The business of governance

At a recent conference in the British Virgin Islands, I was asked to imagine that the country was one of my new companies: what would I do to help it perform better? There are skills that a chief executive officer (CEO) can bring to government, in terms of providing decisive leadership, creating accountability and guiding long-term planning. This year the American presidential election is being fought on a mandate to turn around the largest company in the world—the United States economy—after years of underperformance and faltering growth. President Barack Obama will have to prove he can be an effective CEO by presenting a concrete plan to get the economy going, create jobs and bring the deficit down. Leading the imaginary company BVI Ltd would be a somewhat smaller challenge, but one that would include my home, Necker Island. As chairman and CEO, here is my five-point plan:

 

Review your assets

To work out how strong BVI’s position is, we must ask these crucial questions:
What made this company successful to date? 

What does it sell and where does its income come from? 

How secure are its assets, in case of future problems? 

What are the threats to the business?

BVI relies on its strengths in financial services and tourism. As an offshore financial centre, it is one of the top five countries in the world for the incorporation of companies, with hundreds of thousands of companies registered. 

Its business-friendly environment and proactive government should attract interest from around the world. However, this source of income is reliant on the policies of overseas governments, which can change unexpectedly.

 

Protect your income

As a cautious chairman, I would make sure that BVI’s other source of income—tourism—was secure, sustainable and growing. Despite the global competition, 500,000 people visited this country in 2010 to enjoy its outstanding beauty, both on land and in the ocean. So it is not tourism that is the company’s greatest asset, but the environment. This resource is threatened by development, pollution and human activity. The first thing a tourist sees when arriving by boat at the North Sound of Virgin Gorda—a resort area for sailors —is a new road that has been bulldozed out of the beautiful hillside, creating an ugly scar. Once landed, a visitor will encounter litter, a sewage system without treatment plants, and will find few opportunities to recycle. If that person goes for a swim, he will see reefs that are seriously damaged from run-off and overfishing. Altogether, this does not make for an entirely pleasant visit. The economic implications of our deteriorating environment are very serious. This slow destruction could ultimately jeopardise BVI’s most secure source of income, but it’s not too late to implement solutions.

 

Focus on priorities

Next, I would protect BVI by drawing up a list of action points based on this assessment of its strengths and trouble spots. I would ask the management team to continue to encourage necessary development, but to make sure that every development enhances the country’s natural beauty. If a road absolutely must be built, we must include plans to plant native trees and shrubs alongside to block noise, prevent erosion and preserve habitat—and perhaps increase it.

 

Adapt to your size

When my wife, Joan, and I first visited the British Virgin Islands in 1976, it was a fairly sleepy place. There was one office building in the capital, Road Town; the financial services industry was not yet established and there was little tourism. While the country is very different now, in some ways the government’s approach does not seem to have changed—especially, the emphasis on the short-term, as seen in the degradation of the environment. Small companies that have grown larger often make the mistake of relying on processes from their early days, not realising how much things have changed. When new management takes charge, executives should take the opportunity to wipe the slate clean and create a new set of policies from scratch, based on new realities.

 

Create the right environment

With expanding responsibilities and growing numbers of stakeholders to consider, a good leader needs to be a great listener. I asked local entrepreneurs to describe one change that would make everyone’s job easier: a few pointed to hoteliers’ struggle to obtain licenses to hire foreign workers. In the British Virgin Islands, business owners have been supportive of restrictions on work permits to prevent overcrowding and to protect local people’s prospects. However, most feel that the current system of rules governing immigration and labour is not working. This system is in need of an overhaul, which would help employers to build a loyal workforce and bigger customer base. The British Virgin Islands weathers the hurricane season every year, ensuring that its infrastructure and people are protected. In much the same way, a company needs to be protected against the current financial storms. This plan would serve a start-up, a large company or a country equally well in assessing potential challenges and successes ahead.

 

Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. He maintains a blog at www.virgin.com /richard-branson/blog. You can follow him on Twitter at twitter.com/richardbranson. 

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