Author: Dr. Geraldine Knatz, USC Sol Price School of Public Policy, USC Viterbi School of Engineering, University of Southern California
Port leadership is subject to a complex setting related to port governance, the socioeconomic environment, and the main goals of reconciling interest groups.
1. Leadership Challenges for Port Directors and Executive Staff
Port directors work in an environment that is complex and constantly changing. The chief executive of a port, whether the position is called Executive Director or CEO, sometimes both, juggles competing demands from customers, board members, stakeholders, staff, and in some cases, one or more overseeing governmental authorities. The role and functions of a port director and a port’s executive management team reflect the port’s governance structure. This section examines the role of a director at a public port (e.g. U.S. ports) or corporatized port which is still publicly owned but administered and operated by a corporate entity (e.g. Rotterdam, Dublin, Canadian and Australian ports). While there are other governance models, such as entirely private ports (e.g. United Kingdom) or publicly-listed ports with a majority of private corporate shareholders (e.g. Piraeus, Greece), executives of these organizations do not have the added complexity of being controlled fully or partially by government authorities.
One of the most significant differences between the CEO of a private corporation and a public port leader is that port authorities may be subject to significant political influence. The public ownership of the port property and the extent of government control make the port director position unique and differentiate it from a private sector CEO position. A desire to quickly make changes and get things done often butts up against the realities of the pace and process of government authority decision-making. While a port executive might share some common characteristics with a private sector CEO position, such as prestige and salary, the growing public awareness and participation in port activities, coupled with greater diversity among port board membership, has resulted in increased politicization of the port director’s position.
To ensure decisions about port assets and investment were market-driven without political influence, a move to privatize ports took off globally in the 1990s, after some initial actions by Great Britain and Malaysia in the 1980s. Touting the potential of improved efficiency and increased competitiveness, the World Bank published its Port Reform Took Kit in 2005 with a second edition in 2016. A corporatized port, purportedly, is one that can focus on commercial interests with the overriding public interest being served through the government assuming a regulatory role or dictating shareholder policies. But, the negative externalities of port expansion on local communities have led to the recognition that the government needs to maintain some modicum of control. Thus some efforts to corporatize ports, such as in Indonesia, have resulted in a hybrid situation where the government authority still appoints the director, and the board members are political appointments. During this reform period, some ports shifted from operating to landlord ports or were corporatized to a limited degree, with the government entity still retaining some control. The majority of the world’s ports are a hybrid combination of public and private control.
The intent here is not to elaborate on the merits of different models on port governance but to examine how the governance model affects the role of the chief executive. What characteristics of a public port authority make its chief executive different from their equivalent in other business enterprises?
- The public port director is typically a government employee. For example, the director of the Port of Long Beach, California, is an employee of the City of Long Beach. In contrast, the director of the Port of Baltimore, Maryland, is an employee of the Maryland State Department of Transportation. Depending on transparency laws where the port is located, the public port director’s salary may be a matter of public record.
- The director of a landlord port may have limited control over operations within the port. The director may not have a direct relationship with the dockworkers (i.e., no seat at the collective bargaining table between management and labor). This presents some interesting quandaries for port directors, especially during labor disputes which can shut down the port. In most cases, the public landlord port director has no authority to resolve labor disputes and only acts as a facilitator.
- The general public and media often do not distinguish between the “port” and its users, tenants, or customers, especially when there is bad news.
- Unlike the corporate world, where board members are generally appointed to a Board of Directors for their expertise in a given business field, the port Board of Directors may be political appointees or elected officials, typically with little or no background in ports. This presents an additional responsibility for the port director – educating the board members.
- The port director may have to wear multiple hats and serve multiple masters. For example, the Port of Los Angeles is a municipal enterprise. To the outside world, it is the Port of Los Angeles. To the City of Los Angeles, it is the Los Angeles Harbor Department, one of its three proprietary departments like the Water and Power Department and the Department of Airports. The California State Lands Commission serves as a watchdog over Los Angeles port spending to ensure that port revenues are consistent with the state grant that established the port in 1911.
- Decision-making can be laborious. The public port Board of Directors may not be empowered to make major decisions. For example, to effect an agreement of longer than three years and over a specific dollar threshold, it is necessary that the port director in Los Angeles seek approval from its Board of Directors, then from the City of Los Angeles Chief Administrative Officer, then from a committee of the Los Angeles City Council, then from the elected City Council. Unless the mayor’s office approves of the agreement or expenditure, this process does not even get started. Los Angeles probably represents one extreme as far as a bureaucratic decision-making process. Like the Port of Long Beach, other port boards are empowered to make a final decision and only require annual budget approval from its City Council. Regardless, decision-making by public port boards often has political connotations that require the executive team to balance competing interests and coordinate extensively with their overseeing government authority.
- Decision-making and investments may not be market-based but may be responsive to the local community or political influence.
- Port pricing may be a political versus a business proposition as port customers will lobby government authorities to keep rates low. Depending on how politicized the port is, its pricing may lag behind the market.
- A port that is not financially sustainable and must rely on tax assessments or voter-approved general-obligation bonds will have less independence in spending than a port that has the ability to issue revenue bonds. The ability to make longer-term investments that port customers want can be affected by this lack of autonomy in financing.
- Employees of a public port may be hired and fired in accordance with the policies of the governmental authority of which it is a part. However, some ports have the right to operate their own personnel departments.
The above list illustrates the types of challenges or limitations that a public port director may face. Depending on the specific structure of a corporatized port and the residual powers retained by the government authority, the director of a corporatized port may also experience some of the above challenges as well.
2. The Need for Alignment on the Port Mission
The ability for a port to undertake activities is related to its board composition, economic trends, ability to finance, and its relationship with its customers and stakeholders. The director and executive team must navigate competing interests to advance the port’s mission. Success in that venture necessitates alignment on the port’s mission between the port executive team, its Board of Directors, and, if applicable, the overseeing government authority. While this may sound like a straightforward concept, a lack of alignment with the port’s mission can lead to potential conflict.
The prevailing view for most of the twentieth century that ports were financially independent, politically insulated, and highly autonomous – no longer exists. It would be naïve in today’s world to assume the mission for a public port is only to move people and cargo, or even to move people and cargo in a sustainable manner. As the trend for more public participation took hold in the 1980s and 1990s, port boards became more diverse, and board members felt compelled to represent not only the interests of the port but also the community and underrepresented minority groups. Today port commissioners are often appointed or elected to serve a particular constituency. Board members may have campaigned for the position to remedy an ill they saw in the port or represent a specific constituency, such as organized labor or environmental interests. Or they may be focused on economic development opportunities for local businesses or visitor-serving activities. Board members have a loyalty to the constituency that elected them, the government authority that appointed them, or their neighbors in the community. Their personal agendas might conflict with the executive teams’ vision of the port’s mission.
In a 2020 study of board member appointees across 84 ports of multiple governance types in North America, South America, and Europe, only 21% of the board members specified qualifications. Nearly half of the board members appointed in these same ports represented specified organizations such as organized labor in the United States, where the public port model predominates. Only 4.3% of 23 ports surveyed listed board member qualifications. These qualifications were often related to holding a specific position within an agency that qualified them for a board seat.
A. Alignment Between the Port Executive Team and the Board Members
Most ports have published mission statements, while others provide mission, vision, and values or a complete copy of their strategic plan online. A strategic planning or a visioning process that helps create alignment among board members and the executive staff can be crucial to minimizing conflicts. A comprehensive process would also engage customers and stakeholders.
Alignment should be sought not just between the port director and the Board but among board members. A board with split philosophy on mission fundamentals presents a significant challenge for the director. In many cases, decisions represent a balancing act to address the needs of multiple constituencies because a port’s mission may be multi-faceted. Ensuring that the port’s mission, vision, and values reflect a broader constituency is not as challenging as implementing a diverse range of projects to satisfy multiple constituencies. A budget-setting process with board participation can be a tool used to prioritize investment.
Port mission statements evolve over time and may be updated as frequently as every few years. Often the turnover in port directors or board leadership will prompt a review of the mission. An update to the mission statement may also be triggered to reflect current business conditions and changing times. A port mission may focus on contributing to the economic development of the local economy and job creation (Maryland, U.S.). The port may view itself as a steward of a particular geographic region (Oakland, CA). The Port of Gladstone, Australia’s mission statement incorporates the principle of reducing social inequality, in their case, specifically to address the needs of indigenous peoples. Gladstone Ports Corporation in Queensland Australia, was one of the first ports to develop a Reconciliation Action Plan to raise the living standards of Aboriginal and Torres Strait Islanders. The importance of their relationship with the indigenous population is reflected in the mission statement: “facilitate the prosperity of others.”
|Port||Mission Statement||Governance Structure|
|Rotterdam, Netherlands||The Port of Rotterdam Authority creates economic and social value by working with customers and stakeholders to achieve sustainable growth in the world-class port.||Corporatized, publicly owned|
|Singapore||To develop and promote Singapore as a premier global hub port and an international maritime center, and to advance and safeguard Singapore’s strategic maritime interests.||Corporatized|
|Los Angeles, California||We deliver value to our customers by providing superior infrastructure and promoting efficient operations that maintain our essential role in the nation’s economy and transportation network as North America’s preferred gateway and a catalyst for job growth.||Public Port – local authority|
|Halifax, Canada||Be financially sustainable, operate in an environmentally responsible manner, and provide opportunities to employees for personal growth.||Corporatized|
|Maryland Port Administration, U.S.||Stimulate the flow of waterborne commerce through the State of Maryland in a manner that provides economic benefit to the citizens of the State.||Public Port – state authority|
|Oakland, California||We are stewards of public assets. We lead our seaport, airport, and commercial real estate businesses in a fiscally sound and socially beneficial way.||Public Port- local authority|
|Gladstone Ports Corporation, Australia||To responsibly manage, develop and facilitate the prosperity of others through operating our port facilities and services in an economically, environmentally, and socially sustainable manner.||Corporatized|
|Lazaro Cardenas. Mexico||Increase the productivity, competitiveness, and sustainability of the port, with world-class services and multimodal systems that serve the logistics and supply chains of goods, which converge in the Port System of Mexico and the Pacific Basin.||Corporatized and managed by API’s (Integrated Port Administrations) that receive concessions from the Mexican Ministry of Transportation and Transport|
|Port of Hamburg, Germany||Logistics center for the North of Germany and as such one of the supports for economic growth. Our job is to ensure maximum efficiency, safety, and economy in all areas of the port infrastructure.||Public Port- local authority|
The challenges of remaining competitive have caused many ports to consider expanding beyond their traditional roles. Landlord ports have begun to address shortcomings in the supply chain that affect their customers. Rather than being an observer of the supply chains, landlord ports are becoming supply chain participants to help boost performance through their port. This is evidenced by ports increasing their role in facilitating digitization to support the logistics needs of their customers and evolving into “smart” ports (Port of Hamburg, Germany). Reversing a global trend in governance, Jurong Port, a multi-purpose port in Singapore, had transitioned from a landlord port into an operating port. By developing “port-centric ecosystems” or clusters, they have successfully brought elements of the bulk cargo supply chain closer to their port to improve efficiency and competitiveness. One example is the construction materials supply chain, particularly cement. Jurong now operates the largest common user cement terminal in the world. While they have not published a mission statement, their website emphasizes their commitment to “extend seamless, integrated solutions for the most complex of projects and logistics operations.”
Some ports are expanding their mission beyond their traditional geographical boundaries through the development of inland ports and marine “highways” (marine “highways” revive underutilized navigable waterways for shipping goods). Beyond the potential competitive benefits of these actions, ports that move beyond their traditional geographical boundaries find they have increased the size of their constituency, which can often bring with it political, environmental, and financial implications.
Whether they be extreme weather or natural and anthropogenic disasters, disruptive events have resulted in many ports considering energy production as part of their mission. Ports are examining their dependence on external energy sources as part of their resiliency planning. While a decade or two ago, solar panels were just being considered for installation on port facilities, ports today are more active in the energy transition necessary to do their part to reduce the production of greenhouse gases. For example, the Port of Marseille, France, is preparing for energy independence and transition by initiating one of the first industrial-scale projects to convert excess green energy into hydrogen gas (Jupiter 1000 project).
Environmental management and sustainability are two additional concepts that figure into many port mission statements. Even if there is no direct link to the ports’ mission statement, many ports link their vision and values to one or more of the 17 United Nations Sustainable Development Goals.
B. Alignment of Port Mission with Customer and Stakeholder Goals
Even if the port executive team and board are in alignment on mission, port business customers typically expect that the port’s primary focus is on them and their business objectives. A port cannot be successful unless it recognizes the needs of its customers. Usually, the maritime industry is fully aware of the importance of addressing community and environmental concerns, especially if it puts the port board in a position to be able to advance capital projects in support of customer needs. Yet, port customers will be concerned if their terminal improvements are delayed because they perceived that the port placed a higher priority on the community over customer projects. The port executive team will find the need to achieve a balance that satisfies customer needs, protects their revenue sources, and maintains a positive relationship with the surrounding communities. Engagement with community stakeholders by port executives is necessary to understand community values. Residents near a large urban port may be concerned about air pollution and traffic. Smaller ports or ports in rural areas may serve a niche market that may be closely tied to the economic vitality of the surrounding community or provide a disproportionate share of jobs in the local community. In these cases, the local community may prioritize a port mission of providing jobs and supporting economic development.
Inherent in this balancing act is whether or not the port is financially self-sufficient or relies on taxes or subsidies paid by residents of the surrounding communities. Many ports like to tout that they do not rely on tax subsidies or, if the port has taxing authority, that it has not had to assess taxes, as a reflection of the prudent and successful management of the port by its current leadership. But some ports, like the ports of Seattle and Tacoma, do have the ability to assess taxes on surrounding residents. They also have elected commissions. Ports that rely on the ability to raise taxes from the general public or on general obligation bonds needing voter approval may have far less independence in their decision-making than ports that are financially self-sufficient.
Public ports in the United States have regular board meetings open to the public. Thirty-nine percent of U.S. public ports have their board meetings webcast. Or, board meetings may be memorialized by video and available on the port’s website. In Canada, ports have one open meeting per year called the annual meeting. European ports follow the private sector approach and are not open to the public. Based on a 2020 survey of 26 European ports, only 12% opened their board meetings by invitation. In Latin America, only 5% of the 21 ports surveyed have board meetings open to the public. So it is primarily in the United States and occasionally in Canada where the actions of the board members and the executive staff are on public display.
When conflict arises between a customer-oriented project and community values, or over environmental impacts of a proposed port action or development project, typically more of the general public will attend a board meeting, than port customers or industry associations. The business perspective can often be drowned out by a well-informed, organized, and even emotional display of community concern or opposition. Often, industry advocates will orchestrate attendees from labor organizations who benefit from the construction or operational jobs a port project might provide. Board members, whether appointed or elected, want to “look good” in public. They are often compelled to try and satisfy the speakers who come before them.
At the core of surviving public board meetings is a prior understanding of community issues and being prepared for opposition. A senior port executive tasked with the job of external affairs should have done sufficient outreach to all stakeholder groups to be prepared for the issues that will arise and be ready to respond to them. Board members need to be kept up to date and not blind-sided by public speakers. This is easier said than done because, at times, both port executives and board members are blind-sided by public comments about an issue they may have no knowledge of. Often, the only remedy is holding an item over to a later meeting so the port and board members can take the time to educate themselves about the issue.
3. The View from the Top: the Port Director Position
When in the 1960s, containerization drove a wave of port construction across the globe, it was not unusual to find that a port director might have held the top position for decades. Often the director had an engineering or construction background as the race was on to build modern facilities to attract customers as globalization took hold. Not surprisingly, all the port directors were male.
It was not until the 1970s that environmental and stakeholder concerns began to influence the activities of the ports after many countries adopted forms of environmental impact assessment legislation. Ports were suddenly faced with addressing impacts on the environment and building a relationship with community stakeholders. The ports did not adopt this philosophical change lightly as one can find statements made by port directors in the 1970s that a port’s purpose was to serve commerce, and create jobs, not mitigate for environmental impacts. Some port directors were better than others in making the transition from a “build it” perspective to one that gave validity to stakeholder concerns. Those that could not were retired and replaced by a new breed of port executive, better equipped to navigate the complex relationships necessary to succeed in the position. Port boards began to look for leadership that could implement change management in a historically conservative industry.
The educational background and work experience of today’s port director is diverse. Today’s port director is someone who may have come from within the port industry, hopscotching from smaller port to larger port, or have come from the shipping industry or another closely related field in the logistics business. Port boards have also looked outside the maritime industry to select a director. The director may have a background in information management, technology, science, engineering, law, or policy.
Concurrently with the rise of environmental consciousness in the 1970s, a woman was appointed to a port director position in the United States. Miriam E. Wolfe, the Port of San Francisco legal counsel, was appointed to its top post in 1970 and served in that role for five years. By then, San Francisco’ had already lost its significant position in cargo operations to the Port of Oakland, but Wolfe’s appointment was a significant breakthrough. In the U.S. in the late 1980s and 1990s, occasionally, a woman would be appointed a port director, usually at larger urban ports, where stakeholder concerns could become political issues, and governmental authorities sought the best person to diffuse them. Lillian Liburdi Borrone, the Port Commerce Department of the Port of New York/New Jersey, and Ann Alyward, Port of Boston, were two such pioneering women. (When the author of this Chapter was appointed Executive Director of the Port of Los Angeles in 2006, there were only two other women port Directors in the United States, San Francisco, and New Bedford, MA.) When women were selected for a port’s top job, they came from within the port industry or oversight agency in the port governance structure. In other words, they were a known commodity and had earned their stripes.
A 2020 survey of 23 of the largest seaports in the United States along all four coasts found only five female port directors, one on the Gulf Coast, one on the East Coast, one on the Great Lakes, and two on the West Coast. Canada has one female port director among the 17 ports corporatized under the Canada Marine Act of 1998. In Latin America, it was possible to identify the chief executives for seventeen of twenty-one ports surveyed, and two directors are female.
The background of appointed and elected board members also evolved from a traditionally legal or business background to boards of greater diversity. In the 1970’s it became common for an appointing authority to put one woman on a port board. In 2020, 28.3% of the U.S. port board members were female, with those boards ranging from 5 members to 14 positions. Only one port, Alabama State Ports Authority with a board of 9, has no female board members. Eleven of the U.S. ports have only one female board member. But seven ports have at least three female members. Canadian ports fare better than U.S. ports, with 44.8 percent female board members. In Latin America, board gender data was sought for 21 major ports, but not all published the names of board members or may even have port boards, especially at nationalized ports. Of the 11 ports where board members were identified, females held 27.4% of the seats.
Since the 1970’s when females were rarely found on port boards, the ports have made inroads in addressing the gender bias on board appointments, but less progress has been made for top leadership positions. Data for female seafarers indicates even less progress than at the ports. The International Maritime Organization maintains statistics on the number of women seafarers. Today only 2% of the world’s 1.5 million seafarers are women, and 94% of them work in the cruise industry. Recognizing the need to prepare women for leadership positions within the maritime industry, the IMO launched its Women in Maritime program in 1988 to help foster the training and recruitment of women in the maritime fields, including ports. Similarly, in 2013, the International Association of Ports and Harbors launched the Women’s Forum, providing scholarships to assist women in advancement within the port sector. Individual ports have also developed their own initiatives to increase diversity among their employee ranks.
Given the complexity and increased politicization of the port director position, it is not surprising that the length of tenure has been steadily declining. Although summary data is not available globally on port tenure, the American Association of Port Authorities examines tenure in an annual survey of its membership. The data for the past 12 years indicates a declining trend in position tenure.
In the case of American ports private-sector business and political appointees replaced engineers and attorneys in the director’s positions and leadership job tenures were shortened. Individuals with marketing and visionary thinking skills supplemented the ranks of the traditional port second-level technocrats. In all cases, the authority of the executive director was reduced in favor of the board of Directors. From 1987 to 2006, eighteen executive directors served at these four ports, none lasting longer than four years.
In Los Angeles, port directors had civil service protection beginning with the inception of the position in 1925 until 1977. During that period, several port directors held the position for decades. That protection was removed by Mayor Bradley and voters through a series of city charter amendments from 1977 to 1995 that restricted the power of the Los Angeles Harbor Board and shifted greater control over the port director to the Mayor’s office.
Today there is a growing trend to hire port directors from outside the port industry. As mentioned previously, the background for a port chief executive was historically skewed toward engineering. An engineer might promote from within to the top job, or be recruited from other engineering and construction-related industries, most frequently from the U.S. Army Corps of Engineers. Former Coast Guard officials or shipping executives often found their way to leadership positions at the port. Today the pathway to a port position is multi-disciplinary. With digitization and emphasis on “smart-ports,” it is not unusual to find someone with these qualifications coming from outside the port industry. The Port of Hamburg’s Director Jens Meier began his career in the software industry and has led the transition of Hamburg to the world’s most well-known Smart Port.
C. Survival Strategies for Port Directors: The Power Wheel
All positions of leadership rely on relationships. The public port director does not always rule from a position of authority depending on its governance structure. The director may face obstacles in achieving their vision for the organization. These might be political, bureaucratic, lack of resources, competing interests, stakeholder opposition, or something else. Any project or policy might need acceptance or approval by a multitude of individuals and organizations. To ensure that a leader’s focus is directed appropriately, a director may want to map the necessary relationships in a power wheel.
The power wheel is a graphic representation of relationships that the director needs to have with other organizations or individuals – where they exist and where they need to exist. The port director is at the center of the wheel, surrounded by all the constituencies where relationships need to be cultivated and maintained. Understanding which groups or individuals interact with each other, also represented on the graphic by lines between the groups, is a necessary step in creating a wheel. The exercise of drawing lines to identify those known or assumed relationships will clarify the influence of different organizations.
D. Collaboration and Training for Port Executives
Not all corporate executives can make the transition easily to a government-controlled agency. Regardless of how talent requirements in the technical and functional fields have evolved for port executives, leadership becomes the dominant trait for the senior executive. The director has to operate in a highly complex and political environment. This individual has to translate vision into reality and problems into opportunities. The director also has to select and forge a high-performance management team and do it to ensure the continuity of leadership. Moreover, the director needs to survive long enough to get something accomplished.
There are many opportunities for port directors and senior management who come from outside the industry to expose themselves to port industry issues and challenges. Interactions with other port executives is a primary way and can be facilitated by participation in the activities of a port association, like the American Association of Port Authorities (AAPA), the Japanese Port Association, the Europeans Sea Port Organization (ESPO), the APEC countries Port Services Network (APSN) and other regional associations. AAPA offers a week-long executive management seminar every two years frequently attended by port directors or other senior leadership. In addition, a port director can prepare his team for leadership advancement by participating in the AAPA four year Professional Port Manager (PPM) certification program. The same program is also offered in Spanish for Latin American ports. There are also private organizations and universities that offer training and/or certification programs for port executives.
It is not uncommon for port executives to independently seek out other port directors who share similar challenges to build relationships or to form loose collaboratives where the directors can come together for information exchange. For example, the Port of Hamburg initiated chainPort, a group of the world’s leading ports to meet periodically to debate and strategize on the optimization of the flow of information and goods. The port director at Venice, Italy, wrestling with issues of the cruise business and over-tourism, reached out to other ports that faced similar challenges to collaborate on possible solutions.
Probably one of the most valuable programs that are sufficiently intensive enough to delve deeply into the political issues faced by a public port executive is the three-week Senior Executives in State and Local Government Program at Harvard University Kennedy School of Government. A curated cohort of executives is chosen for participation, and the curriculum is focused on leadership, political strategy, policy development, performance management, and negotiation. While a port director may not be able to take three weeks away for training, it is an excellent opportunity for members of the port’s executive staff.
4. Board Relations
Relationships between members of the Board of Directors and the chief executive can be beneficial to achieving the mission. It is not uncommon for the director to have to deal with one or more board members who begin to stray from their policy setting and the fiduciary role and locate themselves in functions that are more appropriately within the purview of the director and staff. Board members tend to do this when they feel “out of the loop” or are caught off guard by the press or their associates about activities at the port. No board member wants to be stopped on the street and asked by a friend or colleague about something at the port and realize a community member knows more about a port issue than the board member does. This may prompt a director to go directly to the staff for information or to give direction. One mechanism for minimizing the desire of board members to circle around the chief executive is to ensure that board members get the information they need in a timely manner. Some port boards only meet once a month, but the board members are in the community on a daily basis.
Management needs to have a sense of what issues will rise to the level of board involvement, certainly of any that are community concerns or are likely to appear in the press. Not all board members will want the same level of information, and some board members will require more attention from the port director. Generally, a strong board chairperson can set the direction for interactions between board members and lower staff levels. Another strategy is the establishment of board committees that can meet and interact with staff on specified topics. Board committees may hold open or closed meetings, depending on how many board members are appointed to the committee and the board quorum for decision-making. In the United States, if the committee is sized at a number lower than a quorum for decision-making, board committees do not have to meet in public. Some committee meetings are thus more informal and allow for board members to interact with staff at various levels.
Board committees are usually of two types, standing committees or ad-hoc or special purpose committees. Finance and governance committees are examples of standing committees. Special committees are often established to deal with specific topics or projects and disband once progress is made. In a 2020 survey of 87 ports across North and South America and Europe, 42% of the ports identified board committees as part of their governance structure. The finance and/or audit committee was the most common standing committee.
5. Trends in C-Suite Composition
A survey of 35 ports across North America and Europe was made in 2020 to examine commonalities among the positions found within the C-suite, i.e., those senior executives that report directly to the port director/CEO. The survey also identified some unique positions that may have been found in only one or a few ports but might indicate future trends in port executive positions. Nearly all of the ports have some combination of the following positions reporting to the director/CEO: chief financial officer, chief operations officer, chief security officer, chief of marketing or customer relations, chief administration officer, or positions with similar titles that have the same types of responsibilities. Most ports have staff responsible for public relations, communications, stakeholder relations, or governmental affairs, but a few U.S. ports (17%) had elevated this position to reporting directly to the CEO. Similarly, a chief sustainability officer is becoming more common in the port organizational structure, but few report directly to the director/CEO.
The current emphasis on port digitalization is also being reflected in changes in the C-suite. More organizations now have chief information officers than ever before, and some of them have been elevated to the executive management team. Two ports (Hamburg, Germany, and Virginia, U.S.) have Chief Innovation Officer positions. Position duties go beyond the traditional information technology function and are more outwardly focused on customer and supply chain innovation.
One of the major trends visible within port organizations that is reflective of the business world, in general, is the elevation of the individual responsible for personnel or human resource functions. In the past, the personnel or human resource director was considered a “back of house’ function, as recruitment and onboarding of new staff was viewed as a somewhat routine process. Today’s CEOs recognize that qualified people are their most valuable asset, and the loss of qualified staff can have a detrimental effect on the organization’s performance. The value that talent can bring to an organization is now recognized as something that can give the port a competitive advantage well beyond the chief executive position but deep within the ranks of the organization. Therefore, the human resource manager’s job is no longer just hiring recruiting firms and processing paper but assuring that the organization finds and retains the best talent. Retention of talent is a major challenge for some organizations and the ones that do it well think strategically about facilitating the growth of their employee’s careers. Consistent with the change in duties to a more strategic role, we also see the position title is today rarely called “personnel” but more commonly called “human resources” manager. But a further evolution is seen in the expanded role of this individual with titles such as senior executive for Talent Solutions (Port of Charleston, South Carolina) and Chief People Officer (Port of Houston, Texas).
Joan McLeod, who has 42 years’ experience at the Port of Halifax, Canada recently put together a chart characterizing the changes in the role and responsibilities of the port’s Human Resources Director. She has witnessed a change not only in the functions of the human resources staff but also the expectations of employers and employees. “The HR function has moved away from processing paperwork to making sure innovative individuals are chosen and equipped to excel, and ensuring employees feel valued in the organization,” said MacLeod. “In the future, human resources will undoubtedly take on more of a talent management persona, focused more on performance and productivity. That’s going to require a total transformation in thinking.”
|Initiative||Forty to Fifty Years Ago||Twenty Years Ago||Now and the Future|
|Talent Development||Apprenticeships, hire for functional talent||Succession planning, internships and educational outreach, continuing education, hire functional expertise and sometimes maritime experience, use of headhunters, upsurge in outsourcing expertise||Strategic staffing, hire for expertise and excellent attitude and fit between individual and organization, outsource widely|
|Oversight and Communication||Punch clock oversight, structured, siloed work||Goal oriented with monitored technology and internet use||Encourage self-motivation, and use technology and social media as a vital tool across departments|
|Benefits||Traditional health and retirement benefits, built over time, with greater benefits for employees with families||Broader benefit choice||Offer more à la carte, personalized benefits, equalized benefit amounts not dependent on family size or structure|
|Performance Measurement and Analytics||Annual, subjective performance reviews||More frequent performance conversations, with focus on individual achievement, and stretch goals||Real-time performance conversations, credit for collaboration, and workforce measurements begin to include predictive analytics|
|Office Space||Designated office||Rise of the cell phone and app era, movement toward telework||More collaborative work space, and more telework, influenced by COVID-19 era|
|Career Ladder||Tenure and loyalty||Individuals move more from company to company to progress careers, and companies use more independent contracting||Move toward limited sometimes renewable contracts for senior seaport staff|
|HR Role||Hire, fire, paperwork, tough decisions||Guidance and counseling, goal-oriented HR||More strategic HR, keeping the human element, and grooming employees as ambassadors|
Of the 32 ports surveyed across North America and Europe, in nine ports, the human resources director reports directly to the port director/CEO. This reflects not only the view of personnel as a strategic position for talent management but also the repercussions of executives not being aware of personnel-related claims within their organization, particularly claims of discrimination or sexual harassment. A chief executive who may be unaware of personnel issues within his organization or worse, was aware but took no action, can be removed to make way for new leadership that will take such claims more seriously.
Inclusion, equity and diversity initiatives are changing the composition of the C-suite across the business sector and ports are no exception. For years, ports have had minority/women and disadvantaged business enterprise programs to ensure diversity in contracting and procurement. But ports are recognizing that more can be done beyond the programs geared toward port contractors and suppliers. For instance, the Port of Seattle has created a Senior Director of Equity, Diversity, and Inclusion with its own department directly reporting to the Executive Director. Ports should be prepared to examine their policies and programs through a new lens reflecting the complex political, social, and cultural environments they are part of.
- Chapter 3.1 Terminals and Terminal Operators
- Chapter 3.2 Terminal Concessions and Land Leases
- Chapter 4.2 Port Authorities
- Chapter 4.3 Port Coordination and Cooperation
- Brooks, M. and Pallis, T., (2012) Port Governance in Blackwell Companion to Maritime Economics, W. Talley, ed., John Wiley and Sons.
- Brooks, M, Knatz, G., Pallis, T. and Wilmsmeier, G., (2020) Transparency in Governance, PortReport No. 5. Available for download
- Brown, P.H. (2009) America’s Waterfront Revival: Port Authorities and Urban Redevelopment. Philadelphia: University of Pennsylvania Press.
- Knatz G. (2017). How competition is driving change in port governance, strategic decision-making and government policy in the United States, Research in Transportation Business & Management, 22, 67-77.
- Musser, L. (2020). The Right People at the Right Time, Workforce Initiatives That Help Align Ports’Needs with Skilled Candidates, Seaports, 57:10-14.
- Saragiotis, P and de Langen, P. 2017. Achieving Full and Effective Corporatization of Port Authorities, Reform Models from Global Experience. Trade and Competitiveness in Practice, World Bank Group. Available for download.
- Verhoeven, P. (2009) A review of port authority functions: towards a renaissance? Paper presented at the annual conference of the International Association of Maritime Economists (IAME), Copenhagen, June 24–6, 2009.