A lifetime achievement award has the thrill of a corporate Oscar—tinged with a slight sense of concern as a business obituary.
Nonetheless—having chaired these awards in the past, and seen previous winners—I receive this award with a mix of enormous gratitude and considerable humility. So, thank you very much.
In these turbulent times, the need for non-executives has never been greater. Having had the privilege of sitting on many boards, in good times and the not so good (of which there have been a few) I am often asked what I think makes for a good non-executive. So, I felt I would take this moment to share with you my top five.
First: Make sure you have the right motives when joining a board. The risk reward ratio is rarely favourable. The standard five principles of life: “What’s in it for me?”, must be outweighed by, “What can I contribute to it?”
To contribute you must have a genuine interest in the business, a desire to add value, a willingness to give advice, but the tolerance to be ignored.
And where you add value is critical: independent judgement on people; clarity of mind on risk management; vision for the future on strategy; focus on succession planning, and help in the day to day.
In summary, rule one, you need the skillset to contribute as an individual, but the mindset of a team player.
Rule two: Don’t confuse helping with meddling. This is one of the greatest challenges, particularly for those used to executive roles.
To help, you have to understand the business. Read the papers, visit the sites, engage with management, listening more than transmitting, thinking more than doing, advising more than telling.
So remember, board members challenge, advise, and encourage. Executives execute; non-executives execute the executive if they continually fail. Role confusion is dangerous for everyone.
Rule three: Have the humility to believe that others have something to offer and the patience to judge if you are right.
Weighing the evidence is vital, listening and learning. Rushing to judgement is risky, just as delay in acting on poor performance is dangerous. The best boards comprise individuals who are sure of themselves, but respect colleagues for their contribution; who are measured in forming opinions, but swift in implementing conclusions. A good principle—action this day—having slept on it overnight.
Rule four: Remember that you may have been hired for your experience but you will be valued most for your character.
As a chairman I look for those who are authentic in manner: who look to the mirror for judgement not the gallery for applause; who have the courage to speak truth to power and the resilience to be rebuffed.
Most importantly the integrity to know—whatever the pressure from shareholders, competitors, customers or peers—a board must do the right thing simply because it is the right thing to do.
Finally, rule five: Remember shareholders, employees, prospective employees and customers increasingly focus on how you make money, not simply how much money you make.
Honesty, integrity and diversity are the hallmarks of a good board. And diversity is not box ticking. It provides the healthiest environment for collective decision making, it is a combination of merit and gender. We have made good progress in the boardroom, it is work in progress in executive management, and we have a long way to go to see more women in the role of chair.
Let’s not forget this is not simply a gender issue, it’s about making business better. Plus respect for the environment, concern for all stakeholders.
These are not optional extras. They are at the heart of the business and the key to social acceptability. If capitalism is to thrive, the reputation of business must improve and in this, the role of the non-executive is key; how we conduct ourselves, present ourselves, govern ourselves and pay ourselves.
In short business and business leaders must be performance driven, value led. Being a non-executive is not simply a job, it is a privilege and vital if business is to be of value to society and valued by the community in which we live. Thank you.