Magazine article New Zealand Management

Leadership: All Pay and No Promise

Magazine article New Zealand Management

Leadership: All Pay and No Promise

Article excerpt

Byline: Reg Birchfield

Is there a positive relationship between good leadership and massive executive remuneration rewards? No, no, no.

An increasing array of evidence -- behavioural, scientific and organisational performance based -- discounts the value of multimillion-dollar pay packages and perks to anyone except, of the course, the recipient.

The downsides of the race to embrace American's most destructive organisational export are, on the other hand, increasingly apparent. Even the International Monetary Fund has acknowledged the risks of rising social inequality. New Zealand, unfortunately, is buying into the argument that we must pay megabucks to buy the best leaders. Take a moment's dispassionate look and evidence of the truth of this claim is scant, to say the least.

Defenders of the high pay practice claim that in the scheme of things (in other words in relation to revenues), executive remuneration packages are insignificant. Tell that to the average family earning around $50,000 a year. If all other justifications falter, there is the simplistic and self-serving defence that criticising high pay packets simply reflects our pre-occupation with cutting down tall poppies. Nonsense, it is about fairness and what an individual, any individual, is worth.

Great leadership is not expensive or brim-filled with hubris. Great leadership has the wit to appreciate that it is greed, not need, nor merit nor hard graft that makes them worth so much. And it is perpetuated by a greedy support network.

What is a good leader? Let's start with a description by Alan Webber, a founding editor of Fast Company magazine. He recently told a class of college graduates in the US that they would soon move out into the world and be told they had "a responsibility to lead". They would, he said, hear that the world needs more leaders and that it suffers from a lack of leadership.

"Hogwash," said Webber. "Choosing to lead is one of the most rewarding decisions you may ever make. But it is not about you. Yes, you will bring your unique and much needed gifts to the world, but not for your own sake. Your job is to use your gift to help others express, make known and fulfil their potential -- influencing others with a purpose, a calling, and with opportunities they never imagined they had," he said.

Leadership, he continued, "is a mindset of service. It's a mindset of continual learning. …

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