The General Assembly recently created a “Commission on Connecticut’s Leadership in Corporation and Business Law.” The Commission’s mandate includes some worthy specifics, and the more general charge of recommending policies to encourage businesses to establish and maintain their headquarters and operations in the state. The Commission has until Oct. 1, 2015, to develop and submit a 10 year “plan of action.”
While some of the specifics within the Commission’s charter are non-controversial and make great sense (creating a special court for business litigation, for example), the more general objective of recommending policies to make the state more attractive to business may be another example of the “words vs. action” phenomenon commonly seen in the political sphere.
It works like this: The words the Commission will use in its Oct. 1 report are ones we already know, and what we really need is leadership capable of putting words into action. And what are the words we already know about making Connecticut business friendly? How about these nine: “Connecticut needs to put its balance sheet in order.”
Balance sheets are very efficient documents. They compress into a few pages a snapshot of what lies in an organization’s past (how it has been managed) and what challenges lie ahead (how challenging are management’s tasks). In the same way that investors look at the balance sheets of businesses when making investment decisions, businesses look at the balance sheet of a state when deciding to stay, move or expand.
The state is the earth beneath a business’s feet; and if the state’s balance sheet is seriously asunder (which is the case in Connecticut) the business knows that in some manner, shape or form, it will bear a part of the state’s excess liabilities even if they arose long before the business entered the state. Recent comments from Office of Policy and Management Secretary Ben Barnes about “paying the price for 50 years of pension underfunding” speak for themselves.
The “words vs. action” dichotomy plays out somewhat differently in the private sector. When a business with an underwater balance sheet has restless creditors knocking at the door, the “words” are typically found in a report of a “turnaround consultant” whose job is both to offer an opinion on how to fix the balance sheet, and more importantly to help the creditors determine if management has the ability to take the actions necessary to turn the business around.
If there is a lack of confidence in management its members can be replaced, or supplemented by an appointed crisis manager who takes over the reins.
Of course, the ultimate management change takes the form of a bankruptcy court judge with sweeping powers to compel changes to the balance sheet.
Political entities have purposes and functions much different than those of business entities (which is not to say they do not have a common interest in effective leadership, delivering good services, and operating efficiently).
In the political sphere, leadership is chosen and changed by electoral means. The results of Connecticut’s November election are still warm to the touch, making this a convenient time to segue back to the question at hand — is our management team (the legislative and executive branch members collectively) up to the task? Can these folks take actions that speak so loudly for themselves that additional words become unnecessary?
I will hold my opinion on this question for the time being, and instead offer a standard by which we can measure their performance as we enter the next legislative session. It is a very high standard and one indigenous to Connecticut in the sense that it was articulated by a gentleman named John Filer at a speech I was fortunate enough to hear many years ago at the University Club in Hartford.
Mr. Filer was a major philanthropist and businessman (CEO and Chairman of Aetna from 1972 to 1984), and generally as good and capable a human being as Connecticut has produced. The speech was entitled “Leadership in a Democracy,” and it provided insight into the personal virtues and skills required to lead democratic organizations in which, unlike monarchies or tyrannies, power is shared and everyone has an opinion and a vote.
His words included humility, building trust, constructing consensus, reason, listening, selflessness and, as important as any in times of fiscal crisis, the personal toughness to withstand with patience the anger that is always a consequence of hard decisions.
With Mr. Filer’s thoughts in mind I will observe the performances of our leaders in the 2015 General Assembly to see what they are able to deliver (or not).
John M. Horak has practiced law at Reid and Riege P.C. in Hartford since 1980. The views expressed are his own.
