Rwanda Inc. and tale of a performing CEO

In 2007, an article appeared in Fortune magazine with a bold headline, “Why CEOs love Rwanda.” The article was in reaction to President Paul Kagame’s corporate endorsement at an annual shareholder meeting for Starbucks - a rare opportunity for an African Head of State. The article quoted some renowned CEOs in the US corporate world that had grown to admire the leadership style of President Kagame who they described as “quietly building a new reputation in corporate America” and selling Rwanda as “a business-friendly nation that wants to become a model of private sector development in Africa.” One of the CEOs who had Kigali summed up his experience of Rwanda as “the most undervalued ‘stock’ on the continent and maybe in the world” He said –‘here’s an African nation that’s reaching out, not to governments so much, but to corporate America. They want to work. They want U.S. business to bring innovation to their country.” Two years after this article, another identical headline popped up in the Fast Company Magazine in 2009---“Why CEOs of big global brands love Rwanda” The article described President Kagame as an ambitious man who has opened doors within the complex corporate world of the US. He has relied on “wealthy and powerful friends to lure private investment, train a new generation of managers, build a globally competitive economy, and wean the country off foreign aid.” The Harvard Business Review of April 4, 2013 was no different—it had a headline similar to the two above “Why Kagame runs Rwanda like a business.” My intention of bringing out these foreign publications is to show Rwanda’s model of leadership---one that embraces corporate governance with demand for results at the epicenter---and how this culture should probably guide our discussion around the decision on 2017. Let us assume that in this case, the state of Rwanda in business terms is Rwanda Inc, like other publications have mentioned. The constitution that governs this country is similar to a shareholders’ agreement, which sets the principles on which any sane company is to be governed. Within shareholders’ agreement are provisions on the management structure—the terms on hire, fire and retention of management usually guided by achievements on specific targets. At the helm of every corporate entity is a Chief Executive Officer (CEO). And we all know that a CEO whose growth figures are impressive—who understands his commitment to the shareholder and the company----who is 110% committed to its mission –who is strategic in orientation, but also very tactical in innovation---who adds value to the shareholder’s capital – is a CEO any sane shareholder would want to retain. The renewal of his/her contract is automatic since the ultimate goal of every investor is to enjoy a dividend at the end of the day. Similarly, in leadership, the ultimate goal is to get the right person who can move things in the right direction. For decades, bad leadership has failed Africa partly due to conventional democratic principles we naively inherited. We disbanded our historical institutions and quickly assumed templates that were not designed to suit our situation. As a result, we have scored below average when it comes to measurement of these principles partly because we simply swallowed what we had not tasted. This is why we probably need to go back to the basics. But let’s leave this discussion for another day. Back to the corporate governance culture—like I mentioned above, every successful business has the flexibility in determining its future depending on the results on the ground. If a CEO is performing below average, you do not wait for the company to fall into a ditch before you act. Similarly, if the CEO is excelling in performance, then there must be a retention mechanism not necessarily tagged to a mere a calendar. Therefore, we assume Rwandans are shareholders of Rwanda Inc. And as the debate on 2017 ranges on, all they need to do, is to go back to the balance sheets posted over the past 21 years and examine the results year-in-year out. If the Chief Executive has delivered exceptionally well - if they forecast a growth in dividend per share, then they have all the right to renew the contract. In simple terms, the constitution is not cast in stone. It’s cast in the spirit of the people’s will informed by results on the ground.

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Rwanda Inc. and tale of a performing CEO