Hon. Eran Wickremaratne, MP, who was the Chief Guest at the Annual Meeting of the Membership of The Sri Lanka Institute of Directors (SLID) lauded the Institute for the yeoman service that had been done over the last 15 years in creating awareness of the regulatory framework and understanding of positive corporate behavior and values and making solid citizens of the Sri Lankan corporations as they contribute to the economic, social and moral development of this country. He requested SLID to continue to do the good work that the Institute has been doing!

In his speech sharing some thoughts on “Good Governance and Leadership,” he declared that good governance was not about mere technicalities, but was about building a culture and contributing to the whole culture of the country.

On a personal note he said that he had been a banker who went into parliament five years ago. Everyone at the time thought it was a very unwise move! It was only after he had got into parliament that he realized that he was the first Director/CEO of a public quoted company to come into the Sri Lankan parliament. He also realized that this was not a journey of his own, but was a journey for all professionals in this country, and was of the opinion that this would open doors to many more professionals to enter the Sri Lankan parliament.

“I thought, now that I was in politics that I should continue to have my associations with the many professional bodies and professional circles that I belonged to. But this was not to be, as I soon discovered that as soon as I became a Member of Parliament, I was termed a “politician” and was no longer welcome within the professional circles. My memberships lapsed, I was not invited to meetings and I was cold shouldered. I don’t say this with a sense of animosity, but with a sense of regret. I could understand why the people were doing this, as they had a sense of fear to keep company with a member of the opposition. This was the conventional thinking at the time. The message I got was ‘he cannot remain a professional as he is now a politician.’ I say this today to give you a better understanding, in the event you have to make the same journey. You are needed in politics!”

He continued, “I learnt another lesson – that we are all compromised at some time. Often we are compromised personally, and sometimes we are compromised because of our chosen vocation. If you look at credibility, different professions are rated at different levels of credibility amongst the professions. Pardon me for saying this, but the doctors credibility is one of the lowest! Businessmen are also ranked low, but politicians are ranked even lower! So I moved from being a businessman professional to a politician –personally taking a huge knock when I decided to go in to politics!

“Speaking of corporate governance, the concept has evolved over time. To define it is quite complicated. It depends on the culture, the legal systems and the historical development of each country by which corporate governance has got defined in those countries. The evolution has taken centuries. At the beginning corporate governance was the meeting point of economics and law. In those centuries, they talked about contracts and the protection of property rights and about collective action. But modern corporate governance is somewhat different. As it evolved, modern corporations led to the separation of ownership and control.

“There are two distinct theories in corporate governance. The first is the Agency theory where professional managers manage and are distinct from owners. They are actually agents for the shareholders or the owners. Then with time, another theory developed, the Stewardship theory where there are many stakeholders, not mere shareholders. Therefore we must be judged as professional managers, whether we are adding value to all stakeholders or just a shareholder, and we are judged not just on finance and economics, but on moral and legal rights and whether we are fulfilling those moral and legal rights.

“I know I am addressing an audience tonight who are from business and professionals who have sat in on very important seminars and who have probably been in the best business schools in the world. As such I do not want to pontificate further on what good corporate governance is about!

“I will now say a few words on leadership. There are many aspects of leadership of which I will only address one aspect of it. I would like you to take your mind back to think about the political leaders we have had in this country. I want you to think about their strengths and weaknesses. We now have a new President, Maithripala Sirisena – he is new, and we should leave him out of this discussion. Then we had Mahinda Rajapaksa – his strengths and weaknesses. We had Chandrika Kumaratunge – her strengths and weaknesses. We had Ranasinghe Premadasa – his strengths and weaknesses. We had J.R. Jayewardene – his strengths and weaknesses. I want you to just let that run in your own mind and come to your own conclusions.

“I would also like you to look at others internationally. We have Mahatma Gandhi – he never really held a position in his government or the state. He was a leader of the people. He changed his country. He had moral leadership. Martin Luther King campaigned against racial segregation. People followed him. He was also a student of the Mahatma. I believe that if there was no Martin Luther King, there would be no Barack Obama. Martin Luther King did not hold governmental positions, but he was a leader of the people. He held the high moral ground. More recently we had Nelson Mandela, 26 years in prison – a one term President. He comes out uniting the black and the white people of his country.

“Some months ago, I had the privilege of being in the South African Parliament and this is the story I learnt there. Once Nelson Mandela had left office and was in retirement, the South African Parliament decided to felicitate him, and they wanted to invite him back to parliament for the felicitation. Nelson Mandela refused to come back into parliament. He argued that there was a strict separation between the executive, the legislature and the judiciary. He had been the occupier of the highest office as the Executive President of South Africa. He had now vacated that position and he felt strongly about the separation of powers and felt that he should not even physically enter the building in which the South African Parliament met. The South African Parliament had to pass a special law just for one day, so that Nelson Mandela would feel comfortable to visit the South African Parliament. That is how highly he regarded the separation of powers. Nelson Mandela had moral leadership.

“Two of these people I just mentioned, the Mahatma and Martin Luther King, both lost their lives. Nelson Mandela was 26 years in prison. Only one held a state position, but all three of them had moral leadership. They had credibility which moved millions of people to change. I am really talking today about credibility – one aspect of leadership that I want to emphasize. It is not just the message, but it is about the messenger. One defining characteristic of leaders who are effective over a very long period is credibility. They behave in ways that cause people to see them as ‘credible.’ They are believed. They are trusted. You don’t always agree with them, but you believe them. You trust them. They are consistent with words and behavior. They are honest to the degree that is reasonably possible to be so.

“I know that might surprise some of you that I sounded so compromising. Yes, it may be compromising, but they are honest to the degree that is reasonably possible to do so. Leaders cannot reveal everything they know to followers. Managers share the truth, but they may not always be sharing the whole truth. Credibility is built through personal contact. Credibility above all is a relationship, and therefore if it is a relationship, it is contact based. You cannot build credibility just by email. So what do people look for in leaders? They are looking for honest, competent, inspiring people. People who have shared values and instill hope in others.

“Do we have credibility? Do we lose credibility? Yes, all of us can lose credibility. Can we regain our lost credibility? Yes, we can also regain our lost credibility. Despite the best of intention, the pursuit of flawless leadership, things always don’t go as planned, expected or promised. Circumstances change. Sometimes we do not have the resources to fulfill our promises. Sometimes we discover that we don’t even have the competency to deliver. We make errors. We chose wrong strategy or we just mess up! No human being is exempt from failure. Therefore, you lose credibility. Do we lose credibility? Yes we do. Can we regain it? Yes we can. How can we regain it? Through leadership accountability.

“If we accept that we have done something wrong, we admit it, we apologize, we make amends and we act upon it. People don’t expect us to resign for an honest error or lapse. But they expect us to share in the hardship that followed our poor decision or wrong decision. That is leadership accountability. You could be creative, you could be competent, but your leadership lacks unless you have credibility. Business can certainly show the way so that politicians like me will follow. That is your challenge!”

The Island – July 4th 2015