Setting up boards for success
Now more than ever, a strong board is crucial to a company’s long-term success. The composition will change and evolve as a company grows, but talent and culture will be a real source of competitive advantage particularly in a post-pandemic environment.
Cordelia Dolan develops the Inflexion network of business leaders and works with portfolio companies to ensure that they are set up for success with high performing leadership teams aligned to the business plan.
Bertrand Sciard, Serial Chair, Chair of Alcumus
Bertrand Sciard was appointed as Chair of the Board of Inflexion-backed risk management specialist Alcumus in Q1 2020, shortly before the pandemic hit Europe. That he was a Paris-based professional joining a Cardiff-based business meant meeting in-person – crucial for a CEO/Chair relationship – would become very difficult just a few months later owing to travel restrictions, but Bertrand was adamant they had to connect.
“I couldn’t take on role before meeting the CEO because it’s all about chemistry.”
They sparked and have been working together successfully for the last 18 months as Alcumus embarks on its continued technology enabled transformation and internationalisation. This is the strategic shift that brought Alcumus to Bertrand.
Look to the future
“Initially when they approached me I said no, as it was a services business and I’m a software man. They explained it’s precisely why they wanted me to join, because they were looking to transform into the area I knew.”
And this is exactly how Boards should be – agile and comprised of people expert in where the company is going, rather than where it’s been. This is an important nuance when embracing change. “They needed to reinvent themselves to move away from an outdated strategy and be seen more as tech and software driven.”
The pandemic has turbo-charged strategy evolution which in turn has ecessitated diversity of thought and leadership experience. “You need vision and strategy for the next three years; beyond that is a dream. Then you need some key initiatives so that you can execute, and this can mean a new leader who is capable of challenging the team.” For example Bertrand came in to support the evolution of Alcumus from a services to software company with a new KPI based on ARR (annual recurring revenue).
Efficient board packs
Bringing diversity of thought and fresh expertise has the benefit of challenging perspectives in other areas too; for example Bertrand has changed board communication and upgraded Board packs to focus on the future. “When I joined, management were reporting to the Board on what had happened in the past. While it’s important to know, it’s impossible
to change and so it’s better to focus on the coming months and year ahead.” He’s also inspired a reorganisation in the UK, shifting teams from a product focus to being organised by customer size and need, meaning now Alcumus has an SME team and an enterprise team.
His top tips for boards:
- The Chair is a gatekeeper who must filter I need to ensure management aren’t asked to do things which are unnecessary just so shareholders can fill in spreadsheets.
- The right team is key, since there is no good or bad strategy, just good or bad execution. As soon as you start revisiting strategy you need to find the right jockey for the You may have been trotting and now you want to gallop.
- Keep meetings efficient. People have become incredibly efficient with virtual meetings and there is no need for that to But hybrid meetings, with some together and others on-screen, are ineffective as the ones not physically present become marginalised.
- Communicating is crucial. Bertrand has weekly calls with the CEO, fortnightly with Inflexion and monthly with key Sometimes there is nothing on the agenda, but you keep the channels of communication open to keep the relationship going, and it inevitably results in constructive dialogue. Communicating change, whether positive or negative, needs to be done efficiently and amicably. This can be done in person or remotely, and it helps if you’ve kept up the regular contact.
Paul Lester, CBE, Serial Chair, Chair of Marley
Boards need diversity, efficiency and a bit of fun in order to be successful. So says Paul Lester CBE, who holds an impressive array of chairmanships, including that of FTSE 250 Essentra and private equity-backed retirement community builder McCarthy & Stone, as well as roof tile specialist Marley, which has been backed by Inflexion since 2019.
“You should look forward to board meetings; there should be a good atmosphere with the right chemistry between the individuals,” Paul explains, as this sets the tone for the growth journey together. “If you can get that right, it’s a good board, since even if things are going wrong, it is more likely you will work well together to solve the problem.” Having occasional dinners and informal pub and bar visits is also worth doing to build relationships. But getting the board right in the first place is a big job, and he stresses the importance of it reflecting your employees and end- customers. For this reason, diversity is key.
“Marley makes roof tiles and they’re bought by builders, merchants and the housing sector, but our ultimate customer is the consumer. It’s important to have female input on the board as females make up 50% of our customers, as well as our employees and other stakeholders, and they often bring a different perspective to board discussions.”
An issue with getting diversity right is the lack of diversity coming up through businesses. Paul therefore puts the onus on the recruiter of new talent to address this.
“Whenever you recruit, for senior management or for NEDs, you must tell the recruiter you want 50% female and 50% male candidates. I would not choose a female over a male if they weren’t as strong as the male candidate, but all things being equal, then I would."
He also suggests growing your own diverse talent.
“Many businesses have an apprenticeship scheme, and if you balance the intake, you can turn it into an excellent training ground to create strong diverse managers for the future.”
One business he works with which has been doing this for seven years now has apprentices in middle management. It is a property management business, and the talent brought up through the programme has been 50% female, 50% male and 25% ethnic minority.
Virtual meetings have been more effective than many expected. At Marley they’ve worked because the team knew each other well before the pandemic, although face-to-face meetings are still important and they are gradually returning to them.
“A board is like any other team, it needs to work hard together and occasionally have down time together and enjoy each other’s company. The pandemic has meant shorter meetings over video calls which is efficient, but we need to ensure the chemistry isn’t lost.”
They should only include the information management needs to manage its business and a commentary on it; there is no need for extra information for the board. Packs should be lean, with a max of four pages per section: CEO, CFO (accounts and forecast), COO (sales and marketing, HR, IT) with an appendix if needed for detail.
“Getting papers concise is harder than writing lots of pages. We also have one-hour mid-month video calls between board meetings. It means by the time we get to the board, we are already up to speed and there’s no surprises – so it makes for very efficient meetings.”
That’s the role of the Chair, whose job is to keep time and ensure attendees feel empowered to have their say, give their view on a subject and challenge in a sensible way.
“At the end of the day, the board gives management food for thought, makes arguments for and against ideas and proposals. However, the board must not try to manage the business but rather support the executives to come to the right decisions. If you have to start to tell management what to do, you have the wrong management or the wrong Chair!”