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The Brexit Wake-Up Call: Time for Fair Process Leadership

Ludo Van der Heyden, Chaired Professor of Corporate Governance & Professor of Technology and Operations Management, Director of the INSEAD Corporate Governance Initiative at INSEAD |

With trust long gone, and fair play having given way to continued and self-interested negotiation, a sustainable future for Europe requires new leadership; collaborative, visionary, and inspiring.

The main problem for the EU and U.K. today is the lack of fair process leadership (FPL), a leadership method that generates trust, individual commitment and collective performance. It is a concept that is insufficiently known and taught and also works in reverse: violations of FPL reduce trust, commitment and performance.

The impact of FPL can be seen through the annals of history. George Washington and Abraham Lincoln were amazingly fair leaders. A lot of what makes America great is still due to the shadow and imprints cast by their leadership.  Similarly Mandela, De Klerk, and Tutu were fair leaders who led South Africa to end its apartheid chapter, and open a new one. 

Leadership is key.  Even in fair process cultures, due process and prevailing fair play can disappear when leaders stop being fair with each other and with their citizens, or when new  leadership takes power that is not rooted in fairness: the successors of Mandela, De Klerk, and Tutu are living proof of that.  Gross violations of fair play also are the biggest charge against the Bush administration (that of George W., not the father), and lies at the root of the Iraqi disaster we are living through. 

If the EU is going to be great, the EU president and commission must be perceived by the EU people as practitioners of fair process leadership.  If not, the project has no chance.  That is the big lesson from the Brexit vote.

Therein also lies the hope that lessons will have been learned, generating renewed energies and commitments to fair process leadership to the benefit of all.  There is no other sustainable path.  The future of the EU requires fair process – precisely because it is innovative, and thus challenging.  And away from very destructive haggling about fair shares.

Fair play as a platform for true value creation

The first requirement for FPL is the prevalence of fairness, as a basic premise or value proposition.  Here also lies the first hurdle, for few people would blatantly admit they are unfair. While we tend to see ourselves as fair; in fairness, what truly matters are the views and perceptions of others.  Sartre was both right and wrong when he wrote his “L’Enfer, c’est les autres.”

Beyond an egocentric view of fairness, the second big confusion is that between ‘fair share’ and ‘fair play’. Fair play is how we play the game, it is within our realm; fair share is largely what we inherit, and is largely the work of others

When people accept that the game has been played fairly, even those who lose or get a rough deal will be more likely to accepting it. Conversely, the pursuit, especially the passionate and exclusive pursuit of fair share typically generates unfair play. Financial traders, for example, in pursuit of their share of profit resort to unfair play, illegally seeking “inside information” to generate superior returns.

Four basic conditions are necessary to achieve a state of fair play: clarity (or transparency), consistency (the absence of bias, whether against people, over time, or across issues), voice (the ability to speak up without fear of reprisal) and changeability in the face of new evidence.  Philosophers, after long debates, did conclude that fair play could not be mere compliance to these 4 basic factors, and have added a 5th one, rendering the conditions complete, which amounts to the presence of a spirit of truth seeking and commitment to “doing the right thing.”

These five defining conditions of fair play were all lacking in the lead up to the Brexit vote.  With predictable consequences, if we can be guided by FPL theory.

The pursuit of “fair” share at the expense of fair play

A premise of democracy is that people know what they are voting on, are presented with clear options and understand the likely consequences.  None of this was true in Brexit.  Brexit leaders unfairly reframed the vote, transparency was lost in the process, and, contrary to their superficial slogans, the culture of doing the right thing for the U.K. was replaced with pure ideology (violating the criterion of changeability), self-interest, or emotion.

UKIP and many Brexit voters were driven by an independence ideology that the British nation is sovereign and ought to remain so. Paradoxically, the most likely outcome (if this farce is played to its unhappy end) is that Scotland (and perhaps also Northern Ireland) will now seek independence.  This is truly becoming Independence Day, but not in the way former UKIP leader Nigel Farage assumed: the farce is boomeranging back!  The ultimate paradox of Brexit is that Britain, like the EU, is not a nation, more of a federation.

What drove the politicians to hold a vote on Brexit to begin with? David Cameron sought to shore up leadership of the Tory party; Leave campaigner Boris Johnson wanted the leadership, showing little inclination to do the “thing” that a large majority of Londoners wanted, which is to remain inside the EU. The vote gave Farage another platform to voice his hatred of the EU, and to peddle his most deceitful premise “we are going to make Britain great again!”  As FPL theory predicts, all have since lost, and got their “fair share” in return. 

Where were the voices presenting the EU viewpoint, with clarity, foresight, and passion, and talking about a world that is converging and so interconnected that it is scaring many, especially the elderly, into believing that national retreats are the only haven?

The Brexit debate showed that the voices of Jacques Delors and other EU founders – such as Adenauer, Monnet, Schuman, and Spaak – have gone silent. Every voice that could enlighten was immediately silenced by nationalists (a well-honed tactic, practiced in other EU countries as well). Obama was a sole voice, but his intervention was seen as unfair play and thus backfired.

Where have the leaders gone?

Leaders are there to unify a group or country behind a clear purpose, and not to divide them more than they already are (unless division is the only out). 

In current circumstances, the referendum was neither needed nor helpful – except for reasons of opportunistic party politics.  A great leader does not take their country hostage for their private agenda.  History should have taught us by now just how dangerous this path is. The Brits are now finding out that, in an interconnected world, sovereignty is not equivalent with bliss. 

Cameron by calling the election, Farage and Johnson by their emotional tactics of fear, ridicule, nostalgia, and lies (involving promises of more monies for NHS, definitely not an EU issue) are likely to have inflicted more damage on the U.K. and the pound than any vindictive Brussels bureaucrat could have envisaged.  FPL theory states that it will not bring them far in the short and medium run, and that it will not be sustainable in the long run.  In the case of Johnson, it has only taken a few days for him to resign from becoming a candidate for PM, while Farage has also departed after admitting, with revealing cynicism, that some of his Brexit lines were lies.

A good decision process is one where the alternatives and consequences are clear, including the outcome of a “no.” A referendum should never be called on something that is so hard to fathom, let alone understand: the future of the U.K. is a formidable question, the future of the EU is an even bigger one.  Both requires considerable, informed debate.

The U.K. has seen a 100-year decline relative to its grand past.  Joining the EU was a grand change: from Commonwealth to EU-wealth.  One of the great shames of this entire debate is that the U.K. never quite tried EU leadership, and that the EU has never seen what U.K. leadership could bring to the EU project.  It remains one of the great unanswered questions.  

And now what?

Contrary to the prophets of doom, the world is converging, nation states have to unite, in the interest of the planet, the world, and themselves. 

The EU is a very modern idea, a true innovation; like any innovation, it is imperfect.  But it would be both a denial of the history of nations and of the human race if the temporary denial of fair process leadership as represented in the Brexit episode were to sustainably take the upper hand. 

The EU is a movement for fair process that calls for greater and fairer leadership.  Brexit may be the necessary wake-up call, both for the U.K. and for the EU.  I personally would like to see the U.K. firmly part of the EU.  But fairly, authentically, with a clear voice, one that is willing to listen and change its mind based on facts (or, as they say in Washington, true facts), bringing to the EU debate all its talents and competences, and its unique viewpoint. 

It may still happen. Teilhard de Chardin, Jesuit, philoshoper and medical staffer in World War I, commented on the misery around him in the trenches, “I am not despairing yet, something good will come out of the current mess.”  The day may still come that Britain will contemplate its EU return, immensely satisfied of the EU soul searching and authentic transformation that its Brexit vote triggered, and bolstered with unashamed pride of having changed the EU for the better.

This article is a condensed version of Professor Van Der Heyden’s recent paper The Brexit Wake-up Call: Time for Fair Process Leadership

Ludo Van der Heyden is Chaired Professor of Corporate Governance & Professor of Technology and Operations Management at INSEAD. He is the Director of the INSEAD Corporate Governance Initiative an co-Director of the International Directors’ Programme and Value Creation for Owners and Directors and lectures on governance, leadership, and business model innovation.

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