Board Evolution – Berwick Partners are currently undertaking a series of interviews with business leaders, to understand how they and their Boards have adapted and reacted to the increasing complexities of the world in which we operate. We are examining the importance of leadership DNA and the behaviours, traits and skills that are vital to an evolving Board.
As a part of this research, Matt Cockbill interviewed Peter Thomas, a seasoned and experienced interim CEO, on the issues surfaced and lessons learned during the pandemic that are shaping ‘Board Evolution’.
Peter Thomas is an award-winning Interim CEO, highly experienced leader, cross-sector specialist who transforms entire organisations in the face of real challenge. He has worked across multiple sectors and industries focusing on strategic transformations, turnaround, crisis leadership, restructuring and taking businesses that are stagnant and in decline and transforming them back into long term growth with sustainable stakeholder value. With strong EQ and considerable leadership experience Peter has exceptional people skills working at board level through to shop floor. He loves to take on big challenges where he can leverage his deep skillset in making a difference and leaving a legacy.
Considering the turmoil and uncertainty that COVID has caused, what should be done to prepare the Board to ensure they can rise to new and unexpected challenges in the future?
From many of my conversations with Board level Executives over this last year, COVID has exposed many Chairs, Boards, NED’s and Exec teams as previously being too rigid in their adaptation of strategy and oversight in the face of rapid change and challenge. Chairs are having to review their existing performance and re-evaluate if the current board have the capability to take the business into and through the next business cycle. Surprisingly, I have known of some NED’s with long service resign their roles as we headed into the first major lockdown. They understood what was coming, and dare I say it, knew they would need to really roll up their sleeves and go beyond their remit of oversight and stewardship!
COVID has shaken people and exposed some of their natural traits. In trouble and crisis – particularly at executive level, you hold a fiduciary responsibility, and this naturally unsettles people who quickly realise that they have company/corporate liabilities. This greater exposure to risk and crisis has brought fear into their thinking. CFO’s are also under huge pressure to produce accurate forecasting with demands on data and numbers that seem to be continually changing. In many cases this has particularly surfaced problems which have hitherto been hidden previously!
I think that the pandemic response has provided firms with a good time to clean house and prepare – to some extent, they have had no choice. Review the capabilities of the Board, NED, Chair and with this address a revised oversight model. As I see it, there are still two tracks, even after a year of COVID and extended government support – the first are those companies in the eye of the storm: crisis, distress and survivorship. For them, a strategic review is a way off as they are entirely survival focused. The second track is those who survive, BUT are in a deep review of operating models, strategic approach, embracing considerable change and refining what is needed for future success. Throw digital & data into this and there is so, so much to be done.
What do you believe to be the ideal structure for a future-proof board/ExCo? Should it represent any functions or specialisms that it does not currently?
The best practice, and for example Institute of Directors led view, is that Board (Chair and NED’s) provide official oversight and it is still fundamentally critical, irrespective of COVID. But in this current climate Boards must have a wider capability, mindset and skillset within it – they need fluidity in their thinking and decision making. All organisations are changing rapidly, so it’s moving from a previous approach of a complicated strategy to that of a rapidly changing complex one. Leadership skills need to match what is ahead. I have always believed there has to be HR and Marketing on the Board. Historically they may have held ‘C suite’ titles but have not been given the necessary scope and strategic oversight to change the course of the business – which the board clearly has. Historically, these skills have often been supplemented by a NED. There must be a stronger emphasis on people and marketing to match the demands that lay ahead.
In these times, where businesses are striving for recovery, Boards also require very experienced, measured, crisis hardened leaders and NED’s, who are prepared to support the exec team with meaningful input. The traditional NED of recent years with big portfolios of roles may well need a change – there is a balance needed of more bridging and in-depth focus from board to exec team.
Often threats evolve faster than a business can hire an ‘expert’ to cure it. Has the pandemic shown us that good leadership and breadth of softer skills trump expertise?
For a long time, I’ve championed EQ (emotional intelligence) - I’ve written articles myself, around the importance of being better leaders and better humans. In my evolution as a leader and CEO, I have made many mistakes and said the wrong things many times, that is where you learn. I recall an Exec Chair pulling me up once, urging me to listen in my board debate, to take opinions from other Board members more actively and readily – a wakeup call for me at the time. COVID has provided CEO’s and leaders with an opportunity to reset the culture of almost all businesses to be fit for the future, and really drive a people (employee and customer) centric focus. It’s a challenging path for leaders and boards to focus upon investing in people, rather investing for dividend without risking a stakeholder revolt.
Historically, there has always been an air of authority with some leaders and most certainly ego and ‘swagger’ has played a part in their approach. This will not last the rigours of the pandemic. COVID has levelled leaders, boards, and organisational cultures We need a wider collaboration to drive ‘empathy’ and a real humble awareness of the needs of people, as a key enabler to driving high performance. Get that right and the former will deliver the latter.
In volatile times effective succession planning might be considered lucky coincidence. How have you seen boards and ExCo’s nurture talent to ensure businesses retain the right people with the right skills for the right moment in the economic cycle?
One of the sectors for example where I have worked in and around in the past, is Social Housing. This sector has traditionally managed succession well, through structure and good governance. They embrace a best practice approach to leadership, and succession planning is strong, giving stability. They have always championed corporate governance in this world. But I also accept, that there needs to be some degree of ‘horses for courses’, driven by the Chair to ensure the board has the right make up to suit the needs. For example, the current digital challenge across all sectors, necessitates a CIO/CTO on the Board. Boards love stability and this last year has been all about instability, but I believe they need to embrace a new mechanism for structured refreshment. Mindset is critical. See the wider picture, understand the skills and experiences needed by the business be bold and embrace the opportunity to change.
How do you foster the most effective working relationships between these groups?
The best practice approach is that Chair and CEO must be joined at the hip! NED’s are there to challenge the strategic direction of the ExCo led by the CEO. Whomever is running the Board, usually the Chair, needs to step back and think have we got the capability and skills on our team that we need ‘now’ for the business? Forget loyalty and emotion and be singularly focused upon ensuring the right people are around the boardroom table who understand the inner workings and demands on the business. However, in uncertain times we need extraordinary, experienced leadership. All leaders must ‘think fresh’, rethink what has been done before, and really place their people and customers first.