Osvaldo Schirmer: reputation is built with all stakeholders

Own and protected culture guarantees credibility for companies, says advisor who ends special series

Clovis Malta

Reputation on board#4 (Final)

With the experience of someone who has served on boards of directors for decades, both in commerce and industry, Osvaldo Burgos Schirmer has a very personal definition of what he understands as corporate reputation. Reputation is respect and preservation of the culture of organizations, he says.

Reputation is built through dealing with suppliers, customers, the workforce, the community – with all stakeholders, adds Schirmer. He is a member of the boards of directors of organizations such as Renner, SLC and Yduqs (former Estácio), in addition to being an advisory advisor for Oleoplan, FCC, Goal and the Logemann family holding.

Below is a summary of the conversation that closes the series Reputation on the board, published over the last few weeks with some of the most influential business advisors from the country.

“What matters when assembling a council is choosing people who can contribute with different and complementary visions”, says Schirmer – Photos: Júlio Cordeiro/Especial RF

“Preserved own culture generates trust”

What I consider most relevant in terms of reputation as a business driver is respect and preservation of the organizations' culture. A company that has its own culture and protects it, preserving it, has all the conditions to generate trust.

“People are worried about ESG, thinking it is a passport to heaven”

Reputation is built far beyond ESG, as it has to do with dealing with suppliers, customers, labor, the community that surrounds companies or their points of excellence. People are very concerned about the issue of ESG, thinking that this is a ticket to heaven. There are a lot of people running like crazy to fit into the rules. Many people think that if they are nice to the environment, they are buying a reprieve.

“Relationships with suppliers are a challenge in relation to reputation”

One of the main challenges for boards of directors in addressing issues associated with reputation within companies is the relationship with suppliers and customers. It is necessary to be obsessive when it comes to suppliers in relation to aspects such as slavery-like labor, for example. It is necessary to know whether suppliers use something that is harmful to nature, whether the final products are taken care of properly, as all of this affects the companies' reputation.

With my experience in the financial area, I understand that, no matter how much reputation someone or a company has, it should always be examined as if it didn't.

“You must always be suspicious, check, check, check”

Many people in the market give credit based on names, not numbers. It is necessary to always be suspicious, check, check, check. With my experience in the financial area, I understand that, no matter how much reputation someone or a company has, it should always be examined as if it didn't. In the case of suppliers, attention has to be even greater. In Brazil, we can still see it. Abroad, we have to use third parties to inspect a small producer in the interior of China, for example. Now, when it comes to fraud, there is no vaccine. Fraud changes its appearance, changes its size, changes its origins, its mechanisms, and humanity has been doing this for centuries. It is true that control instruments are also improving, but the human imagination is always very creative. Whoever gives credit has to check the most basic things, look at the balance sheet, have confidence in the audit company if it actually carries out diligent evaluation and checking. You have to check, check, cross-reference information, see references, and not simply base yourself on the name of the company.

“The best ideas emerge from discussions between people with different backgrounds”

A good board of directors is not one that has a bunch of ex-financiers, or ex-engineers or ex-whatever. The good thing is when there is a combination of talents, because the best ideas emerge from discussing ideas with different backgrounds. What matters when putting together a council is choosing people who can contribute different and complementary views. Historically, the councils were made up of mature men, around 50 and up, who already had experience. The world has changed so quickly that sometimes you look for talent in their early thirties to provide the board with angles of possibilities for growth, innovation, disruption. In my opinion, it is their combination that makes excellence.

“We shouldn’t let ourselves be carried away by extremely poetic flags”

Diversity is a beautiful banner, but more poetic than effective, in my opinion, to the point that there are several movements in the world, to which I am particularly opposed, demanding quotas – quotas for women, quotas for black people, quotas for genders. People are worth what they can contribute, whether they are white, black, women, whatever. Sexual preference, for example, should not prevent anyone from sitting on a board. Everyone is worth who they are, not their preferences. We shouldn't let ourselves be carried away by extremely poetic flags.

“In a decision by consensus, the responsibility lies with everyone”

When everyone manages to convince everyone else, it's much better than when something is approved by seven to three, five to two, depending on the size of the council. Those who voted against what was ultimately decided by the majority will have written it down in their notebook: such a day, at the council meeting, I said this, this, this. See? I was right. In a decision by consensus, in which everyone is convinced, the decision becomes everyone's and everyone's responsibility. There is no room for someone to say: see?, I said.

I can't face life, nor suppliers, nor bankers, with a fragile balance sheet. I have to have at least this solid foundation to face the days ahead

“You can’t leave issues involving people and the company’s financial health until later”

What cannot be left for later in a company are issues involving people, the evaluation of a CEO, a COO. If the decision is made simply in the heat of a meeting, it may be foolhardy. It has to be worked on. Another thing that cannot be left for later: the company’s financial health. I can't face life, neither suppliers nor bankers, with a fragile balance sheet. I have to have at least this solid foundation to face the days ahead. Sometimes it doesn't work, and then there's no conversation. It didn't, it didn't. Therefore, there are judicial and other recoveries.

“In companies with dispersed capital, the board is the one who cares about the long term”

In general, as I have been in many organizations, when you have companies with dispersed capital – that is, that have no owner or controller –, the board, in the end, is the last resort, and who cares about the long term . In companies with defined control, concern about the long term is in the controller's mind. In the companies where I work and with which I interact, I see an affinity between what the C-Level and the board of directors seek. But I can't say that this is a general rule for all C-Levels in all publicly traded companies.

More about Osvaldo Schirmer

Before starting to work as a management advisor for large companies, Osvaldo Schirmer had a successful career as a financial executive at the Gerdau Group, where he worked for almost 30 years, and at Iochpe-Maxion, where he worked for 11. In fact, the businessman Jorge Gerdau Johannpeter, former CEO and chairman of the Board of Directors of the steel group, he is named as one of the leaders he has as a reference. Alongside him, Schirmer also highlights Antônio Ermírio de Moraes, businessman, who died in 2014, who commanded the Votorantim Group for almost three decades. And, to understand boards of directors from a less operational approach, recommend books by the renowned management thinker Ram Charan.

Clovis Malta is a journalist

The Reputation on the board series aims to present the view of management advisors on the importance of reputational culture in organizations and heard four of the most influential board members in the country to analyze the topic. To check out each of the interviews, click:

. Reputation on bord#1 José Monforte
. Reputation on bord#2 – Dan Ioschpe
. Reputation on bord#3 – Leila Loria


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