Sir Mark Moody-Stuart and Responsible Leadership
Sir Mark Moody-Stuart, chairman of Hermes Equity Ownership Services and former chairman of Royal Dutch Shell, discussed the topic with Tepper School of Business students as part of the W.L. Mellon Speaker Series.
Sir Mark Moody-Stuart believes in responsible leadership. It’s the title of his recent memoir. On April 7, as part of the W.L. Mellon Speaker Series, Tepper School of Business students were treated to a discussion on the topic with Moody-Stuart himself.
Moody-Stuart opened the hour with his intent to explore the role of business and impact of the resources industry in relation to developing countries, encouraging the group to ask questions. He referred to both positive and negative situations, and key factors involved.
“It may seem strange for a businessman, but one of my conclusions is that a key ingredient is actually government leadership,” he remarked. “You don’t know how much you need government until you’ve been in a country in which it doesn’t exist.”
As examples, he cited Oman and Malaysia as favorable situations, while Nigeria, in enduring years of “military rule with a government who probably governed more in relation to their own benefit than the interests of the country,” was not.
Moody-Stuart then enumerated the options and responsibilities for companies operating in such difficult situations, noting that withdrawal “doesn’t necessarily improve the situation.” He emphasized that having responsible companies engaged can be beneficial, and additionally expressed his aversion to both military action and economic sanctions.
“In my Shell days,” he explained, “every time we were prevented by sanctions from doing something, the technocrats lost power and the bad guys gained power.”
Moody-Stuart specifically stressed the use of alliances between business and civil societies to both solve problems and establish appropriate rules of behavior. He particularly highlighted the United Nations Global Compact, which “challenges business to embed, day-to-day, principles of the U.N.” He pointed out that the Compact, of which he is board vice-chairman, now numbers more than 8,000 companies, half of which operate in developing countries.
“I believe this is the way forward for business,” he maintained. “I have a strong belief that in countries where far from everything is perfect, the operation of responsible businesses can be beneficial by improving conditions and demonstrating that these things are not going to cost the earth and are actually beneficial in the long run.”
In addressing the challenges of working with controversial leaders, Moody-Stuart advised that while not condoning detrimental behavior, to “at least talk with the person and establish some kind of human contact.” He added, “I think without that we will never make progress.”
Moody-Stuart underscored the significance of insuring that a large workforce operates in line with larger corporate principles and the challenge of bringing everyone into the process. “A good crisis frankly helps,” he said, referencing difficulties Shell experienced in 1995. “It really shocked us. It was an ideal moment to ask, actually, what are the values.” He described the company’s workshops across the world, redefining existing principles and the work to embed them. He happily relayed the story of hearing years later that an unsafe facility had been “shut down by a cook” who had felt empowered to speak up.
Moody-Stuart shared two pieces of final advice with the students. First, he counseled, “Listen to people outside, in society, including those with whom you don’t agree. Openness can be extremely important.”
Second, he reminded them, “It is extremely important as a business person to take off your corporate hat, put on your societal hat and join with others in working with governments to establish the proper sort of regulatory frameworks which are absolutely essential.”
To rousing applause from all Moody-Stuart concluded, “Thank you all again for taking the time. Good luck in your careers, wherever they may be.”
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2014-2015 W.L. Mellon Speaker Series