DYNAMIC GOVERNANCE Public Institutions & SME

Alain Deniau & Alexa Bailey October 2014

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With over 50 locations and more than 1,400 employees

around the world, we have the resources and contacts

necessary to conduct a global, multinational, national, or

local market search.

Heidrick & Struggles

► We are keen to add value to world class businesses

► We are an international, premier provider of

leadership advisory services, including executive

search, talent management, board composition,

executive on-boarding and M&A effectiveness

► 60 years of industry experience and brand equity,

with a Global team of over 350 consultants working

from more than 50 locations in principal cities of the

world and emerging markets

► Our clients include FTSE 350, Fortune 1000 and other

marquee global organizations. We successfully

completed over 550 CEO and Board engagements in

2013

Heidrick & Struggles Overview Heidrick & Struggles Office Locations

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We Partner across the Talent Cycle – Leadership Advisory

Business Strategy

Identifying, Recruiting

and Hiring

Succession Planning

Promotion and

Rotation

Engaging and Retaining Continuous Learning

and Development

Onboarding and

Integration

Leadership Consulting

Leadership Search

Talent Strategy

Talent Cycle

Leadership Consulting

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How we foster and help to lead Board debate and development

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The Next Horizon for High Performing Companies

The European Corporate Governance Report 2014 sets out a new charter for the boardroom based on: - Detailed analysis of 400 of Europe’s largest listed companies conducted biennially since 1999 - A board effectiveness survey completed by 236 European board members - Heidrick’s 60-year track record of working with high performing boards The research identifies six key characteristics that define a new spirit of agile and responsive governance rooted in board leadership: 1) Deep Business Knowledge 2) Diversity of Thought 3) Engaged Leadership 4) Strategic Alignment & Execution 5) Capacity to Adapt 6) Leadership Talent When combined these lead to Dynamic Governance

“The best companies do not wait to

be governed, they shape the debate

and set best practice with agile and

responsive leadership that adapts

quickly to the changing circumstances

of business.”

Can Public Administrations

use our findings to increase

their efficiency?

DEEP BUSINESS KNOWLEDGE Curiosity is a prerequisite – inspect don’t expect

Any debate is only as good as the quality of the information and knowledge at work.

Chairmen and boards must possess deep insights into the business.

DIVERSITY OF THOUGHT Diversity must be rooted in meritocracy and the attainment of

business goals. The needs of the business drive diversity.

“The selection of the right people for the

board is increasingly critical. Diversity of

thought is the key.”

ENGAGED LEADERSHIP The modern chairman requires an “all-court game”

The job of the chairman is to manage the balance of

skills, knowledge and experience on the board, and

to constructively challenge management and the

non-executive directors to drive outstanding

performance.

“If the CEO is the heart of the

company pumping vibrancy

through its very core, the

chairman is the soul of the

corporation, its conscience, its

moral keeper.”

STRATEGIC ALIGNMENT & EXECUTION Organizational nirvana occurs when everyone knows where they are

going, the strategy for getting there and then makes that happen.

The theory is alluringly easy; practice, devilishly difficult.

“In the short, they (board

members) cannot be uncritical

lovers but have to be loving critics

to the institutions which they are

paid to serve.”

CAPACITY TO ADAPT World class boards try

to anticipate the next

development – to future

proof the company

One of the greatest challenges facing

corporate governance is that it is seen

and often interpreted and implemented

inflexibly. This is out of kilter with

organisational reality. In the face of

continuous change and relentless

competition the capacity to adapt is a

key competency. Organisations - and

boards - must be able and willing to

change direction if and when required.

Governance, at its best, is forward

looking but fully aware of the lessons of

past performance.

LEADERSHIP TALENT People execute strategy

Identifying and developing leadership talent and planning succession issues among a

company’s leaders is often on the to-do list of boards. There it can remain.

“In the long run, the systematic

development of stars is the most

effective strategy to create a sustainable

competitive advantage.”

DYNAMIC GOVERNANCE Public Administration and SME

Good Governance can help the public administration to make SMEs grow

through good legislation

Legislation may inhibit innovation

Compliance may not help business to develop

In the SME context, Capacity to adapt – Deep business knowledge –

Diversity of thought are key factors for the Public Administration

DYNAMIC GOVERNANCE Applied to SME

Governance is the same for all entities and does not depend upon the

size of the revenues or upon the fact that it is listed or not or family

owned

The difference is in the way governance is implemented

The specific case of Family Businesses

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The family business dilemma in CEO succession

In all family business around the world,

whatever the country or the culture, a

major concern and critical challenge is

CEO succession. Most family

businesses, whatever their size, have

grown thanks to the exceptional

contribution of an emblematic founder.

This historical figure puts a constant

pressure on any one that follows in the

leader (CEO) role, especially as they

will have to accept, sometime

unfavorable, comparisons.

The four dimensions of a CEO role

CALL TO ACTION Actions that should generate high-quality Public Administration

which would lead to business competitiveness and economic

growth

Define what is “good governance” for the Public Administration

How can the Public administration embrace all of our 6 key characteristic from the report?

What organisational innovation is required to ensure good governance?

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