Mr Luc Lallemand, CEO of Infrabel
Developing “ethical leadership” in a public company
What does corporate governance mean to you?
It’s both simple and complex. For me, it’s a collection of regulations, rules, processes and behaviours that lead to a decision being made at any level in the company, resulting in concrete action being taken.
You were tasked with implementing this governance; how and by whom was this task given to you?
It didn’t come about explicitly. The governance process takes place through the overall strategic plan (known as “BRIO”, which stands for Belgian Railway Infrastructures Objectives) that Infrabel set up. It’s an activity with a “visible” character because I strongly believe that a main thread, a vision, is necessary, especially in a public company. In practice, it’s a plan – based on 23 priorities and several sub-projects – for centralising and modernising installations: there were 360 signal boxes at the start of 2004, when my task began; this number dropped to 31 by the end of 2012, representing the closure of 90% of the traffic management sites.
These industrial priorities influence the corporate culture and are one of the projects that form the basis of corporate and people governance. People governance is therefore part of a much wider set-up which is the evolution of the corporate culture, and Infrabel still has some way to go. There are also other projects out there: we could have grouped them together under the term “people governance” because this is exactly what they’re all about.
Two examples come to mind. The “Empowerment” project which aims to guide and support staff in their personal development and help them operate and react in their behavioural pattern more like entrepreneurs. Another idea involves making coaches available to management. In all cases, people governance has been specified as one piece of the jigsaw where the aim is for the corporate culture to evolve.
Drafting guidelines is one thing; but do you still need to ensure that they are applied?
This is an important question. For sure, you need to monitor the impact of the managers’ attitude on the behaviour of the people they look after. This is an area where some companies or public bodies have perhaps taken the wrong approach, especially in dialogue with unions. It was normal to think that once we had discussed wages, employment protection, safety gear, etc., everything had been covered. This is obviously not the case. We also need to look at, as a priority, behaviour and personal development in order to encourage the desire to work, and also motivation.
At Infrabel, we haven’t yet reached the stage of a document, apart from a summary text drafted internally with human resources experts, including Serge Hubert. We are currently working on an internal governance document and codes of conduct that are limited to statutory rules. However, a code of conduct should go much further. We’ve only got as far as a document currently being drafted. Then when it comes to its application, the Communication Department and myself will be in charge. The follow-up and internal communications are handled by Team Building and information sessions at Top 800.
In terms of governance, are there widely known differences between public and private companies?
Infrabel is a limited company in public law; each word here is significant. I’ll explain this using three levels. Firstly, the company: the texts relating to company codes serve as a basis for corporate governance not specific to a public company. The notion of “public law” itself implies a certain number of rules that apply in addition; they do not therefore compete with the government rules that apply to all companies. As an example, in the case of a public company, a government commissioner sits on the Board. This person does not play a role in decisions but does check compliance with the management contract between the Federal State and Infrabel in the case of a service provided to the public. He/she checks that the management contract is being carried out correctly. This model, subject to the law of 21 March 1991, is a feature of a Belgian public company.
Finally, the third level is that of internal governance and people governance. It relates to the way in which the internal organisation is set up under the effects of a body of rules, behaviours and values which will determine the decision-making process at the level of the Board of Directors, the management committee and management.
In practical terms, what is people governance in a public company such as Infrabel?
Today and bearing in mind what I’ve just said, people governance is the development of an ethical leadership, a very important notion that encourages and reinforces correct behaviour.
In respect of this, we advocate using nine values as a basis: sense of responsibility, integrity, commitment to the customer, striving for precision – vital when you’re managing the safety of 700 000 customers every day – team spirit (everything is becoming so complex that there is no longer a single person able to retain all of the knowledge or information. Team spirit is necessary for mobilising in a complementary way the entire body of knowledge), trust, open-mindedness, transparency and motivation. It’s worth pointing out that open-mindedness is specific to the rail sector. We have gone from a monopolistic company to the status of limited company. We operate in a sector that sometimes lacks openness to the outside world. As the opening-up phase takes place, we need to show our desire to draw inspiration from best practices, not only in the rail sector but also in the entire socio-economic world.
To sum up, we are currently focused on behaviour, ethical leadership, appropriate values and the human resources programme which enables the human element to incorporate key values at all decision levels.