Good leadership and corporate governance according to Maria Ramos

Governance and good management are “absolutely fundamental for doing business successfully today” – but good governance too often is more about paperwork than practice.

This is according to Maria Ramos, group chief executive officer of Absa, and guest speaker at the University of Cape Town Graduate School of Business’s Distinguished Speakers Programme sponsored by Deloitte and Webber Wentzel late last year.

Ramos, who spoke on the topic, “Governance – A Practical Perspective”, had a strong, clear message to impart: governance is about leadership, sustainability and corporate citizenship. Good governance is a licence to do business and should be an entrenched philosophy and practice within organisations.

“If good governance practices are entrenched within the organisation, you don’t notice it as it benefits the business; but if it is not entrenched throughout the entire organisation, you have to question everything, and decision-making becomes very difficult,” she said.

Ramos added that in her career, she has learnt that one thing that gets in the way of good governance is ego. “And so, in answering to that, I’ve always said that there are no standards for ego – so when making decisions, ego should be impaired to zero.

“What you do in any organisation depends on the team you have to work with. If you forget that, you have nothing,” she said.

Ramos reflected on her time at the Treasury as an example of what drives governance. “When I was head of the Treasury, I felt a complete sense of accountability to the public. That accountability, that responsibility, is what governance is about,” she noted.

According to Ramos, the modern philosophy for governance contains these very important things: self-regulation, risk management, adequate control, input from others, substance over form, escalating issues, and reporting outcomes.

“The important thing here is what we do in leadership positions but, also, how we do it,” she said. “Governance always starts at the top: the way you do it, how you implement it, how you feel it, binds you – and how you engage with regulations.”

Ramos pointed out that the reality is that regulations, when applied, often do not work entirely. There are distortions within the organisation.

“Sometimes it’s about a simple flow of information rather than merely complying and filling in the right forms.

“Asking the right questions, constantly.

“Always going back to past assumptions and readdressing them. Are these still the risks? Are these still the issues?” she explained, emphasising the importance of input by others.

“It is very important to create environments where input from others is actually valued. Other stuff doesn’t matter. If there is no feedback loop within the organisation, then control breaks down.

“Today, organisations mostly focus on reporting, but it is the build-up to the reporting that is so very important. (This build-up) needs to be embedded,” Ramos added.

She pointed out step-for-step the build-up process. Firstly: identify issues. Secondly: decision-making, where it is important to empower more people to make decisions.

Thirdly: reporting.

In terms of reporting to the public, “You need to be able to sit down and make it real for people. If we can explain what we are doing to someone who has never had to work with these processes, that they understand it fully, then we are on the mark,” she said.

“That’s why sincere interaction with clients, building relationships with them, helping them truly understand what we do and how we do it, is so fundamentally important.”

Ramos believed that business is about sustainability and that there are two main aspects of governance becoming most important: integrated reporting and ethical leadership.

“The biggest challenge is changing the behaviour of people within the organisation,” she said, stating the importance of tangible proof that behaviour has changed for the good.

“If a client walks in today and wants proof of how the organisation is moving to more sustainable processes, you have to be able to show them. If you can’t show how you’ve changed behaviour, you can’t put it on paper. If you say you’re using less energy, you need to be able to show it.”

Ramos said that Absa is very focused on sustainability and is moving into a new building with large gas turbines as the energy source. It is the first commercial building of its kind in South Africa, she believed.

She added that Absa would be going through significant regulatory reform, as there is a need within the global economy.

“You have to change your behaviour. It doesn’t matter what the board charter says. It doesn’t matter what you say your values are. Values without behaviour mean nothing,” Ramos proclaimed.

“Governance is not just a corporate issue. A failure in governance has significant effects. Good governance is a licence to do business.

“We need to lead with well-run, well-organised, well-managed organisations where values are embedded in the leadership and practices of the organisation,” she said.

Gareth Coetzee