People are not much different than animals. In fact, we are a kind of animal. It has been known for quite some time now that when it comes to their genetic makeup, mice and pigs are almost identical to humans. You don’t need to be a genius microbiologist to see that. On the surface we look a little bit different than a mouse or a pig. Functionally speaking, however, there are virtually no differences. Just like mice and pigs we have a head, four limbs, nails, teeth, similar intestines, a brain and so on. We procreate in the same way. Quite a few people don’t seem to be much smarter than mice and pigs. When it comes to morals there’s not much difference either. In what way do we differ then?

In his book “Sapiens, A Brief History of Humankind”, the Israeli professor Yuval Harari describes it as follows: humans are capable of connecting with larger groups of other people through their ability to jointly believe in an abstract, made-up idea such as an institution. Examples of such institutions are a king, the court of justice, or a country. The management of a company is also an institution. What makes an institution special is that this (abstract) concept makes it possible for very large numbers of people to believe in it and work for it and achieve great things. People are even willing to fight for institutions, if necessary. In that case you’re not fighting for your daily bread, but for something abstract, something in which you believe wholeheartedly and are even prepared to die for. This is what makes people fundamentally different than mice and pigs. Mice and pigs won’t die willingly for an institution. Never.

The ability to believe in institutions makes it possible to organize ourselves at a much higher level than mice and pigs can do, and with much greater results. A plane in the sky is the product of the brainpower and the collective work of many thousands of people all over the world. These people range from the engineers who design the aircraft and the workers who mine aluminum in South America to the fourteen-year-old girl who makes a part of an airplane chair in a sweatshop in Shanghai. All of their efforts combined result in a product that can fly like a bird. A director who manages a company can only do so because the employees are willing to see him or her as a director and act accordingly. The same applies to a supervisory board. It functions through authority and not based on power. If we stop believing in it, it’s end of story. That’s why revolutions are very radical by definition: when we revolt we let go of our faith in the king, in the court of justice, in the management of the aircraft factory. This will either result in chaos or, after a reordering such as takes place in a kaleidoscope that is shaken, in the creation of a new combination of institutions. In turn, these institutions too can only exist if we start believing in them.

Being careful doesn’t mean being uncritical. It is certainly risky though to shake the kaleidoscope without a well-founded, realistic chance at better institutions. Doing nothing more than just shaking the foundations of those institutions will usually only lead to destruction. This is easily achieved through slander, through insinuation, through ridicule, et cetera. When there’s no alternative in sight that is fundamentally better, this will inevitably result in self-destruction. Mice and pigs don’t self-destruct. Never.

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Do you have a question about corporate governance yourself? Please e-mail it to governance@ekvandoorne.com and perhaps your question will be discussed in the next blogpost.

The moral of this story is that we have to handle all of our institutions with care. This not only applies to management boards and supervisory boards, but also to the court of justice, parliament, the governor and the kingdom.

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