Alejandra Aranda, President of Humanitas/Cornerstone International Group in Santiago, Chile was interviewed recently by the business newspaper La Tercera on the most needed leadership characteristics in demand today. Following is the full interview.
“Companies are facing a critical moment today”, says Alejandra Aranda, President of Humanitas / Cornerstone International Group, who is In the process of searching for the Pension Fund Administrators’ candidates for companies’ boards.
Companies are experiencing a scenario of forced transformation. The pandemic forced habits to change and processes that were expected to be more gradual, such as digitization on online sales, amongst others, were accelerated. But this picture that began in 2020 had already been occurring in previous years and particularly in Chile the weight of social legitimacy in the business world had been gaining ground, which was accelerated due to the social outbreak (of October 2019).
It is in this scenario that the search for corporate governance members has also been adapted to find the profiles that the current environment demands. Alejandra Aranda, President of Humanitas / Cornerstone International Group, gives an account of this phenomenon. She is fine-tuning the details to complete the process -for the second period- of searching for the independent directors that the Pension Fund Administrators will place in the companies in this season of shareholders’ meetings: Enel Américas, Enel Chile, Parque Arauco, Empresas Copec and Colbún.
The profiles in some way reflect this general trend, although they also obey to the reality of each company.
‘There are global contexts that have affected us such as the pandemic and the social outbreak. This has affected society, changing all consumer habits and the way you should develop business due to more uncertainty. This requires a lot of short-term planning, because you face various scenarios not only the optimistic, neutral and pessimistic one. Today there is much more disruption, and that means generating different types of talent in all layers of the organization, starting with the Board of Directors and its President”, she says at the beginning of this conversation. Alejandra is also a member of the Executive Council of the Public Business System (SEP), which has 20 state firms under its wing.
Aranda says that the main mandate of the Pension Fund Administrators was precisely to find these ‘new’ skills and to include this greater diversity. “The Pension Fund Administrators don’t want the same faces,” she says. “They had already been searching for this a few years ago, but this time it was demanded in a stronger way”.
Diversity, women and regions
Alejandra Aranda knows that Chile has made progress in corporate governance, but she also recognizes that there is still a lot to be done. ‘There is a lack of diversity in the Board of Directors, beyond the presence of women. There also has to be people from different regions, and of different age groups”, she comments. For this reason, she celebrates that one of the mandates of the Pension Fund Administrators has been precisely that, diversity: “They do not want the same names, they want diversity without subsidy. It would be irresponsible to put someone on a subsidy (for filling a quota) when you are a minority. Also, there are women who are really capable, it is not necessary.”
Another striking aspect in this process was the search for people from the different regions in Chile. “There is a purpose in bringing directors from other regions. Directors with a regional sense, where it is working.”
Aranda comments that her experience in state companies, both with the incorporation of female directors (representing a total of 49%) and the search for people from different regions has been very favorable.
The Headhunter explains that the characteristics that the Pension Fund Administrators require for the candidates for the role of Director also fit in with those that are generally sought for. And here the key concept is resilience. “For organizations, the new skills are linked to having a generation of talents that form a resilient organization. To face all these challenges and disruptions, I have to start generating leadership capacities in the different layers with certain characteristics such as empathy, directing and control of the relationship between the Board of Directors and the company’s management,” she explains.
According to the Pension Fund Administrator’s Headhunter, companies are at a critical moment: “We are facing a whirlwind of business transformation and business sustainability. We are facing moments of opportunities and crisis where some industries will be successful, and others will disappear if they do not renovate. The organizations that are able to resist are the ones that are resilient.”
Aranda explains that resilience is related to the ability of each organization to transform its business model and for this it requires a Board of Directors and an administration that speaks that language. She details that this way the implementation of this type of strategy is facilitated and disruption is embraced.
“Do not get stuck in the business model that made you successful,” she clarifies.
With the specific definition of what is required, the next step consists in searching for the profile for each Board of Directors.
Aranda defines four categories of the necessary characteristics requested by the Pension Fund Administrators and also by the companies:
– Adaptability and flexibility: This is a type of intelligence that consists of thinking differently and quickly, says Aranda. “Having people with a critical spirit of what has worked in the past is not exactly what we are going to need in the future, we have to grasp the need to reinvent ourselves, assess and diagnose those risks.”
-Awareness of the social role of the company: “The candidate must be able to give a good reading of what is happening in the country. We need a degree of sensitivity associated with the person’s leadership to be able to promote the social issue within the Board,” she says.
– Awareness of public impact: In the opinion of the talent recruitment expert, this means “Understanding the impact that my decision-making within the Board of Directors will have on the well-being of the people and the development of the country”.
– Understanding from a sociological perspective: Aranda says that it is relevant that the candidate “knows what is happening and demonstrates a profound wealth of knowledge to choose strategies and to choose the people who will be in the company”.
Courage of the independent director
Due to the fact that companies in Chile are controlled by shareholders who usually own more than the 50%, either directly or through a controlling pact, the role of independent directors is vital. Thus, Aranda emphasizes that courage becomes another desired characteristic for the candidate.
Therefore, Aranda affirms that one of the additional requirements for this role is the degree of influence that must be shown in front of the rest of the members of the board of directors. “They must know about risk management, they have to have financial knowledge, they have to understand the management and governance of the different companies. In addition, the person must have an effective leadership to be able to face the challenges of the different companies, and to have some kind of influence over the rest. ‘
She considers that it is required to act bravely but clarifies that it should not be confused with acting disruptively, “This implies that the needle must be moved always considering the best interest of all shareholders.”
Another relevant aspect is compliance. Aranda sums it up like this: ‘There must not be a double agenda and the person must act with independence, with a proven track record’.