Decomposed

We were twelve in number – six executives and six non-executives – and we had spent the last five hours in a spacious conference room in Vauxhall, on a hot and humid June afternoon, discussing aspects of the company’s strategy for the next three years.  As the meeting came to an end, and the prospect of dinner together at a nearby Eritrean restaurant came into view, as Chair of the meeting, I brought the formal proceedings to a close.  “Let’s take a few minutes”, I said, “before we leave for our meal, to decompose”.   My words provoked some amusement among my colleagues: “Do you mean decompress?”  “Do you want us to turn to compost?”  On the contrary, I had meant exactly what I had said.  At the start of a Board meeting, each attendee should compose themselves, making ready to come together as a group to do the difficult work of governance; at the end of the meeting, each should feel free to decompose, to return to their constituent self, and allow time for individual relaxation and rest. 

“What do you do at Board meetings,” one of my friends asked me recently, “apart from eating sandwiches?”  In the boardroom, as elsewhere, there is no such thing as a free lunch.  Governance is a specialised form of work, and to do it well takes lengthy preparation time, high levels of concentration, the employment of good listening and discursive skills, and the ability and willingness to develop collective recommendations in a constructive and collegiate manner.  This is not easy work and should be undertaken with the serious and responsible mindset that the task demands.  The Board is ultimately responsible – legally and morally – for the oversight of the company, the effective deployment of the resources at its disposal, and for securing the interests of various groups of stakeholders, including investors, staff, customers, suppliers, and the wider community.  Good Board meetings require all participants to come to the table primed and prepared to do this work. 

I am currently the Chair of two company Boards and have previously been Chair (or deputy Chair) at several others.  One of the hardest aspects of this role is the ability to engender the appropriate level of composure at meetings.  Too much direction and involvement from the Chair allows other members the opportunity to switch-off, to absent themselves from the discussion, and the conversation loses the plurality of voice that is essential for good decision making.  Too little direction and leadership from the Chair, and the discussion tends to wander and lose focus, as the dominant preoccupations of those with the loudest voices hold sway.  The optimum outcome is a state of balance, in which all views are heard and reflected upon, and from out of this mixture the best available decision emerges, by a process of incremental adjustment and refinement.  Optimum outcomes sometimes happen, but not frequently enough.  A well chaired meeting is easier to describe in theory than to put into practical effect.  Too often, I admit, the meetings I chair generate sub-optimal outcomes. 

Some analogies might help here.

A company Board is usually bigger than a string quartet, but smaller than a full orchestra, so think instead of a small chamber ensemble.  In musical groups of this size, each instrument plays a significant part in achieving a balanced sound and the conductor’s role is to maintain a good tempo and to ensure that none of the instruments dominate the others.  Each player must remain alert to the pacing and volume of all the other musicians, aware of how their own playing will impact on the wider ensemble, and ready to respond to the performances of their colleagues.  The conductor, like a good Chair, should draw in the contribution of all, to form a coherent and vital sound, blended from the various individual contributions.  The best small orchestral performances are all about the musicians, not the conductor. 

Or consider a well devised menu.  Recently, when Peter was in London, we had dinner together at a well-regarded neighbourhood restaurant, which serves a nine-course tasting menu.  Each of the dishes was small, with a pleasing variety of flavours and textures, building into a satisfying meal in which all the courses contributed to the overall dining experience, without any of them dominating.  In this case the chef, who puts together the menu, is the person responsible for making sure that the diverse ingredients balance together, in each of the dishes and in the meal overall.  The best chefs draw the diners’ attention to the quality of the food rather than the cleverness of the kitchen staff. 

As a third illustration, think of a rowing race – the annual Oxford v Cambridge Boar Race at Putney, for example – where eight tall strong men or women, each of comparable build, sit together in a row, all pulling their oars as hard as they can, in the rhythm set by the lead-oar (or stroke).  The boat is guided by the coxswain, the only one of the team who faces downstream, who provides encouragement and direction to the rowers.  If a company Board is full of similar sorts of people, all saying and thinking the same things at the same time, and if the Chair is like a coxswain, shouting instruction but doing no other work, then company governance will be hopeless and ineffective. 

Boards are successful when their membership comprises a good variety of different elements.  Just as a music ensemble will include a mix of strings, wind, brass, and percussive instruments, and just as a balanced meal will include proteins, carbohydrates, sugars, and fats, so too a Board needs a wide mix of ingredients.  The role of the Chair is to make sure that these elements come together in the right proportion, in the right order, with the right balance, and at the right moment, to achieve the desired effect.  By contrast, the only lesson to draw from the analogy with competitive rowing is that Board work is hard work, and at the end of a meeting the Board members’ brains should ache just as much as rowers’ muscles do at the end of a race.  Which is why, at the start of each meeting, it matters that Board members compose themselves, ready for the work which is at hand.  And why, at the end of each meeting, some time to decompose should be necessary. 

Although governance is work, in the UK many charities expect their trustees to fulfil their responsibilities without being paid.  Historically, this convention seems to have arisen to ensure that the full value of the resources allocated to the charity’s work were directed to support the stated beneficiaries, rather than trustees raising funds for charitable purposes, and then keeping all the money for themselves.  It is easy to see why a prohibition on paying trustees might have developed to reduce the likelihood of fraud or malfeasance.  However, the consequence today is that trustees (that is, Board members of companies that are registered as charities) generally work for free, which has two important disadvantages.

First, it is hard to sack a trustee, or at least persuade them to step down when their term of office is up for renewal, even though they are not doing a good job, if they are not being paid.  When company directors are paid – and have contracts of employment or contracts for service – it is far easier to remove them if they are ineffective, or unreliable, or fail to fulfil their responsibilities in some way.  Their work on the Board is more readily subject to regular review and to performance management when required.  When trustees work for free, however, it is difficult to tell them that it is time they moved on, regardless of how poor their performance, because it is hard to be critical of work that is of no value, when no corresponding value has been offered to them in exchange. 

Second, when trustees are expected to give up their time for free, charities tend to find their Boards full of similar sorts of people: a mix of those who are retired, who have plenty of free time, and those who are wealthy, who do not need to be paid for their time.  Finding a diverse group of trustees, who are expected to dedicate time to the work, but who are offered no remuneration in return, is difficult.  There are many people who could make a positive and distinctive contribution to a charity Board, but who are not able to give their time for free because of competing demands.  If trustee work was paid, the pool of potential trustees would be larger and – importantly – much more diverse.  It is not surprising, therefore, that many UK charities are poorly run, with Boards full of older, wealthier people who, despite being well-intentioned, do not have the skills necessary to run an effective company. 

There’s an old saying that advice is worth what you pay for it, which, in my experience, is highly applicable to the challenging work of governance.