A century of building institutions (2)
The true test of leadership is not whether things work while you are in office. It is whether they continue to work after you are gone.
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The true test of leadership is not whether things work while you are in office. It is whether they continue to work after you are gone.
A second lesson we learned is that governance often feels inconvenient before it proves its value.
One thing I have observed from working on infrastructure projects, energy projects, community partnerships and transformation initiatives is that everybody wants speed. Investors want speed. Customers want speed. Project teams want speed. Communities want answers. The government wants results. Everyone wants things to move faster.
And many of the most difficult moments we have experienced happened precisely when governance forced us to slow down.
There have been projects where timelines were slipping, costs were increasing, and stakeholders were becoming impatient. Teams were under tremendous pressure to move forward. Yet governance required additional consultations, additional stakeholder engagement, additional reviews, and more scrutiny.
At those moments, governance may feel like an obstacle. People begin asking why another review is needed. Why more consultation is necessary. Why decisions cannot simply be made.
But over time, we learned something important. Almost every major crisis begins with someone saying, “Let’s skip this step.” “Let’s solve that later.” “Let’s make an exception.” And very often those shortcuts become expensive in the long run.
What begins as an attempt to save time can become a legal issue, a community issue, a regulatory issue, or a reputational issue. The cost of fixing a bad decision is usually far greater than the cost of making a careful one.
That is why one lesson we remind ourselves of repeatedly is this: Sometimes governance slows action, but it actually speeds up outcomes. What feels like a delay today may in reality prevent a crisis tomorrow.
We see this in the power sector. Building a power facility is not simply a matter of engineering and construction. Before a single shovel touches the ground, developers must secure permits from dozens of agencies, obtain hundreds of approvals and signatures, comply with numerous laws, and engage stakeholders every step of the way.
It is easy to look at that process and think, “This is taking too long.” But imagine the alternative. Imagine building first and addressing environmental concerns, community issues, or regulatory requirements later. What appears to be a delay today could become a legal battle, a community dispute, or a reputational crisis tomorrow.
That is why governance matters. It may slow decisions in the short term, but it accelerates sustainable outcomes in the long term.
A third lesson emerged during our own transformation journey.
A few years ago, Aboitiz made the strategic decision to become the country’s first techglomerate. Like many organizations embarking on digital transformation, we initially assumed that technology would be our biggest challenge.
What we discovered was something quite different. Technology was not the hardest part. Governance was one of our bigger challenges.
As new technologies emerged and business units pushed for faster innovation, the pressure to move quickly became intense. Everyone wanted solutions. Everyone wanted speed. Everyone wanted results. Yet many of the challenges we encountered were not technology failures. They were governance challenges.
Questions around data ownership. Questions around cybersecurity. Questions around accountability. Questions around decision rights. Questions around how risks would be managed and who would ultimately be responsible for decisions. These questions were so important especially since we were already operating under a new business model, one of federation where our business units were given autonomy to operate independently of the parent company.
We learned that technology transformation without governance creates bigger problems later. Poor data quality, cybersecurity vulnerabilities, compliance risks, failed adoption, costly rework and loss of trust can all result when governance does not keep pace with innovation. Technology did not eliminate the need for governance. If anything, it increased the need for governance.
And I suspect many of your municipalities will encounter similar challenges in the years ahead as digitalization, artificial intelligence, smart city initiatives, and technology-enabled public services become more common.
Technology can accelerate progress. But technology cannot compensate for weak governance. In many cases, it simply exposes weaknesses that already exist. So pay attention to that.
Let me now connect governance to something that I know many of you care deeply about: economic development.
Whenever I meet local government leaders, the conversation often turns to attracting investments, creating jobs, and generating economic opportunities. These are among the most important responsibilities of local leadership.
Many people assume that companies choose where to invest primarily because of incentives. Of course, incentives matter. Infrastructure matters. Market opportunities matter.
Let me share what we have learned in the private sector.
One reason Aboitiz has been able to attract and build partnerships with respected global institutions such as JERA, Citi, Global Infrastructure Partners, Coca-Cola Europacific Partners, and many others is not simply because of business opportunities. These organizations can partner with companies all over the world. What they are evaluating is not only the opportunity. They are evaluating the quality of the institution itself.
They want to understand how decisions are made. They want to understand how risks are managed. They want confidence that commitments will be honored. They want confidence that leadership transitions will not fundamentally change the rules of engagement. They want confidence that there is transparency, accountability, and predictability.
In many ways, governance becomes a competitive advantage. It lowers uncertainty. It strengthens trust and confidence. And it makes partnership possible.
I often say that good governance does not guarantee success. But poor governance makes long-term success very difficult. The same principle applies to municipalities. Investors may be attracted by incentives, but they stay because they trust the institution. They stay because the rules are predictable. They stay because commitments are honored. They stay because they know that even when leadership changes, the municipality remains reliable.
That is governance in practice.
So let me leave you with the three lessons that have stayed with me from our experience at Aboitiz, and which I hope might be useful in your own leadership journey.
Lesson 1
Build institutions, not personalities. One of the reasons Aboitiz has survived and evolved for more than one hundred years is because successive generations made a conscious decision to build systems that were stronger than any individual leader. As mayors, you will be remembered for the projects you build, but your lasting legacy will be the institutions you strengthen. The true test of leadership is not whether things work while you are in office. It is whether they continue to work after you are gone.
Lesson 2
Governance is not compliance; it is a better decision-making system. In the private sector, we have learned repeatedly that governance often feels inconvenient. It slows us down, asks difficult questions, and forces us to examine risks that we would rather ignore. Yet when we look back at our most difficult challenges, we often realize that governance was not the obstacle. It was the safeguard. Good governance helps protect the future from the pressures of the present. It helps leaders make decisions that are not only fast, but also fair, sustainable and responsible.
Lesson 3
Governance is a competitive advantage that attracts trust, investment, and partnerships. Over the years, Aboitiz has been able to attract world-class partners such as JERA, Citi, Global Infrastructure Partners, Coca-Cola Europacific Partners, and many others. Those partnerships were not built on opportunity alone. They were built on confidence. Confidence in our systems. Confidence in our decision-making. Confidence that commitments would be honored. The same principle applies to your municipalities. Investors may be attracted by incentives, but they stay because they trust the institution. In a world where uncertainty is increasing, predictability and credibility have become powerful assets.
So if there is one thing I hope you remember from our conversation today, it is that governance is ultimately about building institutions that can solve problems consistently, earn trust through performance, and create value long after any individual leader has moved on.
After more than 100 years, one thing the Aboitiz Group has learned is that institutions are built one decision at a time. Not one project at a time. Not one leader at a time. One decision at a time.
Governance is not a document. It is not a committee. It is not a policy manual sitting on a shelf. Governance is the discipline of making good decisions repeatedly, especially when it would be easier not to.
The Philippines does not lack talent. It does not lack ideas. It does not lack opportunity. What we need are stronger institutions. Institutions that can execute consistently over time. Institutions that can survive leadership transitions. Institutions that can earn trust because they are accountable for the results they deliver. Institutions that can solve problems long after their leaders have moved on. Institutions that people can trust.
Ultimately, that is what governance is about.
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