Managing Leadership^®

The responsibility for administering a business originates, unsurprisingly, in owners. They are the only group naturally possessed of the requirement to make decisions regarding the direction and management of the organization. They can delegate their authority to other groups, but not their responsibility.

Except in circumstances wherein they become one or another sort of silent, or absentee, owner. While many partnership arrangements provide examples of this, the classic is the shareholder-owned corporation.

In this case fundamental administrative responsibility is placed in a board of directors. The board then hires a manager or management team to, typically, take on the greater part of this burden.

The purpose of this perfectly legal sleight of hand is to facilitate productive investment and entrepreneurial activity. But in the context of the current discussion, it is important to keep track of what has happened, here: responsibility that ordinarily cannot be delegated by owners has been structurally removed from them and placed into the hands of one group, which retains a directive role and then contracts out – not delegates – responsibility for management, to another group.

Thus, administrative responsibility has been transplanted into a group where it does not naturally arise. The strength and integrity of the chain of responsibility have been diluted quite a bit by this process, and it is not unexpected that some may under-appreciate the significance of this fact.

Here is that significance: just because responsibility has been removed two degrees from its normal source – from owners through directors to managers – we are not to conclude that it can be further extended, divided, or assigned. It is not a resource belonging to managers which they can allocate. It is a fiduciary duty they have shouldered which they cannot share.

So, however deeply in thrall you may be to the most genuinely inspiring and seemingly enlightened modern management theories, you cannot give away your responsibility to run the company. It is yours, and whether you do it personally or not, you must retain – you will be held – responsible for it.

You own the management-level decisions made in your company. You cannot give ownership of them to employees.

But you can do something else. We’ll talk about that next – see you tomorrow!

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