Transcript The Rohatyn Group

PRME
Principles for Responsible
Management Education
Latin America Regional Meeting
December 6th,2011
Miguel A. Gutierrez
PRME
Principles
Responsible Management Education
Why
am Iforhere?
• My comments for this morning are based on my
experience as a practitioner
– 21 years working at JPMorgan in different positions,
the last 7 years as head of Emerging Markets.
– Chairman of the Board of Telefónica de Argentina
2002-2004.
– Chairman of the Board of Grupo Concesionaria del
Oeste (Argentina) 2001-2004.
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PRME
Principles
Responsible
Why
am Iforhere?
(cont’d.)Management Education
– Board Member of Telefónica Internacional S.A.
(Spain) 2005-2011.
• Member of the Institutional and Government
Relationship Committee.
– Board Member of Telesp (Brazil) 2005 2011.
• Member of the Audit Committee.
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PRME
Principles
Responsible
Why
am Iforhere?
(cont’d.)Management Education
– Board Member ABERTIS
Infraestructuras (Spain)
2005-2011.
• Member of the Nomination and Compensation
Committee.
– Founding Partner at The Rohatyn Group, a USA
Emerging Markets Asset Manager with $ 3,5 billion
in assets.
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PRME
Principles for Responsible
Management
Observations
of current
situation Education
• The events of 2008/2009 have caused significant
turmoil and confusion among politicians and
regulators. Pendulum shift to an extreme position.
• Legal and regulatory environment significantly
changed.
– Several laws put into effect as a reaction to market
events
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PRME
Principles for Responsible
Management
Observations
of current
situation Education
(cont’d.)
– Countries implementing their own set of laws and
regulations
•Significantly overlapping regulations. Local jurisdictions
competing for control of the regulatory process in a
global economy
•Many of the laws and regulations have yet to be
implemented
•High cost of compliance with all regulations
•People do not have the proper understanding of all the
regulations governing their businesses as a result of their
quantity and wide range
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PRME
Principles for Responsible
Management
Observations
of current
situation Education
(cont’d.)
• Institutional investors redesigning their own internal
procedures following their experiences in 2008/2009 –
self imposed regulations.
– Direct investments as opposed to fund investments
– Manage accounts as opposed to fund managed
pools of capital
– Reshaping internal controls and roles of
government bodies
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PRME
Principles for Responsible
Management
Observations
of current
situation Education
(cont’d.)
• Corporations trying to comply with the rules and
making sure that they tick the check box on all
requirements.
–
–
–
–
Sarbanes Oxley
Dodd-Frank
Bribery Act
FCPA
• Paradise for lawyers and compliance officers
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PRME
Principles for Responsible
Management
Observations
of current
situation Education
(cont’d.)
• Society at large disappointed and angered by
business scandals
– Significant social and economic cost of criminal
actions
– Pressure to take action and incarcerate
perpetrators
– Questioning socio-economic values and the people
in leadership positions
– Challenging the rule of law, institutions and the
educational system
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PRME
Principles
for Responsible
Management Education
How
we get
out of here?
• I strongly believe we need to come back to
individuals using common sense to govern their
actions when conducting business.
– While laws and regulations help to provide a
framework there is no substitute for common sense
– Culture plays a significant role on human and
employee actions.
•Corporate culture key to good behavior. People look
at their environment and look up for direction.
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PRME
Principles
for Responsible
Management
How
we get
out of here?
(cont.) Education
• Socio-economic cultural environment also
determinates behavior.
– Societies with high level of corruption and weak
institutional environments
– Weak rule of law
– Weak judiciary
– Societies with high levels of inequality
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PRME
Principles for Responsible Management Education
Recommendations
• The question I was asked was how business
schools can help in this process
• I believe there are many ways business schools
can help:
–Instilling the use and application of common sense
•Follow the laws and rules but apply your knowledge
and judgment
•Train your students on the appliance of the rules as an
exercise of every day business life, not merely a
checklist we must apply to avoid problems
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PRME
Principles for Responsible
Management Education
Recommendations
(cont’d.)
•Reform the way these issues are presented to students. They
should be embedded in the daily student experience: e.g. it
has to be part of their “total academic experience” and be
part of the decision-making tree they will experience and
apply at the University day after day.
•Teaching students the human cost of not doing business
ethically and in compliance the law, but also making them
understand the cost for the society in which they operate.
•Let me share a couple of slides on the current European
crisis that were brought to my attention by Professor Mauricio
Rojas from the University of Lund (Sweden). You will see that
all the determinants of the current crisis might arise be from
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the economic variables and mismanagement.
PRME
Principles
for Responsible
Management Education
Nivel
de Virtudes
Cívicas
Fuente: V. Pérez-Díaz y J.C. Rodríguez, Cultura moral e innovación en Europa, Panorama Social 2011.
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Calidad
PRME Institucional: Corrupción del sector público
Principles
for Responsible
Management Education
(100=
totalmente
corrupto)
Fuente: Transparency International, Corruption perceptions index 2010
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Excelencia
académica: puntuación entre 200
PRME
Principles for Responsible
Management
Universidades
top (2011,
per cápita)Education
Fuente: Times Higher Education, World University Ranking 2011-2012
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PRME
Recommendations
(cont’d.)
Principles for Responsible
Management Education
•Business schools have a significant role to play in molding
the students but also in interacting with global/regional and
local institutions at large to:
– Help to establish a global/regional and local regulatory and
compliance system, with adaptations for local environments.
• A base structure to be applied globally the same way that the
world gets together to organize commerce or other important
activities
• Work with local governments to implement the rules and
regulations that make sense for their particular country or region
taking into account the cultural aspects that we described before.
Help local business communities to understand the importance
of following the rules and the society impact of doing things right.
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PRME
Recommendations
(cont’d.)
Principles for Responsible
Management Education
– Help to change the culture of the society in which you
operate to make sure that we help to make a change that
will benefit society at large. Consider working with
politicians, judges, government officials to make sure they
understand the importance of these rules
– Work with societies via non-governmental institutions to
learn their concerns and how we can channel them
through your every day life at the business schools
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PRME
Recommendations
(cont’d.)
Principles for Responsible
Management Education
•I believe this will be a long process and one that will
some time and trials until we find an stable solution,
so please be prepared to play a very active role and
participate in every possible way in the process.
•Society will thank you all for your contributions!
•Thank you
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