It’s been a tough week for Board Directors. A major corporate failure in the UK put remuneration and accountability firmly on the agenda; the extraordinary political rollercoaster in the UK and the US intensified; and the call for business and governments to step up with climate change became increasingly urgent.
Against this backdrop Fidelio hosted the 7th iteration of the “A Seat at the Table” Board development programme. We welcomed a diverse group of executive and non-executive directors from the UK, the US, Europe and Africa. Consistent with Fidelio’s purpose of building Boards fit for the future, this innovative two-day programme grappled with Board effectiveness in a disrupted world.
In this Table Talk we capture the structure and key themes.
1) Kicking off “A Seat at the Table” with a lively debate of shareholder versus stakeholder primacy, Gillian Karran-Cumberlege also explored effectiveness around the Boardroom table. This blend of highly topical content with feedback on delivery and communication characterised the two days.
2) With Denise Wilson, Chief Executive of the Hampton-Alexander Review, “A Seat at the Table” tackled the role of the Board in driving diversity and building an inclusive culture. Progress has been made; for example, in the UK there are now 700 additional women sitting on Boards today who weren’t in 2011. But to embed change it needs to be a business priority.
“We’ve got to be purposeful, we’ve got to treat diversity like any other business issue.”
– Denise Wilson, Chief Executive of the Hampton-Alexander Review
3) Ruth Cairnie, Chair of Babcock International, shared the journey from senior executive to Chair, including preparation for each transition and ongoing learning. This also provided an opportunity to review what are the key challenges currently facing Chairs of quoted companies. Ruth underscored the importance for the Chair to have time to reflect and think.
4) As Directors come under ever greater scrutiny, Professor Bob Garratt asked who is accountable for good governance? He stressed the need for government, regulators, investors and directors pull in the same direction, but also advocated that “every person is accountable for assuring their own best practice” and reiterated the critical importance of a learning Board.
5) When valuation slumps and a Board is perceived “not to be learning”, the opportunity is created for the activist to come in. Working through a current case study with Stephen Cheetham, Senior Consultant at Fidelio and former Senior Portfolio Manager at AllianceBernstein, “A Seat at the Table” participants worked through a critical check list for (i) responding to an activist investor and (ii) pre-empting activism through strong valuation and effective communication.
6) Indeed effectiveness as a Director is greatly enhanced through Presence, Authority, Influence and Networks, and Chris Heimann, Head of Improvisation at the Royal Academy of Dramatic Arts, enabled participants to enhance existing skills and add to their repertoire in both formal and informal Board situations.
7) A key function of the Board is to oversee risk, and David Jackson, former Company Secretary at BP plc, was able to share frameworks for understanding risk, as well as Board responses to crisis. This also created an opportunity for “A Seat at the Table” participants to think through effective induction programmes and due diligence for prospective Board Directors as they consider an appointment.
8) Without a doubt, cyber is a key risk on any register, and day two opened with a robust debate about reducing the technology deficit on the Board. Fidelio sees clear evidence of effective Boards seeking to increase the digital awareness with each new Board appointment.
“Technology is no longer a niche topic which can be constrained to its own agenda item and driven by specialists. Instead, leading boards now weave digital questions into almost every boardroom conversation.”
– Dr Stephen Page, portfolio Non-Executive Director, former worldwide MD of Accenture’s IT/digital capability and strategy business
9) Turning to another female Chair, Rachel Beagles, Chair of The Association of Investment Companies, looked to Investment Trusts and pointed to the diversification of their Boards, in terms of gender but also of experience – for example, adding digital marketing expertise.
10) And yet another female Chair, Lady Barbara Judge, Chair of Cifas and Astana Financial Services Authority, shared her perspective on establishing an international board portfolio that extends across sectors and geographies. Key lessons learned included establishing “your own personal Board of Directors” to provide a valuable sounding board.
11) Across our Board Evaluation assignments, Fidelio clearly sees the rise of ESG. With Susan Sternglass Noble, Non-Executive Director at Unity Trust Bank and former analyst and investor, we spoke both about what shareholders expect from the Boards of companies that they invest in and what effective shareholder engagement looks like on the part of the Board – including on governance and ESG issues.
12) This led seamlessly to the crescendo of climate change. Gillian Karran-Cumberlege and “A Seat at the Table” participants grappled with how this supreme business model risk can be contained within the Board agenda. Climate change is surely the major emergent risk facing business and society, but pathways for Directors begin to emerge:
- Chapter Zero provides Board directors with access to the information they need to have a meaningful Board conversation on this critical subject
- A Fidelio researcher brought the rallying call of the younger generation to “A Seat at the Table” and presented case studies of businesses that had identified business opportunity in reducing the carbon footprint
For further details regarding Board learning and development, please contact Amy Wright. The 8th iteration of “A Seat at the Table” will take place on 17th – 18th March 2020 at Hever Castle, Kent, UK.
To learn more about Fidelio’s approach to Board Evaluation and Search, please contact Gillian Karran-Cumberlege.