Recent Blogs
What’s your favourite part of being a non-executive director?
I’m going to take a wild guess here, that the least favourite part of a typical NED role is setting executive remuneration. To the media, and now even the government, it appears that NEDs love nothing more than awarding large pay increases, bonuses and pay-offs...
New PM, but corporate governance is still a political punchbag
“I want to see changes in the way that big business is governed. The people who run big businesses are supposed to be accountable to outsiders, to non-executive directors who are supposed to ask the difficult questions, think about the long-term and defend the...
Someone getting emotional?
People are only human. Occasionally they fall in love with other people. Ideally, the ‘other person’ works elsewhere, but sometimes the two work together. Many executives will have come across co-workers, who are in a relationship. This knowledge can vary from being a...
Is management telling the whole story?
The company was in financial difficulties, as changing market conditions had seriously exposed the misplaced strategy. There was however no suggestion that anything improper had gone on. The external auditors were high quality, and there was a competent internal audit...
Just say ‘No’ – assessing an offer for your company
In previous articles, I covered how a board should react to an unsolicited approach or offer for the company, how it would value it, valuing shares versus cash offers, whether it’s friendly, unfriendly or hostile, and irrevocable commitments. Here, I am going to look...
An unsolicited approach: Let battle commence
My earlier article talked about how a board should respond to an unsolicited approach for the company. This looked at a straight-forward offer that the board has to review and accept or reject. However it’s not always so easy, as much depends on the attitude and...
What if you get an unsolicited approach for the company?
I was having a good day, sitting in my office sorting a few things out. Then, late afternoon, the phone rang. It was the Chairman of one of our competitors. I hadn’t spoken to him before, but this was no comfort, as he revealed that they were about to make an offer...
What are pre-emption rights and why do they matter?
The board is contemplating an equity raise. The brokers and CFO talk in respectful terms about preserving pre-emption rights and what this means for how they raise the new capital. Maybe you, as a new non-exec, are sitting there wondering what is this all about and...
What’s all the fuss about cash?
Companies differ very much in their attitude to the importance of cash. If a business is private equity owned, highly geared (ie has a lot of debt) or has not a lot of headroom against its overdraft or debt covenants, it is likely to be very focussed on cash. Others,...
What if you join a board, but have no financial experience?
One mistake that non-financial people often make is to assume that financial people both know what they are talking about and understand all the financial issues. Once you realise that neither of these may be true, you will feel less cowed by financial jargon and able...
Dodgy statistics and wild claims just patronise women
Grant Thornton has just published a Report comparing the effect on corporate return on assets (ROA) of having women on an executive board across three countries (UK, US and India). It concludes that such diverse boards cause companies to perform “Materially better”....
Why you might want a pilot running your Risk Committee
There’s a saying in aviation: ‘Never fly in the same cockpit with someone braver than you’. Risk management for a pilot is literally a matter of life and death. Have you ever asked yourself whether you would share a boardroom table with executives braver than you are?...
Why you wouldn’t want a CEO piloting an airliner
The popular image of a pilot is of a dashing hero, who pulls off amazing feats of skill to save his aircraft from imminent disaster. However, in reality, what airlines value most in pilots is keeping to procedures and operating according to checklists, acting with...
Why aviation is safer than the boardroom
The basic model of commercial aviation is a thin tube of highly pressurised metal being propelled at 600 miles per hour by inflammable fuel at 35,000 feet in all weathers at temperatures of -57 degrees. So have you ever wondered how aviation got to be one of the...
Why do we have corporate governance regulation?
What drives corporate governance regulation? Is it media focus, political pressure, or a need to ’do something’? Or is it sound analysis leading to thoughtful prescriptions? I suspect that pretty much everyone accepts that the answer is somewhere in the former list....
C. How to assess an NED job offer
You’ve done your due diligence, you’re happy with the company and you’ve received a Letter of Appointment to become an NED. After a modest (it is only a non- exec after all) celebration, sit down and look carefully at what’s in the detail of the Offer before you...
B. How to choose your first NED role
I gave a nervous laugh. The headhunter had just suggested that I could start my non-executive career by joining Northern Rock. Why would I want to join the board of a bank suffering a run, the first British bank for over a hundred years to experience one? NED...
A. Your first NED interview
I’ve sat through many NED interviews, on both sides of the table, learning a lot about how they work and how to conduct them. I have not yet discovered the secret to identifying the ideal NED director nor to getting selected myself every time. Here are a few notes,...
Your first 100 days as an NED
Induction Programme You should have some form of induction programme. However, rather than leave it to the Company Secretary, it will be a better and more comprehensive one if you take control of it. Unless you’ve already met them in your induction programme, you...
‘Not missiles, but microbes’ – Why didn’t we see it coming?
Famously, in 2008, the Queen asked economists why no-one saw the great financial crisis coming, not least as they were giving her a full retrospective inquest into why it happened1. She might well ask the same question again now about the COVID-19 pandemic. Of course,...
Brydon’s curate’s egg
Right Reverend Host: “I’m afraid you’ve got a bad Egg, Mr Jones!” The Curate: “Oh no, my Lord, I assure you! Parts of it are excellent!” A ‘curate’s egg’ was originally something that is described as having good parts purely out of politeness, but nowadays, is...