New Year, New Boardroom: Three Must-Reads for 2018
In 2017, Fidelio had the privilege and opportunity to work with Boards and support Chairmen internationally from the UK to the US, across continental Europe and in major markets including India, Russia and China.
Fidelio’s clear focus is building highly effective Boards through Search, Development and Evaluation. These are our three key takeaways for 2018:
Since the Financial Crisis, the role of the Chair has evolved significantly. Over the last 10 years demands of the Chair have increased dramatically, in particular for quoted companies, and governance has become more complex. Recent corporate governance proposals across a number jurisdictions mandate the Board and the Chairman to oversee the culture of the company with a focus on delivering long-term sustainable success.
While no Chair would disagree with the importance of a good culture, the tools and means available to the Board to achieve this are far from clear. The increased focus on the Chair has consequences. A decade ago, a corporate crisis would frequently herald the departure of the CEO. Today, the Chair is also likely to depart, albeit the departures will be staggered.
As a result we see even highly experienced Chairs seeking support in building and developing their Boards and also in ensuring that the Chair is receiving the support he or she needs in this critical role. Reflecting this, Fidelio’s next Board breakfast will discuss “Effective Chairmen, Effective Board” with David Jackson, Company Secretary, BP plc as our keynote speaker.
Christmas is a season not only of rejoicing but of reflection.
Sir Winston Churchill
Without a doubt the speed of disruption and change continues to pick up. Technology threatens business models; regulation challenges business practices; and anti-globalisation threatens market access.
While Boards are being held increasingly accountable for the long-term success, value and culture of the company, they also have to ensure that the organisation can deal with today’s disruption and challenge. This needs different skillsets, including in the Boardroom, which are aligned to tomorrow’s opportunities, as well as today’s preoccupations.
This is leading to radical thinking about Board composition. We see a number of Chairmen shifting their approach from one-off, transactional Board appointments to medium-term succession planning which frequently involves creating a broader eco-system of talented executives and directors who not only bring relevant skills from within the sector but critically also from beyond the sector. Some may well become future Non-Executive Directors. Others may lend advice and perspective in a number of ways – formal and informal.
Fidelio’s focus in Board Search is ensuring Boards fit for tomorrow. Our ability to work cross-border, cross-sector, cross-function is proven, critical to our success and increasingly valued.
Against this backdrop, the case for diversity becomes incontrovertible. This is a key element of ensuring that Boards are fit for the future. A major risk to any business is ‘group think’; the best antidote to ‘group think’ is ensuring different perspectives and experience around the Boardroom table.
Diversity includes gender balance. In most jurisdictions, Boards face clear and well publicised targets to increase the number of women on Boards. The indignation at the gender pay gap and outrage at apparently institutionalised sexual harassment has reinforced the case for greater female representation on all Boards, regardless of sector, purpose or geography.
With greater gender diversity opening up new routes to the Boardroom, companies are better able to attract diverse talent in its broadest, most compelling and inclusive sense. This clearly extends across age, ethnicity and sexual identity, as well as experience and profile.
How better to understand critical customer and stakeholder groups, and to achieve the rigour and diversity of thought essential for survival in today’s turbulent world?
Fidelio has seen clear evidence of Boards embracing a much greater degree of diversity in 2017. This is a predominant theme in our Board Search assignments, as well as Evaluation.
Additionally on Fidelio’s “A Seat at the Table” programme for senior female executives and directors, we have been delighted to welcome women internationally from the FTSE, the DAX and Fortune 500 companies, extending to Russia and Africa – with a broad range of sectors represented. Moreover, looking ahead to 2018 we will be collaborating with a leading Chair to support BAME representation at the top table – reinforcing the diversity and richness of the “A Seat at the Table” Alumni network further.
For organizations to survive, their rate of learning has to be equal to, or greater than, the rate of change in their environment.
Professor Bob Garratt, Senior Consultant, Fidelio; Visiting Professor, Cass Business School
Conclusion – Boards Fit for the Future
As such the entire team at Fidelio would like to take this opportunity to wish our friends and clients a very peaceful and happy Christmas and a healthy and prosperous New Year.