This article is part of our special series on Authority

The authority of simplicity

ReD partners Martin Gronemann and Iago Storgaard in conversation with Maj Invest CEO and board member Jeppe Christiansen.

Iago Storgaard To start off, what is your assessment of where authority comes from today? 

Jeppe Christiansen At some point in our history, authority moved from being something that was exercised physically, to something in people's heads; in other words, knowledge became more important than strength. Now, I think we’re experiencing a new shift where how you communicate is of equal importance to what you communicate, a phenomenon that has been intensified by the digital media landscape but can be applied across all sorts of spaces. In the media universe, truth works completely differently today than before because, as we like to say, if a lie is repeated enough times, it becomes the truth.

Martin Gronemann As an investor, if you think about authority in the context of what guides decision-making, has there been also been a shift there? 

Jeppe Generally, there has been no change. I think in business, authority is still commanded as a leader through making well-reasoned, well-structured decisions based on facts and observations and so on. There are of course other things that you have to observe like moods and trends on social media so that's a factor you put into the machine. But the way you decide it is still the same. There is a small change in the stock market in the sense that the bubbles are bigger and more long-lasting than before, partly because more people have a seat at the table now.  

Iago So would you say the landscape of investing is more “democratised” now? 

Jeppe Yes, but I think it has nothing to do with democracy, because those who have the money are the people that still have the power. Democracy means everyone has a voice. A stock exchange will never be democratic because a stock exchange is controlled by those who have the most money, the most investable money. In reality, that's only 5% of the world. Take crypto, for example. Even there it's very few people who are actually in control and making money from it. 

I think in business, authority is still making well-reasoned, well-structured decisions based on facts and observations 

Martin As someone regularly speaking in boardrooms making economic and investment prognoses, how have you managed to retain authority? You mentioned earlier it’s not just about what you’re saying, but the how, or the medium of explanation. 

Jeppe I think it's about explaining things simply. And preferably with examples that are intuitively simple and easy to understand. If you look to who commands authority today it’s people who can deliver simple messages clearly, whether that’s a CEO defining a company’s core mission or politician outlining a future manifesto. They need to have a perspective, yes, and it will only cut through if the messaging resonates with what people are looking for in a way that they understand. It’s very funny, what I've experienced is when I give a presentation, whether it's to a board of directors or an executive board of a company, whoever it is, it's the same things that are the most important. They all need the same thing. I have yet to meet a business leader who has started investing who didn't say they are “long-term”. Everyone talks about being long-term, not just business leaders, but also politicians, but my experience is that it’s much harder to do in practice; long-term means that you can withstand the hard stuff, whereas often, I think leaders feel they have to do something immediately.  

Martin On that subject of long-term thinking, we’ve done many projects on kids, family and money – making good financial decisions is one of the most important skills for adults to learn. And yet we spend zero hours teaching this. Why don’t we integrate this into our education?  

Jeppe I think it's one of the most important subjects. How do you manage yourself financially? From paying bills to security to rent and housing and interest rates. The only reason why Denmark is a welfare state, is that we have two things that work: labour and capital. Everything we have is a result of labour and capital. We did something about labour when we got the primary school in 1800. We did something about capital when we got a financial system that allowed those who save to channel the money to those who invest. So, you can allocate capital efficiently to things that are deemed important. When you educate people, they can enter the workplace and create a product. So, capital and labour, i.e. public education and the money system, have created our society.   

Everyone talks about being long-term, not just business leaders, but also politicians… long-term means that you can withstand the hard stuff, whereas often, I think leaders feel they have to do something immediately.  

Iago I suppose this also links to what you mentioned earlier about messaging. Healthy societies, just like companies, are held together by simple, collective narratives. There’s certainly something about having a common understanding of where you have come from and where you are heading. That’s perhaps one thing challenging the US right now; by many measures it has the best economy and the strongest innovation, but equally it’s a society that is in many ways under pressure.  

Jeppe That’s very interesting. How has the US been successful? They have had gigantic success economically. They've said, we’ll make some really good schools and universities, then we’ll attract the best talent from all over the world. And then they say that we’ll make it hugely attractive to have risk capital. You get huge returns and good terms if you save and invest. So we get lots of risk capital in large amounts. But at the same time, without cohesion it can all fall apart. We know that in Europe. We've had regimes that have fallen for the same reason, because there were no cohesive kingdoms. Hundreds of years ago, 95% of people in Europe believed that the world was flat because religious doctrine told people it was. And then they found out that it wasn't. Now a lot of people believe it again. In one poll in the US, 10% of respondents said they believe the earth is flat while a further 9% were unsure. Those numbers speak for themselves. 

Martin This goes against Fukuyama’s – now much criticised – theory that we are always on a progressive arc, that knowledge always accumulates. Where do you see us on that curve? 

Jeppe I think we’re overloaded. Due to the levels of stress and complexity, all of a sudden you just give up and then you throw yourself over some semi-religious plateau. That's kind of what's happening on a collective level in the US right now, for many people. Having said all that, I think there will be a reaction. Not that social media will disappear, because it won't. But I think there's going to be a reclaiming of the importance of facts and science. There are scientists drilling 3,000 metres into the ice transforming how we think about our planet, and gut experts transforming how we think about our bodies – at some point I think there will be a re-recognition of how important this kind of work is. That gives me cause for hope. 

 This interview is part of our special series on Authority