Author Archives: Tommaso Arenare

About Tommaso Arenare

Based in Milan, I help investment banking, retail banking, infrastructure, and financial services clients reshape their businesses. I advise on CEO succession, leadership development, corporate governance, and board consulting. I am passionate about creating an impact and changing the world for the better. My work is a phenomenal way to do that. Before joining Egon Zehnder, I had nine years of corporate and investment banking experience, first in corporate banking with HSBC in Milan and then as part of Citi’s Global Relationship Banking team in Milan and London. Within Citigroup, I was part of Schroder Salomon Smith Barney’s European Investment Banking business and contributed to equity capital markets transactions for Italian companies. I then moved to the Equity Capital Markets desk of JPMorgan and continued to focus on IPOs, rights issues, and convertible bonds for Italian companies. I earned a cum laude Degree in Business Administration from Bocconi University in Milan. I am an Italian Chartered Accountant and have completed the International Executive Programme at INSEAD. I am passionate about improving corporate governance and board performance. I am married to Francesca and father of Benedetta (2005), Riccardo Giorgio (2007) and Vittoria Camilla (2016). I was born in Florence and currently live in Milan. You can also find me on Twitter and LinkedIn. Through my work, I have been privileged to connect with a large number of exceptional individuals. With those people, I share thoughts and keep a constant dialogue on themes I like and consider connected to my satisfaction: Leadership, Corporate Governance, the benefit of gender diversity (I have pioneered the #diverseboards hashtag on Twitter), unconscious misconceptions when talking about "career" and much more.

Only the brave

Posted on by
1

Erik F Nielsen is Global Chief Economist of Unicredit, one of continental Europe’s leading banks. Prior to that, he had been Chief European Economist at Goldman Sachs, for several years. That was the job he held when I first met him, in 2011.

I have always admired Erik’s ability to see through the fog, his being brave in his well-rooted capacity to read people and their behaviour.

For a second, let’s go back to the situation in Europe a year ago. On 10 October 2011, Moody’s and Fitch had cut Italy’s rating heavily (Moody’s by three notches to A plus – yet higher than today’s…). Erik pointed this out, but then clearly argued:

“But sometimes the market gets it all wrong, as is the case now.”

Hence, his argument continued, Italy’s debt was a much safer bet than others, such as the UK’s triple A. Italy would get things done and make it.

Erik gave me the occasion for my first tweet ever, on that very day:

Almost a year (and many hundred tweets) later, Professor Monti, Italy’s Prime Minister, could speak at the Council on Foreign Relations, on 27 September, pointing out that

…by the way, Italy will have next year a balanced budget in structural terms,… And we will be one of the first two, hopefully, EU member states to have reached that… very demanding objective, which implies, to give you an idea, that given the huge stock of debt, we will have and we are having year after year some 5 percent of GDP primary surplus.

Only the brave (as Erik Nielsen, Professor Monti and, luckily, many others with them) could have seen all this, a year or so ago.

I will finish with another tweet and a little hope, again from Professor Monti’s speech at the Council on Foreign Relations:

Seven more years of Monti’s leadership, as seven years is the mandate that the Italian Parliament will award to our next President of the Italian Republic.

Only the brave…

Tommaso Arenare

Wrong brain, wrong education and that little nudge to help

Posted on by
1

As a fact, in the US listed companies, about 15 board members out of 100 are women.

As another fact, the US has historically rewarded merit and competencies more than many other countries.

How can then happen that in selecting people, one of life’s most crucial choices, we are so biased as to unconsciously neglect merit and competencies?

Breaking the impasse is possible, if we try to tweak some consequences of two unconscious biases through a little nudge.

Similarity bias happens when we select people that are more similar to us, as opposed to people who appear more different. Evolution has fostered this trait, as a key manner to survive ever since the difficult times when we would live in the savannah, trying to escape from animals and all sorts of dangers.

We have the wrong brain and the wrong education. When making people decisions, we fall pray into a series of unconscious psychological biases, such as surrounding ourselves with similar people with whom we feel naturally comfortable. Many of these biases were very effective for our primitive ancestors, but they are no longer useful for building great teams which require complementary and highly sophisticated skills.

Claudio Fernández-Aráoz, Author of Great PeopleDecisions, 2007

A “similarity bias” results when individuals are more likely to imitate cultural models that are perceived as being similar to the individual, based on specific traits (such, for instance, age, gender, geographical location and so on…).

Similarity bias is even enhanced by our other bias, which we call snap judgement, whereby we unconsciously make up our mind on someone during the first milliseconds after we meet. I have separately written about the many benefits of overcoming snap judgements.

The combination of snap judgements and similarity biases is the one reason why gender diversity (but also age diversity, geographic diversity and possibly many other aspects of diversity) is so difficult to happen without a little nudge (such as that of a proper law).

That little nudge lets us overcome unconscious fears, to the advantage of merit, competencies and corporate governance.

Tommaso Arenare

Ambassadors of merit

Posted on by
3

Together with Claudia Parzani, a Partner at Linklaters, Anna Zanardi, an executive coach and Marco Massarotto, a digital entrepreneur and social media expert, I have the privilege of being part of the “faculty” of “In the Boardroom“, a programme that Valore D, an Italian association of companies to support female talent and leadership, is offering free of charge (the faculty itself operates at no charge) to a selected number of exceptional Non Executive Director candidates.

A group 35 of super-talented executives was selected to spend one full day per month, for a year, in a classroom, sharing and discussing best practices in corporate governance, with a view to becoming instruments to change corporate governance for the better, from inside the Boardroom.

After a first full day in the classroom with these exceptional executives and professionals, I will celebrate a very simple thing: these people’s entry in the Boardroom will be the result of a process entirely based on merit and competencies, overcoming the drawbacks of traditional biases in the selection candidates.

Ambassadors of merit.

This is, per se, an exceptional occasion to celebrate, as well as an example to become best practice beyond the borders of Europe.

Tommaso Arenare

A year ago and another good example

Posted on by
Reply

It was a year ago, 24 August of 2011.

Steve Jobs wrote this now famous letter to the Board of Apple:

To the Apple Board of Directors and the Apple Community:

I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know.

Unfortunately, that day has come.

I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.

As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.

I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.

I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.

Steve

A year has gone. Three sentences strike me when reading this today:

  • “If there ever came a day (…), I would be the first to let you know”
  • “I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple”
  • “I believe Apple’s brightest and most innovative days are ahead of it”

Here’s an excellent “Progress Report”, one year later, by Fortune’s @adamlashinsky.

So many times we realise how difficult it is to be an example in stepping down after identifying and growing a successor.

Leadership succession is yet another area where Steve Jobs has reshaped existing paradigms, for the better.

This deserves to be remembered.

Tommaso Arenare

The tech industry in the US, #diverseboards and fostering merit in its own cradle

Posted on by
Reply

I am particularly glad to read this great article as it relates to the US and the tech industry, both rightly considered a cradle for merit and competency-based choices. In fact, focusing on increasing gender diversity at board level would be greatly beneficial for merit. Let me briefly comment on a couple of aspects:

  • In addition to valid and interesting research, as that from Credit Suisse and several more examples, selecting talented women for Non Executive Director positions is a phenomenal way to emphasise merit in the selection of Non Executive Directors.
    Even in countries like the US, or sectors as tech, which have considered “merit” as a driving compass in selecting people, the percentage of women on boards has barely moved past the 15% mark.
    Focusing on selecting more women can be purely revolutionary, as it will increase choices based on leadership competencies.
    Let me bring in the case of Italy. We have recently introduced a law, in essence requiring, since 12 August 2012, Italian listed or State-controlled companies to appoint a fifth (to become a third at the following mandate) of board members as part of the “under represented gender”. This law has been implemented earlier by a number of Italian corporates, during the Annual General Meeting season of 2012: exceptional women were selected. As shareholders were nudged by the law towards changing some board members, they realised they would be better off by selecting them on the basis of merit and competency;
  • Another great result was that overall corporate governance improved. As this law mandates for shareholders to change a number of board members, Italian companies have rightly taken it as a great opportunity to make better use of their Boards. Hence, some leading Italian global companies, such as Fiat Chrysler for example, implemented a smaller board, with a view to fostering its effectiveness.
  • As a final remark, let me repeat one of my mantras: exceptional female talent is ever more crucial, in one of those defining moments, as difficult as they are, where proper and effective use of talent and leadership can, and will make a difference for the better. More on this here: http://wp.me/p2mHJv-28 .

Tommaso Arenare
http://www.twitter.com/tommaso_arenare

Gigaom

In the mid-1950s, economist Harry M. Markowitz first described how investors could reduce their overall risk by filling their portfolio with securities that do not usually move in the same direction. As with all significant economic research, Markowitz (who was later awarded a Nobel prize in economics for his work in portfolio theory) proved mathematically what every good grandmother has known for centuries — don’t put all your eggs in one basket. Or, if you prefer to listen to your Sunday school teacher, take a look at what King Solomon, one of the richest men of his time, wrote in the book of Ecclesiastes, “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”

Now what does this have to do with your boardroom? Plenty, if you read the new report by the Credit Suisse Research Institute. The…

View original post 629 more words

In praise of effective leadership and CEOs who can cast off

Posted on by
Reply

A stimulating and thought-provoking piece of Andrew Hill in the Financial Times aims at discussing “Rules of engagement for leaders on holidays”.

I particularly favour his view that

CEOs who do succeed in casting off (…) will benefit not only from the holiday, but from the improvement in mutual trust with their senior team when they return.

Establishing and fostering mutual trust amongs senior team members is a crucial mark of distinction for a successful CEO and a capable leader. Taking a good couple of weeks off can actually do a lot of good to colleagues if the CEO succeeds in empowering them properly and making them feel so.

This needs to happen, however, during the CEO’s entire tenure. Building a sense of delegation within the CEO’s team is at the same time very critical and quintessentially distinctive of a great leader.

I would even go as far as to say that the ability to take a proper break and cast off successfully (including properly facing emergencies or surprises) is a great indicator of someone capable to delegate and perhaps even someone good at devising, in proper course, a successor.

In addition to building trust amongst team members, Hill also very properly points out, in order for a CEO to be able to take a proper break, they will also need to be well-informed, so as to face emergencies effectively. Selecting how they can be well-informed is another more general competency of a good CEO. It is always a fascinating experience to see how good CEOs succeed in accessing an effective selection of instruments to guarantee they are informed. In this respect, personal relationship with key influencers is always a great tool for great leaders to ensure they access relevant info at the relevan moment in time. In every CEO’s relevant information space, we want to rapidly identify people we like and we trust, also as crucial sources of information, even in case of emergency.

In summary, delegation and personal relationship are key to a CEO’s ability to be a great leader, as they are for the CEO’s own ability to take a restful, effective and fully satisfying vacation break.

Italy, #diverseboards and a reason for hope

Posted on by
1

It seemed just too difficult, too corageous and brave. A work of so many years. So many “no’s”, so many “it’s impossible”…

Finally, Italy did it and set a good example.

Italy’s law on gender diversity for Board of Directors of listed companies (Law n. 120/2011, dated 12 July 2011, the so-called “Golfo Mosca Law”), comes into force tomorrow, 12 August 2012.

Starting tomorrow, in essence, Italian listed or State controlled companies will need to appoint a fifth (to become a third at the following mandate) of board members as part of the “under represented gender”.

Even before tomorrow, this law has been implemented earlier by a number of Italian corporates, during the Annual General Meeting season of 2012: exceptional women were selected, overall corporate governance improved. Italian companies have rightly taken it as a great opportunity to make better use of their Boards, on the basis of more merit and competency-based selection.

I have separately described this as a great sign of good things coming and more to come.

Here, I want to take a moment to celebrate the coming into force of this law as a reason for hope.

With this, I celebrate the work of Lella Golfo and Alessia Mosca, two outstanding ladies whose own differences were turned into a joint strength. With them, I celebrate all the very many exceptional female leaders, whose talent is already making a difference for the better in Italy and in Europe.

Tommaso Arenare

www.twitter.com/tommaso_arenare

Hanging out together

Posted on by
1

In his now famous, perhaps historical, “the ECB is ready to do whatever it takes to preserve the euro” speech of President Draghi, there are a couple of additional points which deserve our consideration.

One is about progress:

“Progress has been extraordinary in the last six months. If you compare today the euro area member states with six months ago, you will see that the world is entirely different today, and for the better”.

Another one is about #moreEurope:

“The last summit was a real success because for the first time in many years, all the leaders of the 27 countries of Europe, including UK etc., said that the only way out of this present crisis is to have more Europe, not less Europe. A Europe that is founded on four building blocks: a fiscal union, a financial union, an economic union and a political union”.

Hence, President Draghi made his now famous statement, which deserves to be read in its full clarity:

“When people talk about the fragility of the euro and the increasing fragility of the euro, and perhaps the crisis of the euro, very often non-euro area member states or leaders, underestimate the amount of political capital that is being invested in the euro”.

“We think the euro is irreversible…But there is another message I want to tell you.

Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough”.

Let me now remind what Benjamin Franklin replied, when someone stated to him, in 1776, “We need to hang out together”.

“Yes, was his reply, we need to hang out together, otherwise we will hang out separately”.

Tommaso Arenare

Disrupting wisely

Posted on by
2

Disruption as a source of value in someone’s professional history has been the subject of a number of recent HBR posts, including one from Whitney Johnson and one from Claudio Fernández Aráoz, an undisputed thought leader on the subject of making #greatpeopledecisions.

Disruption requires the ability to create a disconnect, learn and benefit from it.

Creating a disconnect requires awareness, courage and empathy: it requires awareness of our feelings and fears, as we initially often fear disconnects,  while we like dealing with the same and again; it requires courage to recognise our fears and move on, temporarily leaving our comfort zone, so as to grow it over time; it also requires empathy so as to put ourselves into somebody else’s shoes, being able to share our thoughts, listening and learning.

Creating a disconnect requires unconventional wisdom, being able to pause and think, taking the time to find people who inspire us, connecting with them and sharing thoughts with them.

Disruption is listening, creating room for those we like, asking open questions, then keeping silent so as to absorb as much “open thinking” as possible.

Disruption is being as innovative and open as our ability to connect to people who can contribute, share their voice, and again inspire us.

Disruption is luck, being open to luck, knowing that luck will play its role and not fearing it. Disruption is dropping “career” for “choice” or, as Gianpiero Petriglieri puts it, creating your own “work of art”.

Disruption is knowing how to look for the next positive Black Swan, as good as the people we like. Disruption means dealing with Obliquity, or looking for our next move knowing in advance that the only thing we know is that we don’t know what’s next.

Disruption is finding satisfaction in people we work with, rather than in what we do.

Disruption is connecting wisely.

Tommaso Arenare

Snap judgements, the Savannah and that “reply” button we hit too quickly

Posted on by
1

This is about identifying and avoiding wrong judgements we make as a result of an unconscious bias, dating back to millennia ago.

Such as when we say…

How come I was so wrong in assessing him when we first met?

Or even:

I wish I had waited a bit longer before replying to that email…

These and similar questions and observations come across so very often, when I talk with people about mistakes we make when we interact with people, select them or react to them.

Humanity is thought to have taken its modern form some 200,000 years ago. Back then,  when we used to live in the Savannah, in small closely knit family groups, most of our key decisions where about a “Fight or Flight” dilemma, when we would face dangerous animals or other dangerous human beings and we had to decide, in as little time as possible, if the best way to save our life was to fight or flight away.

A snap judgement, as the word implies, is our habit to make a decision about people, or reacting to people, unconsciously, in a matter of very few seconds (I would better say milliseconds) after we meet with that someone or we face a situation we consider as a challenge. A snap judgement is a very precious and important habit, which we have developed over many millennia. Over time, though, it has become highly dangerous if we can’t identify and address it properly.

We can change this to our benefit.

Let’s remeber that our brain has largely remained the same, after millennia of evolution. It’s the same brain which helped our ancestors make the right “Fight or Flight” decisions.

Think about today, though: our immediate reaction to that bad email we’ve received, or to that difficult situation we had to face during a meeting, or many similar situations, they all bring our brain back to the Savannah and our fight for survival.

But now we know.

We know that’s exactly when we need to acknowledge our inner feeling of fear, pause and take the time to decide differently. This may require, for example, postponing our decision to the next day, or perhaps involving a friend or colleague we like in re-assessing the elements with us, before we decide.

All of this can be far better than a snap judgement.

Let’s think about it next time we make a judgement about someone we meet or when we decide how to respond to a challenge we face, or when we select leaders for our organisation, as well as when we choose friends or partners in our daily life.

Yet, we may just need some extra time.

That little extra time will result into us reacting more effectively to challenges or selecting better, more talented people, who complement us and bring the added value of difference and diversity, as well as the benefit of far greater personal satisfaction.

Tommaso Arenare