Reputação no board #2
President of the Board of Directors of Iochpe-Maxion since 2014 and member of the boards of large companies such as Embraer, WE.G., Cosan and Marcopolo, Dan Ioschpe sees the speed and complexity of change in organizations as today's main challenge in building and preserving corporate reputation. Technological transformation, greater availability of financial resources and advances in people's qualifications mean that everything in companies' routines is accelerated. And reputation has everything to do with the day-to-day management of organizations, says the advisor in this exclusive interview with Reputation Feed.
The conversation with Dan is the second in a series that will be presented over the next few weeks with renowned advisors in the country. The intention is to show how these bodies, responsible for the main strategic decisions of companies, evaluate and address reputation management in organizations, as well as translating the impact of the construction and development of reputational culture from the perspective of the boards of directors.
Check out the main excerpts from this interview below:
“From a reputation point of view, one of the biggest challenges facing councils is the complexity given the speed at which everything happens”
One of the great challenges of boards of directors from a reputation point of view is that companies, given the speed at which everything happens, are increasingly complex, more sophisticated, and this impacts the work not only of the manager, but also , of the councils. Taking the United States as a basis, where there are more statistics available, it is clear that, due to these accelerated transformations, today's leading companies were created a few years ago and that there was, during the period, a large mortality of organizations. So, I wouldn't say that organizations and their boards weren't aware of this; In practice, the complexity has increased a lot.
I prefer to think about the whole, due to the horizontality of the subject of reputation
“More chips, more money, more people: development never imagined”
Perhaps the lifespan of organizations as we have become accustomed to seeing it will not be the same in the future. This does not mean that there will not be long-lasting companies, but there is another avenue of shorter and very upward cycles, which spread quickly. The dynamics are much more competitive due to speed and complexity, the result of technology, as technological leaps are accelerated; of money, which the generation of wealth makes available for projects; and people, because there was progress in education and personal development. So, with more chips, more money, more people, you can develop developments never before imagined, at a very large acceleration curve. And that is the challenge of managing companies.
“Reputation has to do with the routine conduct of business”
In practical experience, we can gain or lose reputation in any area of the business, of relationships, of the chains in which companies are involved. I always prefer to think of the whole as a counselor, due to the horizontal nature of the reputation issue. We tend to think about reputation, most of the time, more in relation to events, sometimes fortuitous. But you can anticipate it, as reputation also has to do with the day-to-day conduct of business, with business results. At the end of the day, everything will end up counting in this reputation combo.
“What the company is doing is what will appear on its watch. And what you’re not doing too”
The day-to-day life of the organization is doing. What the company is doing is what will be shown on its watch. And what it's not doing either. Not only by not doing it, by not going in the right direction, but also by omitting it. Nowadays, with the level of communication and knowledge of situations, omission is something extremely complicated and serious. Companies and entities cannot live with omission, which makes the web of reputation even more complex. You have to be proactive, bring the problem to light and resolve it.
“The board needs to participate in reputation development”
The role of a board in an organization's reputation is very broad. The board needs to participate in reputation development, along with management, with the rest of the company. It needs to develop structures that protect and maintain reputation, which, in my opinion, is absolutely horizontal. You're talking about the company as a whole. You need to integrate all the topics. You need to understand all the aspects that go into forming and maintaining a reputation, which is all of them, and work with them all the time.
“O bom em um conselho é escutar uma ponderação que difere do foco da sua”
You need a matrix within a council, just like a board or any organization. It is necessary to have a range of skills, and each person will bring some of them to the table, otherwise two advisors would be enough. This is why a more collegial vision is funded, which brings diverse information. The good thing about advice is precisely being able to look to the side and listen to a consideration that differs from your focus, because it came from another perspective, from another need that is as vital as yours for the sustainability of the business.
Should this turn into a Tower of Babel? No, otherwise it will turn into an assembly
“In a council group, it is necessary to navigate some territories that were not previously in demand”
In a council group, you need to have all the people, but you need to be able to navigate some territories that were not previously in demand. They can be technology, interpersonal relationships, gender issues. The greater the diversity obtained, the better. Now, this must mean a Tower of Babel? No. There needs to be an organization. You have to list all these issues and try, as far as possible, to cover them with this group, which cannot be made up of 60 advisors, otherwise it will become an assembly.
“ESG is an issue that permeates the entire business fabric and its entire ecosystem”
If the ESG issue starts somewhere in the company – in its carbon emissions matrix or in the diversity of its workforce – you will discover that it will not stop there. It will involve the marketing of your products, the image of your company, the type of attractiveness it will or will not have for employees, customers, suppliers, and so on. The condition is that you are pari passu with technology, and everything ends up getting involved. ESG permeates, like reputation, the entire business fabric and its entire ecosystem.
“The council needs to educate itself in areas that were not within its scope of activity”
It is important that board members understand the reality, relevance and scope of ESG. The board needs to educate itself, eventually, in areas that were not traditionally its areas of expertise. With a top-down vision, it will help and lead the board and the rest of the organizational body to seek (this understanding). And then, of course, it will monitor what is being done within the company and will be active, checking trends, updating itself, providing feedback on this at every moment.
Company sustainability is a key part of reputation
“If you are missing legs, look for alternatives to preserve sustainability”
The question of long term versus immediate results is historical and will always be raised. Now, when it comes to the sustainability of a company – which is also a key factor in reputation, because if the company is not sustainable, it ends –, you need to think this way. If you don't have the legs and lungs to do everything at a given moment in sustainability, you need to do it according to your own condition. If this leg size, if this air in the lung is too small and the steps to be taken are also not sustainable, it is necessary to go back within the board, possibly even with a group of shareholders, and check if there are alternatives so that sustainability be preserved. It's not necessarily about doing more short or long term. It is necessary to think about achieving the objectives, as this deployment, this launch of actions on a time map that is neither much smaller nor much greater than what sustainability demands.
“Organizations need to structure themselves against fraud and constantly update mechanisms”
Without going into specific cases of accounting fraud, I understand that companies have councils, shareholders, and that the fiscal council, the board of directors, committees, external entities, auditors, banks, creditors can also be involved – let alone the instruments and the checks and balances bodies are working, the more unlikely it is that there will be major surprises. It is necessary to do this and update these mechanisms constantly.
“Some face-to-face activity is essential for the dissemination of organizational culture”
How do we work with physical distancing and culture? Councils and management are focused on this. So, on the one hand, there is economy, enormous functionality in remote systems. On the other hand, there are stories in which cultural dissemination within the company lost out to virtual compared to in-person. The companies that are doing the best at this are working both ways. A little rule in the sense of saying: look, let's have flexibility, show the good side, but, unfortunately, those who are opposed to any type of face-to-face, may end up having to review their position in the organization. If we conclude that some in-person activity is essential for the dissemination of culture, and the dissemination of culture is fundamental for the sustainability and reputation of the company, what will you do? Are you going to say: are we going to live with this risk? It is difficult. People, in general, understand this, but it has to be done well.
“Emissions (of carbon) are a key topic in the very near future”
Emissions (of carbon) are a key topic in the near future. It's a super sophisticated topic, full of opportunities and threats that companies have to address. I'm not an expert in the area, but I read a lot about environmental issues and global warming. If I were to list just one, I would say that this is a very strong issue for the next three years, the next five years, until we reach a situation where we can look and say: wow, apparently, we are on a more controlled trajectory to avoid a big disaster.
More about Dan Ioschpe
An admirer of books, especially literature, and always attentive to what is published on sustainability and digital transformation, Dan Ioschpe has dedicated work in business institutions. He is a member of the Council of Sindipeças, the Brazilian Agency for Industrial Development (ABDI) and the Institute of Studies for Industrial Development (Iedi), of which he was president, as well as vice-president of Federation of Industries of the State of São Paulo (Fiesp). As president of Iochpe-Maxion, from 1998 onwards, he led the company's internationalization process, which today has around 17 thousand employees in more than thirty units around the world.
• Christianne Schmitt is editor of the Reputation Feed and Clovis Malta is a journalist
• In the next interview in the series Reputation on the board: Leila Loria, who contributes to the boards of companies such as Assaí, Pernambucanas and Moinhos Anaconda.