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KLENE: Servant leadership theory gains new relevance

By Donald A. Klene

Published December 1, 2008 at 12:01 a.m.

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Our country is in the throes of an economic meltdown that seems to require a government bailout that appears to override all opposition. Republican thinkers disapprove what they believe to be creeping socialism, and Democratic theorists rail against the bailout as a gross example of trickle-down economics. Yet the specter of another Great Depression is so alarming that both Republicans and Democrats have stepped aside in the face of a roaring economic disaster which seems, for all practical purposes, unstoppable.

We are in the midst of that bailout now, and the nation holds its collective breath while we wait to see whether or not it will work to stave off another Great Depression, and if it works, how large the bailout will need to be. No one seems to have a clear explanation of just how we came to be in such an emergency recession, or how we can prevent it from happening again.

Our situation is certainly complex, and I for one have no speedy cure-all. Yet it might be helpful to heed the suggestions made some thirty-five years ago by a protégé of the noted American financier, J.P. Morgan the elder, whose name was Robert K. Greenleaf.

Mr. Greenleaf wrote a series of monographs in which he developed the thesis that “caring for persons, the more able and the less able serving each other, is the rock upon which a good society is built.” Mr. Greenleaf was not a naive idealist who expected the immediate arrival of a golden age of peace and altruism. He had a clear insight, however, into the fact that caring for others, which had formerly been a man-to-man function, has now come to be undertaken through large institutions, which he described as complex, not always competent, sometimes corrupt. To regenerate such large institutions, Greenleaf advocated the retraining of the regenerative forces within them - namely, their trustees. Greenleaf did not accept government as the solution to our problems, for he believed that government often imposes a bureaucracy that is oppressive and corrupting, and since he thought that government relies too much on coercion and too little on persuasion, leadership, and example. As a result, observed Greenleaf, we are prone to become involved in adventurous and illegal wars; we have little confidence in elected officials; the tax structure is perverse; our treatment of prisoners is barbaric; and the cost of all this is staggering.

Business practices, he claimed, still follow too much the way of the huckster-trader of centuries past, economic performance is cyclical, and the penalties are often borne by the powerless. Too many firms are manipulated as financial pawns for short-term gains with little regard for social consequences or even for the long-term good of the firm. Despite what he viewed as the phenomenal production of goods and services, he wrote that the total social impact is far below what an “advanced” society should tolerate.

So where did Greenleaf look for a regeneration of American society, particularly American economic society? He looked at her corporations - particularly the largest corporations, and within those large corporations to a few dedicated trustees whose concern is not only for the well-being of the corporation but also for the well-being of the society which it proposes to serve. Greenleaf understood that corporations are truly creatures of the state, chartered by the state not only for their very existence, but also to receive some ongoing significant privileges, such as limited liability for their directors, officers, and shareholders, and the advantages of perpetual existence. In return, Greenleaf believed that corporations ought to serve the public good through trustees who made it their business to introduce a sense of public service into every corporate board room.

Where would such altruistic trustees come from? Greenleaf did not anticipate that such men would arrive suddenly and in droves, but he believed that there were some such trustees to be found, particularly among the young. Having found them, how could one really believe that such trustees would be accepted by the existing board rooms of America? As a general rule, corporate America might fear that such trustees would be too much inclined to rock the corporate boat. At the moment, however, the American people are looking for a new economic program which would give them some voice in their own economic life. The people are not likely to settle for a few curbs on executive compensation or the substitution of silver parachutes for those made of gold. If one wishes to develop an economic plan in which the people can once again trust our largest corporations to serve the public weal as well as the corporations’ own legitimate goals, the regeneration must come from inside those corporations, according to Greenleaf.

What is the relevance of Greenleaf’s concept of servant leadership to our current American scene? Assume, for instance, that 500 of our largest corporations need help from the current economic bailout. Then why not require each such corporation to welcome to their board rooms one publicly accountable trustee chosen from among distinguished men and women whose lives have demonstrated a real commitment to the public good? Such trustees could be compensated just as the corporation compensates its other trustees. Such public servants could publicize any company’s effort to over-compensate its chief executive by way of salary or benefits, but such trustees could go much further in demanding that in return for its corporate charter it discontinue the risky irresponsible management practices that have cost large companies their very existence, and their employees their jobs, and their retirees their pensions.

I am not an economist, nor an in-depth student of the writings of Robert Greenleaf, and so I may have misunderstood his teachings on some issues, but I believe that I have generally grasped the gist of his teaching. I believe that a program such as his, if carried out with skill and determination, would usher in a new era for corporate America. The result might well be that Americans could showcase for the world not only political democracy but economic democracy as well. As the great companies of America come to the taxpayers with hats in hand, asking for a bailout, perhaps the time is ripe for the taxpayers to demand in return a healthy economic corporate culture whereby all of us prosper from the bailout funded by all of us.

Robert K. Greenleaf, although he had an important message which has been studied in countries throughout much of the world, never took himself too seriously. He is buried in Highland Lawn Cemetery in Terre Haute, Indiana, where his epitaph reads: ROBERT KEIFNER GREENLEAF 1904 - 1990 TEACHER, PHILOSOPHER SERVANT-LEADER “Potentially a good plumber; ruined by a sophisticated education.”

Donald A. Klene is a lawyer in Arvada.

Comments

  • December 1, 2008

    9:30 a.m.

    Suggest removal

    JohnHKennedy writes:

    Unless the Democrats impeach Bush and Cheney Now,
    the Republicans, emboldened by the knowledge that the gutless House Democrats will no longer defend the Constitution and Rule Of Law (by impeaching a criminal President),
    will start planning the soonest possible impeachment of Obama.

    Oops... I forgot, the ReThugs are already working towards impeaching Obama. But our US House Democrats are asleep, as usual.

  • December 1, 2008

    12:52 p.m.

    Suggest removal

    Darwin writes:

    Wow johnny, you need to get back on your meds and go back to bed. You did get one thing correct, both the dems and the repubs are the cause of these economic problems and now charge forward saying "we will fix it".

  • December 1, 2008

    2:36 p.m.

    Suggest removal

    TC writes:

    Very good piece Don.
    Give the advanced grade level at which it was written, I'm suprised it ever got published in this rag.

  • December 1, 2008

    4:02 p.m.

    Suggest removal

    Elwood writes:

    Nice piece to read, but how do we implement it?
    No way the politicians would allow this, they think it is their job to regulate corporations. Corporations wouldn't allow it, there are way too many damaging secrets that would get exposed.

  • December 1, 2008

    4:27 p.m.

    Suggest removal

    tromiano writes:

    The spirit of service is best honed at a young age. One effective opportunity the government has to implement it is by requiring public service through the public school system. The lessons that are taught via helping somebody simply for the sake of helping them are far more persuasive than any classroom lecture. The phenomenon of 'Me-first-ism' has corrupted us, and those who can be the most effective examples of decency and servitude (politicians and celebrities) too often practice the exact opposite.

  • December 1, 2008

    6:13 p.m.

    Suggest removal

    The_Punnisher writes:

    Maybe these people that are suppose to be serving US, the US CITIZEN need a CONCRETE reminder of that fact.

    From the cop on the beat to the POTUS and everyone in between.

    That takes care of the PUBLIC sector....

    Also; when did corporate upper management salaries get higher than 20 times the salary of the lowest paid worker?

    http://www.huffingtonpost.com/amitai-...

    http://www.dailymail.co.uk/news/artic...

    What value does the public get? ( I count SHAREHOLDERS as public )