Once again, the scandal of ‘Fat Cat’ pay has hit the papers. On both sides of the pond, the excessive levels of remuneration for CEOs and captains of industry has caused great upset and offence both within and without the stakeholder communities of numerous organisations.

The response has been predictable whatever approach is taken to the issue. Amongst shareholders and employers there is anger toward individuals whose pay award can be up to and exceeding 500 times the average within the organisation. To add insult to injury, the performance response to these incentives has often been the oversight of huge losses and redundancies within the same organisations.

The resulting sense of injustice burns very strongly - so much so that in some of the AGMs shareholders have flirted with open revolt voting down the recommended increases and bonus packages being. This has produced, in the ‘offending individuals’, little more than slight embarrassment and the smug rationale that such perks are the ‘industry standard’.

In stepping back to reflect upon this situation, we need to ponder the root cause. One of the most obvious catalysts could just be plain old greed. Freud argued that man was born greedy and that as people progress through 3 psycho-sexual stages of oral, anal and phallic development* so too their greed develops.

Another possibility is that the greed is rooted in insecurity linked with rapid CEO churn. With an average tenure of about 3 years, the individuals involved may feel that their only option is to try and make their money in this one-shot, one-off opportunity. Whatever the reasons, we might hope that the different regulatory authorities or company boards might do something to begin to change this culture.

However, I would like to suggest that another possible cause, and one I feel should give us even greater concern, is that of ‘Leadership Amnesia’. By this I mean that these executives in question may have ‘forgotten’ the reason as to why they were where they were in the first place. They ‘forgot’ that their primary role as a leader is that of servant to the organisation and its numerous stakeholders.

The concept of servant leadership was first articulated in the corporate sphere by Robert Greenleaf, who demonstrated clearly in his writings the power of servant leadership to create high performing organisations. His main idea is that the leadership function was primarily a servant role. Senior leadership was not there to be served, but rather to serve in creating success and value for all who work within an organisation and as a result are served by the product of the organisation. This, he felt, not only provided for a much healthier and enriching work experience, but also began to model the kind of society that people really would want to live in.

By servant, Greenleaf did not mean some doormat that others could easily walk over, but rather it was about a mindset of senior leadership who saw themselves in their role as a steward of the opportunity afforded them in such a role to serve others** and not to benefit selfishly from prestige and privilege. Such leaders create a legacy worthy of emulation and the kind of leadership that others would be inspired to voluntarily follow.

It is very easy for all of us to wag our fingers and frown with disapproval at these corporate excesses. If we are honest, we know inside that part of the emotion within us is jealousy and it is a healthy thing to consider what our personal response would be were we to have a similar opportunity. To whatever extent greed and insecurity are behind this excess, I want to suggest that ‘Forgetful Fat Cats’ are much more dangerous because of the danger they do to the concept of leadership.

In reporting on the current abuse, the Financial Times described it as a lesson in cynicism. Obviously, much of the damage is already done. Rather than sitting in judgement upon these individuals, our time is better spent in looking inward, reflecting upon our own motives, actions and leadership and discerning the extent to which we view ourselves as servant leaders. If enough of us within the corporate world were to do this - maybe things could begin to change. As Emerson said, “When I consider the changes that have been achieved by little things, I come to realise there really are no little things”.

Making different choices daily that are driven by service rather than self-servitude will not only change the culture and climate within which we and those we lead work, but also make possible the existence of a culture which gives permission to this level of excess a thing of history.

* See ‘I Was Greedy Too’ by Diane L Coutu – Harvard Business Review February 2003.

** ‘The Power of Servant Leadership’ by Robert Greenleaf, published by Berrett Koeler.

Phil Wall
CEO