

What trends do you see in the next ten years?

Quito wins the travel “oscar”

Quito was just named South America’s Leading Destination 2013 by the World Travel Awards. These awards are like the Oscars of the travel industry and so it’s quite an honor to living in – and promoting doing business in – Quito, Ecuador.

Quito is the recipient of quite a few awards such as Lonely Planet’s top 10 destinations, a National Geographic Traveler “must see” and The New York Times “1 000 places to see before you die”.

Congratulations to Quito!

Savvy Saturday July 20, 2013

“We find comfort among those who agree with us – growth among those who don’t.”

– Frank Howard Clark, American Screenwriter

Good News Stories

Bad news travels faster than good news.
While this seems to be a global truism it is only when living in Latin America that I repeatedly heard this expression.
And it’s unfortunate.
Bad news sells – but I think – and hope – that good news has an equal if not higher probability to “sell” if we give it the opportunity. If we share the stories that inspire rather than just the ones that criticize, I think we could be on to something powerful both for business and for society.
But it takes effort and courage. I recently came across a good news story about one of my companies (link here) but I only saw it a month after it was released.
Being proactive and positive in our communications is a two way street and I think we have just as much a duty to demand good news (and seek it out) as we have in creating it ourselves.
Here’s a great quote from Anne Frank:

Everyone has inside of him a piece of good news. The good news is that you don’t know how great you can be! How much you can love! What you can accomplish! And what your potential is!

Savvy Saturday July 13, 2013

The search for truth is in one way hard and in another way easy, for it is evident that no one can master it fully or miss it wholly. But each adds a little to our knowledge of nature, and from all the facts assembled there arises a certain grandeur.

— Aristotle

The Quinoa Grain as a Super Business Connector

Those who live in Ecuador, Peru and Bolivia know about quinoa. They know about it because they likely had to eat (willingly or unwillingly) quinoa soup or quinoa cakes at some point in their lives. The point is that quinoa – which South Americans see as nutritious and perhaps a little boring – is now making it in the mainstream food market in the US, Canada and EU.

It’s tasty, nutritious and gluten free. It’s fun to cook with. It’s great for your metabolisn. It’s organic.

With an increase in demand the alternative grain is becoming not-so-alternative anymore. 2013 has even been declared “Year of the Quinoa” by the United Nations. And recently the film idea “The Mother Grain” reached its funding goal on Kickstarter.

But what does quinoa have to do with business? More specifically, why does the title to my blog post describe quinoa as connecting business?

Innovation is about making unexpected connections between things. While quinoa may just be a grain it has enormous potential to solve some of the nutritional challenges we will be facing in the foreseeable future. It connects businesses because it is grown by community farmers but, very quickly, reaches a global community of people who love it and value it for its nutritional properties. It sits on high end retailer shelves but also fills the soup bowls of many South Americans.

Quinoa is an ancient alternative “mother grain” in the Andean region (mother in the sense that it is a nourishing grain that bestows great benefits to its users). It connects food, nutrition and metabolism. It also connects communities, families and businesses from Latin America to the world.

“It’s a small world”

Have you ever said the words: “it’s a small world”? If you are anything like me you probably have said or thought this a few times.

The seemingly curious connections or “ah-hah moments” that we experience in both personal and professional lives are links between the past and present and between the professional and personal (and some would say material and spiritual) aspects of our lives. It’s a way to make the unfamiliar (and sometimes scary) areas of our lives less so; of learning lessons from the past to enrich our future. The same thing can be said about organizations and organizational learning; that connections between different functional areas or geographic markets (Latin America and Europe for example) can lead to the innovations that characterize successful companies.

I ran into someone who I had not seen in about three years. Seeing them again brought back some of the same concerns or issues that were so present in my life three years ago. But spending some time reflecting on the experience, I realized that I had overcome many of those work issues and that I was now a different and more mature professional; I had learned from the past and was ready to tackle the future.

People come in and out of our lives for different reason and only you as an individual can make sense or draw conclusions from those interactions. What I would encourage you to do is to try to spend a few minutes thinking about connections and drawing from experiences in work and professional life to go out and do something innovative.

Savvy Saturday July 6, 2013

“The job is what you do when you are told what to do. The job is showing up at the factory, following instructions, meeting spec, and being managed.

Someone can always do your job a little better or faster or cheaper than you can.

The job might be difficult, it might require skill, but it’s a job.

Your art is what you do when no one can tell you exactly how to do it. Your art is the act of taking personal responsibility, challenging the status quo, and changing people.

I call the process of doing your art ‘the work.’ It’s possible to have a job and do the work, too. In fact, that’s how you become a linchpin.

The job is not the work.”

― Seth Godin, Linchpin: Are You Indispensable?