What is actually wrong with behaving like the Sun King himself? That’s simple. It obstructs a team effort, because everything revolves around the Sun King. It impedes the exchange of ideas and thoughts, because the only relevant thoughts are those that spring from the brain of the Sun King. It hinders feedback and criticism of the Sun King’s behavior. After all, he is perfect. It creates the risk of errors, because the Sun King’s subordinates no longer take responsibility themselves for the organization’s well-being. Systematically it has been proven that Sun King behavior leads to the demise of the company (and in the case of institutions and countries: of the institution and – eventually – the country). It must therefore be avoided and be oppressed as soon it is observed.

How can you recognize Sun King behavior of politicians, directors and supervisory board members? Sometimes that’s easy. In a previous column I mentioned that a former director of a housing corporation had a Maserati for a company car. That’s a King driving around! Very easy to see. Usually it’s harder to recognize Sun King behavior. That’s because the signs are more subtle, and often also because we are not willing or able to see those signs. Sometimes, the Sun King behavior is even encouraged by the outside world, for instance when a CEO is given an ‘Entrepreneur of the Year’ award. In such a case you must be level-headed not to start thinking yourself that you’re great. Some CEOs even wind up on the cover of a magazine. That also contributes to your so-called eternal fame and definitely to your vanity.

If you witness Sun King behavior, it’s usually too late. For a supervisory board member it’s therefore important to recognize the early signs, so that there’s still time to intervene. But what are you looking for? Literature mentions the following signs, amongst other things: extreme demands of secrecy and loyalty; high salaries, continuously increasing bonuses; hiring a court of ‘own advisers’ and ‘own staff members’ (yes-men); a pattern of exorbitant expenditures; not taking the supervisory board seriously; creating privileges for themselves and for selected staff members; denying the existence of risks and consequently taking increasingly greater risks; a lack of ability to self-reflect; a qualitatively weak staff; a weak control function.

If you recognize these signs, what can you do? A lot of research has been done on that subject. Strengthening the control function is most important: the supervisory board must visibly take its responsibility and function as a supervisory body. By the way, that is something completely different than taking over the management function. The quality of external control functions, as exercised by an auditor, can also play an important positive role. Installing a ‘risk committee’ that oversees the establishment of a risk management system may also help. Obviously, the organization’s internal culture is very important: is giving feedback, up and down the organization, promoted or avoided? A board that is made up of multiple people can also contribute positively. Joris Lammers advocates the appointment of a ‘court jester’, whose main task is to challenge the behavior of the top executives in an ‘out of the box’ kind of way. This is somewhat similar to appointing an ‘opposing board member’ as a line of defense. That is a commissioner whose task it is to voice an opposing opinion in the case of unanimous decisions by the board. That can be useful in order to prevent tunnel vision and ‘group think’ within a supervisory board. The conclusion is: Sun King behavior is the product of our own behavior. Just like obesity, cardiovascular disease and lung cancer. In many cases you can prevent it, but you’ll have to be willing to acknowledge it.

This blogpost is also available in Papiamentu. Click here to download a pdf version.

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.

If you recognize these signs, what can you do? A lot of research has been done on that subject. Strengthening the control function is most important: the supervisory board must visibly take its responsibility and function as a supervisory body.

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