When does strong leadership become dictatorship? May 2009 sees the celebration of Margaret Thatcher entering Downing Street 30 years ago, but like many corporate careers, her style of management fell out of favour after too many years in office.
Lady Thatcher could be confrontational as prime minister. Her re-assertion of government’s right to govern paved the way to changes that the country arguably benefits from still today.
But her confrontational style extended to her Conservative cabinet colleagues too. Those men not prepared to say yes to her plans were likely to be ousted. It is not a model for running a boardroom.
There are many examples of domineering business chiefs who have defied corporate governance principles — Robert Maxwell, Tiny Rowland and more recently Sir Fred Goodwin — and suffered as a result.
And while they should have been kept in check by shareholders, just as voters can ultimately decide the fate of politicians, investors were prepared to ignore the flaws while they thought strong leadership was producing results.
Thatcher was resolute in a political world where U-turns are common as soon as it becomes difficult to pursue objectives. She undoubtedly delivered.
She pushed through a reduction in the role of the state through privatisations. How many chairman have demerged their groups without pressure from investors? And she remained popular with her customers - the voters who put her into Downing Street three times.
In the end she was ousted not by the electorate or beaten by the opposition but ejected by her own fellow ministers. Rightly or wrongly, those colleagues assumed a role in reforming their own organisation that few directors dare do in companies. The Royal Bank of Scotland board, for example, made no attempt to remove Sir Fred even when the institution was crumbling.
The lesson for both the boardroom and the cabinet room is that strong leadership can produce significant change that less bold executives would not tackle. However checks and balances cannot be forfeited and should not be overridden by the domineering leader.
(Pic Steve Punter cc 2.0)
