The Ten Commandments for Running a Public Company

1. Thou Shalt Have A Sound Ethical Compass.

If the boss’s values are undemanding, the company’s will also be wobbly. That may not put it out of business, but it means the company will have to pay a premium for talent. Good people do not like working for organizations whose values they mistrust. But ethical values are difficult to acquire on demand, in middle life.

2. Thou Shalt Learn To Make Difficult Decisions.

Many judgments must be made on the basis of ambiguous information. Leaders often have to deal swiftly with conflicting demands without being sure of their facts. That calls for a strong stomach. Those who cannot bear to inflict pain or risk making enemies, or who need cast-iron evidence before making up their minds, should not apply.

3. Thou Shalt Have Clarity and Focus

Clarity and Focus are essential requirements for making those awkward judgments. Leading a large company, and dealing at speed with a host of complicated and many-sided issues, is an immense intellectual challenge. To extract the crucial point from complexity is essential for devising an effective strategy. In order to survive the clamor for time and attention, a leader must also be able to screen out unnecessary noise and to focus on what really matters. That goes with realism—there is no point in aspiring to the unachievable.

4. Thou Shalt Build An Empire

The best leaders are empire-builders who want to create something that outlasts them. That is different from ego-boosting personal ambition. It supplies the ruthless drive and the obsession with excellence that are essential components of good leadership.

5. Thou Shalt Communicate Clearly

All businesses require a corporate leader who can talk convincingly—which is not always the same thing as telling the whole truth. Motivating a large workforce requires a gift to present a clear vision persuasively. A leader who cannot inspire trust and convey authenticity will find the task difficult.

6. Thou Shalt Be A Good Judge of People

The ability to judge people is an essential prerequisite, given the importance of human capital. Judging who will work best in which slot is one of the key tasks of leadership. Like so many aspects of the top job, it requires intuition as well as experience.

7. Thou Shalt Develop Great Talent

A knack for developing talent is needed to build a stock of future leaders. People learn far more about the art of leading from a good mentor than from a great book. So effective leaders need not only to spot where the talents of a particular individual might be best deployed; they must also be teachers, conveying their skills to those around them (and encouraging others to teach their colleagues too). That is the way to create leaders at many levels in an organization.

8. Thou Shalt Have Emotional Self-Confidence.

Accumulating a pool of talent requires an ability to work with people who may be better at their job than you are at yours, and to guide and motivate them. Leaders who are jealous of their followers do not inspire loyalty. Self-confidence also allows people to admit to weakness and ask for help without feeling defensive or inadequate. Successful leaders need to be able to say, “I don’t know what to do next,” without losing the respect of their colleagues.

9. Thou Shalt Be Adaptable

Adaptability will prove invaluable when things go wrong. Surviving a reverse calls for resilience and flexibility. It is one thing to spot a change in the market, or in public attitudes, or in the political climate. It is quite another quickly to devise a completely different approach, even if that means abandoning an idea to which a leader has been passionately committed. The key seems to be an ability to “reframe”: to reshape a problem so that from some angles it can look like a success.

10. Thou Shalt Be Charming

Charm is not a quality taught on MBA courses, but few get to the top without it. A bit of luck helps too, though that may prove hard to arrange.

Many of these qualities are useful for leading any enterprise, but especially a publicly traded corporation. In turn, the way companies are led determines the prosperity of nations and the happiness of their workforce and their customers.

In response to the scandals and collapses of the past two years, governments have rushed in to tighten the rules of corporate governance. That is no bad thing: good governance may not guarantee good performance, but at least it provides tools to tackle bad management. And it is right to give boards a sense of responsibility and the means to exercise it. All this helps to rebuild trust.

There is, though, a danger that regulators, under pressure to be seen to act, will eventually go too far in some countries. Regulation is only one of several growing and conflicting constraints on corporate leaders. The glare of the media, the incessant demands of analysts and the increasing politicization all make the job harder to do well. But corporate leaders now have an alternative. The demand for capable people to run businesses held by private-equity ventures is booming.

Running a large public company is still a thrilling and rewarding job, but nobody should take it for granted that there will always be a supply of leaders with talent and integrity willing to take it on. Too much mistrust and invective, and some of the best may simply decide the task is not worth the effort.