ISSUES AND COMMENTARY
The non-executive director’s checklist
Looking for a role as a non-executive director? Here’s a five point checklist that might help.
Embarking on a career as a non-executive director (NED) is not for the faint hearted but training and preparation for the role makes it a highly rewarding experience.
As Farzana Baduel points out in her excellent blog post How to land a non-executive director role and what to do when you get there: “Each board position on my CV reflects countless rejections.”
Outside of her points about needing a relentless focus and the value of networks, the key to success is training and development so you are primed and ready to discharge your duties, both legally and as an important independent company asset.
According to the Institute of Directors, the difference between a good director and a great director is the company you keep.
I’m an ambassador for the membership body, which sets the standards for professionalism and good governance. Having recently completed the course, I can vouch for its Certificate in Company Direction, which is the first step on the path to becoming a Chartered Director.
This rigorous training into high performance leadership delivers insights into:
The role, responsibilities and legal duties of a business director
The characteristics of an effective board
Financial terms and concepts
Issues and processes involved in formulating strategic business plans (and you can see some of the teaching put into practice here)
How leaders create influence and impact within and beyond their organisation
Equally, I’ve completed non-executive director training with the Non-Executive Directors’ Association (NEDA), which sets out the expectations of NEDs as follows:
“NEDs have a role in strategic decision-making, monitoring the performance of management and the financial reporting process, the review of risk and controls, and (through committee work) the remuneration of top executives and the appointment of new directors.”
In The Independent Director: The Non-Executive Director’s Guide To Effective Board Presence, Gerry Brown goes further.
Brown says: “An independent director is both a coach and a referee. He or she acts as a guide, mentor, and wise counsellor to the firm’s executives.
“Good independent directors bring with them a wealth of knowledge from their own executive careers. They bring examples of best practice they have seen elsewhere; they recommend trustworthy consultants and advisors; they bring experience of working in different sectors and global markets, which the existing team may not have. They help guide and shape strategic thinking, perceptions, and understanding of risk.
“The one thing they do not do is get involved in day-to-day management; that is the province of the executive, and the boundary between their separate roles must always be respected.”
So what should every NED consider when approaching a new role? Here’s a five point checklist:
Be curious. Do your research about the business. Bearing in mind Brown’s advice above, be sure you have the relevant experience needed by the company. Specific skillsets will often be part of the job role advertised so make sure you can provide examples of what’s being asked for.
Be informed. A whole host of data can be found online so there’s no excuse for discovering too late about any financial or regulatory impropriety. Executive and non-executive directors have the same duties and responsibilities under UK law and may be equally liable if duties aren’t discharged appropriately.
Be honest. Check the commitment and that you can deliver. There will always be a basic time commitment, but good NEDs make themselves known within the organisation to stay abreast of developments and can also be drawn in when issues management is required. It’ll always be more than you initially think.
Be involved. Understand the governance as much as possible, as early as possible. Talk to other NEDs and members of the executive team as a priority. If you can, evaluate the effectiveness of the chair as this person’s management style will impact how effective the board is. Overpowering chairs can stifle debate and drive personal agendas, weak ones can create a different type of dysfunction.
Be protected. Ensure when taking a new position you have a formal contract which outlines your role in detail. Also make sure the company has a Directors and Officers (D&O) policy in place so there is some legal protection in the event of an action resulting from a wrongful act.
Cash flow is king during a recession. Here’s how to achieve it
There are lots of ways of increasing cash flow and it takes decisive action now. Expert Alastair Thomson shares his tips to keep businesses on the straight and narrow.
Alastair Thomson is the author of Cash Flow Surge, a hands-on guide for business owners.
As a specialist in helping businesses increase revenues, reduce costs and build stronger cash flow, I asked him what steps management teams can take now to help build resilience. Here’s what he had to say.
1. UK business is experiencing a sustained period of economic and political turbulence and uncertainty. What should business owners be doing and thinking right now?
In conditions of uncertainty, businesses need to stay “light on their toes”. In particular, they should think carefully about how much of their monthly costs are fixed costs (eg rent, where the same amount is paid out each month) and how much are variable costs (eg computer software, which is sometimes charged according to how many active users were on your system in the last 30 days).
While it’s rarely possible to have every cost as a variable cost, you want as many of your costs to be as variable as you can. That means if your business hits hard times, your costs scale down automatically as your activity scales down. It won’t solve all your problems, but that strategy will go a long way to solving a lot of them.
For the fixed costs you do have, like rent, lease payments on company cars and so on, ask yourself whether you’re really getting full value from them. If your office (where rent, rates, utilities, etc are usually fixed costs) is only half-full of people, maybe look for some premises more suited to the size of workforce you have now and take your fixed costs down a notch or two while you have the opportunity. And do it ahead of the curve – don’t wait until it’s the only option. Do it now.
2. What top tips would you give to someone looking to boost their cash flow?
a) Think about the extra services, directly related to what you do now, you could offer to your existing clients. As long as you’ve provided them with a good service until now, a reasonable number should say yes, your sales cost should be close to zero, and you can start generating extra cash flow today.
Even simple things mount up. For example, could you offer a premium, next-day service for 10-20% more than it costs normally? Not all clients will want that, but for those who do (provided you’ve got your operations lined up to deliver that service) you make more profit doing exactly the same as you do now.
b) Always have a ‘top, middle and bottom’ offer structure like the big supermarkets. There’s always Tesco Finest, Tesco Standard and Tesco Value. That way if someone walks into their store for just about any product under the sun, the perfect solution for their budget is on the shelf, ready to buy.
Don’t lose value shoppers after you’ve done all the hard work on marketing and sales to get them into your store. And don’t miss out on profit opportunities from premium customers because all you have is bargain-basement offers. For people with money to spend, that can be a real turn-off.
c) Prompt your customers to re-order, don’t leave it up to them to remember. If you can get a monthly subscription service, even better. But if you can’t and (say) your standard product should last your customer for about a month, 7-10 days before each month is up send a short email reminder to make sure they get a fresh supply of your product or service before they run out.
While your business is always at the forefront of your mind, you’ll be lucky if most of your customers think about it once in a blue moon.
So take all the hard work out the process for them by (gently and politely) nudging them into ordering their next month’s supply on time. If they run out and don’t remember to re-order within a couple of days, the likelihood is that’s the last you’ll ever hear of them. And remember - you won’t generate a penny in cash flow from a customer you don’t have any more.
3. What’s the most common mistake that business owners make and what should they be doing instead?
They focus on reducing costs when they would probably make more money overall by thinking of ways to increase revenues.
If I buy something for £1 and sell it for £2, that’s not a bad business.
But if I could buy a similar product for £2 and sell it for £5, that’s a much better business.
So don’t obsess over costs. Obsess over what you can sell your products for. As long as you provide extra value that more than compensates for any extra cost, you’ll almost always be better off by spending more money up-front but selling it for an even bigger margin than you do now.
4. Financial reviews and accounts provide a useful look at what’s happening with a business but can be backwards facing. What else should management teams consider as part of their strategic planning?
My rough rule of thumb is that management teams should be looking forward two-thirds of the time and looking backwards one-third. My favourite way to do this is to combine a couple of accounting techniques (sorry, even my eyes glazed over there…) which identify the real cost drivers in your business, and then overlay daily/weekly/monthly activity levels to generate a meaningful forward view of profits and cash flow.
On the off-chance you’re interested, the two techniques I combine for this purpose are Activity Based Costing and Zero Based Budgeting – but the latter in particular can be dangerous in the wrong hands, so be careful if you try that one out!
5. If you had the power to influence government, what one policy would you change?
How long have you got…
Governments tend to be great at tracking costs and poor at tracking benefits. This results in them often spending more than they have to in order to fix problems. Yes, trying to save money in an unsustainable way actually costs more money than it saves!
A classic example is the long-term underinvestment in social care which dramatically increases the cost of running the NHS because people are kept in hospital (very expensive) instead of being looked after in a properly funded system of social care (much cheaper).
Investing in social care sounds like '“spending more money”. But it would actually save billions a year, if anyone bothered to do the calculations.
Not only that – it would also ensure much better outcomes for those who need a hospital bed, but can’t get one at the moment because there’s no social care setting to discharge the current occupant of their bed to. What’s more, for those who are discharged from hospital into social care, this is often a much more appropriate setting for their needs, which means they get better outcomes too. And all at a lower overall cost.
Similar challenges apply in education (especially schools and further education colleges), transport and infrastructure investment.
So do a better job of joining the dots, would be my recommendation. And employ much better accountants – this stuff isn’t especially hard. Someone at the Treasury, or the responsible government department, just needs to join the dots more often than they do at the moment.
Find out more about Alastair and Cash Flow Surge at www.CashFlowSurgeBook.com.
Toby Mildon: You can become a diversity and inclusivity architect too
Everyone can be a diversity and inclusivity expert with some help. Toby Mildon explains how.
Today was the PRCA Equality and Inclusivity Advisory Council Conference. I was privileged to have a role speaking about my not-for-profit PR school Socially Mobile and to be part of a panel session discussing the importance of fair pay in building an inclusive industry.
The keynote speaker was Diversity and Inclusion architect Toby Mildon.
Toby has worked with the BBC, big four consultancy firms and is the author of Inclusive Growth.
Toby opened by addressing the issues that often face businesses implementing diversity and inclusivity strategies. Regular and consistent challenges include:
Not having enough data
Previous events or training haven’t had a major impact
Diversity and inclusivity is seen as a HR problem with no shared responsibility
The focus has been on raising profile externally and not on internal culture (the rhetoric gap)
There is little support from the senior leadership team
There is no change management process in place to evaluate progress
Areas of best practice
To move past these issues, Toby had some useful advice. His first recommendation was to gain clarity about how representative your organisation is to get a baseline place to work from.
His next step was then to establish the WHY before moving to the HOW and the WHAT to achieve sustainable change.
A key message was that leaders have to embrace discomfort to make change happen.
“The fear of causing hurt and embarrassment holds us back. Senior leaders have to move past the awkwardness to have the difficult conversations and be a role model.”
As ever, planning and measurement is crucial to success for any change management programme. Before putting anything into action, Toby suggested that management teams should agree:
What success looks like
What the ROI should be
What the roadmap or delivery plan will be
How the responsibility will be owned
Consideration should also be given to the steps needed to create inclusive employee journeys and the technology needed to scale up D&I efforts.
Toby’s book includes a full seven step process that leaders can follow to make a meaningful difference in their organisations. At just £12.99 it’s well worth your time and investment.
Queen Elizabeth II - the greatest of leaders
The very definition of a leader is someone who commands followers and Queen Elizabeth II had millions across the globe, united in admiration for her sense of duty, dignity and soft power.
US modern leadership pioneer Warren Bennis became famous when he said that “Leaders are made rather than born.”
Contrary to ‘Great Man’ and ‘Trait’ theory he believed that leaders weren’t such thanks to their genetics but were formed by ‘crucible moments’ that forced individuals to grow, think differently and look outside themselves.
There can be no better example of this than a young Princess Elizabeth acceding the throne at just 25 on the death of her father. Taking the place of Head of State, surrounded by men mostly twice her age, would have been a formative moment that little could have prepared her for.
Since then, Queen Elizabeth II has proven herself as one of the greatest leaders of our time.
The most visible female leader in the world, there can be no doubt that the Queen had a unifying mission: to keep Great Britain, the realms and Commonwealth together, to support our armed forces and provide stability throughout a time of change and political and economic uncertainty.
Her values were British through and through – a commitment to democracy, the rule of law, respect and tolerance and individual liberty. She devoted herself to public service, knowing that to break this unwritten contract with society would break the monarchy. As she often would say: “I have to be seen to be believed.”
Her speech during the coronavirus outbreak was one only she could give, providing a very human reassurance to the general public that was not forthcoming elsewhere. Without us even realising, she continuously filled a vacuum, steadying us at turbulent times through her very presence:
“We should take comfort that while we may have more still to endure, better days will return: we will be with our friends again; we will be with our families again; we will meet again.”
The very definition of a leader is someone who commands followers and Queen Elizabeth had millions across the globe, united in admiration for her sense of duty, dignity and soft power.
As Andrew Rawnsley wrote in the Observer: “She satisfied Britons’ love of tradition and pageantry while moving with the times just enough not to look archaic. Incremental adaptions to popular culture swelled the affection for her.”
Now all eyes turn to King Charles III who, as his mother before him, has been propelled into the role of Head of State on the death of a parent. From a human perspective it feels unfathomable, brutal, almost inhumane to watch him follow the protocols that are necessary at this time, while needing to grieve.
But as a communicator his actions have been commendable and to see the affection his presence among the general public has generated shows that there is still a huge opportunity for the monarchy to remain a firm part of British life.
In his first address as King, he said: “As the Queen herself did with such unswerving devotion, I too now solemnly pledge myself, throughout the remaining time God grants me, to uphold the constitutional principles at the heart of our nation.
“And wherever you may live in the United Kingdom, or in the realms and territories across the world, and whatever may be your background or beliefs, I shall endeavour to serve you with loyalty, respect and love, as I have throughout my life.”
A new era dawns. God save the King.
Photograph: Instagram / The Royal Family.
Good corporate governance requires integrity and an employee focus. Both are lacking at Royal Mail
Corporate values should always match behaviour. Here’s an example of what happens when they don’t.
The Institute of Directors (IoD), where I am a branch chair and ambassador, teaches directors that the three principal tenets of corporate governance are accountability, integrity and transparency.
It’s something management teams would be wise to heed, as Ricky McAuley, Operations Director at Royal Mail, found out this week during an interview with BBC Breakfast’s Charlie Stayt.
In the interview about planned strike action by workers at Royal Mail, McAuley was forced to admit that bosses would still be getting profit bonuses while its Communication Workers Union (CWU) members would not be receiving a cost of living pay increase. It might have played well round the Boardroom table but it fell flat on national TV.
Corporate purpose isn’t a nice to have and reputation can make or break a company.
On its jobs page, Royal Mail says its values are to Be Positive, Be Brilliant, Be Part Of It.
McAuley spoke about Royal Mail wanting to be the best employer in its sector. Sadly his words don’t match the organisation’s behaviour. If Royal Mail continues in this vein, no one will want to Be Part Of It.
A masterclass in communication
Huw Edwards has delivered a masterclass in communication this week and the BBC’s rolling news has been exceptional. The world’s largest broadcast news organisation needs to be protected.
This week has seen huge, transformational events in the UK, with a change of Prime Minister, the death of Queen Elizabeth II and the proclamation ceremony of King Charles III.
The BBC has been my go to throughout this momentous week. Anchoring the news almost throughout has been Huw Edwards, a veteran broadcaster who delivered a masterclass in communication as the announcement came that the Queen was seriously ill and then had died.
Pitch perfect, Edward’s professional, familiar tone and delivery provided reassurance as the gravity of the situation started to dawn for everyone, from MPs to the media and general public.
His sombre announcement about the Queen’s death, delivered slowly and clearly with pauses and repeated to ensure the message had been received, was absolute best practice in terms of news reading and public speaking.
With rolling live news, gravitas and stamina are crucial, and experienced broadcasters know the value of sharing their own emotion when the seriousness of the situation merits it. Huw’s personal sadness at the news, felt by viewers across the world, brought real humanity to the moment.
Watching the news organisations deliver rolling live broadcasts has also underlined the importance of crisis preparedness.
This Guardian post about what happens when the Queen dies sets out the huge logistics behind what happens when the Head of State passes away. The media have their own protocols which have been enacted this week.
The BBC is the world’s largest broadcast news organisation and this week it has shown why it is rightly regarded as the best in the world. It is trusted, exceptional, part of our social fabric and should be protected.
The power of connections
Here's a little story about generosity and the power of connections because we all have an opportunity to change things for the better, even in the smallest of ways.
Here's a little story about generosity and the power of connections.
I'm sharing the email with the kind permission of Tom Levitt because it's a lovely lesson about how giving a little bit of our time can result in meaningful and transformational change.
Tom and I first met in 2018 when I was President of the Chartered Institute of Public Relations.
Through both my work as a management and PR consultant and my voluntary role with the CIPR, I was keen to meet Tom, who is a sustainability adviser and the author of The Company Citizen (among many things).
His book, which I recommend wholeheartedly to those interested in organisational purpose, argues that environmental sustainability, economic and social inclusion and the better management of resources are all key issues for business. As he says, business doing good is good business.
I was keen to hear more and to ask if he'd come and speak at the CIPR's National Conference and talk about the role of PR leaders in making this happen.
Tom, being Tom, was unfailing generous. We met at the Institute of Directors where he shared knowledge and insights and also signposted me to all sorts of further research. As for the conference, of course he spoke - inspiringly - on the day.
And on that day he was also able to meet our keynote speaker, Richard Walker from Iceland Foods and the lovely Hilary Berg who helped secure Richard's involvement.
I believe passionately in social mobility and there is nothing that fires me up faster than inequality. When Tom sent me this email, I caught my breath.
From that meeting, Richard, Hilary and Tom stayed in touch. And now, after two years of hard work and through Tom's Fair for You CIC, they have together launched a zero interest loan scheme to help struggling families across the UK put food on the table.
The anger I feel about the fact this is needed in Britain in 2022 due to an abject failure in political leadership is a post for another day.
Today is about being grateful for those leaders who play their part in society so that people can eat and survive - and for feeling happy that I was able to be a very tiny link in that chain.
For more information please visit https://www.fairforyou.co.uk.
How then influences now, DE&I, managing overwhelm and other stories
It’s always a pleasure to be part of industry commentary and speaking to Eloïse Clarke for Milk & Honey’s #UntickTheBox podcast was a particularly thought-provoking and enjoyable experience.
It’s always a pleasure to be part of industry commentary and speaking to Eloïse Clarke for Milk & Honey’s #UntickTheBox podcast was a particularly thought-provoking and enjoyable experience.
Eloïse’s relaxed manner and well-framed questions managed to tease quite a few personal details from me, which I wouldn't normally share.
The first part of our conversation revolved around why we choose the career we do and how that's often rooted in our past. That’s certainly been the case for me – and my background has been a big driver behind my focus on giving back and helping others up the career ladder. With reference to Socially Mobile, we then moved onto a discussion about diversity in the public relations industry and what other interventions are still needed.
My Free To Thrive work helps creative agency bosses, particularly parents, to manage overwhelm so it was great to also chat about this and share a couple of simple game changing exercises that everyone can use. Take a listen to discover my two key watchwords that I encourage clients to practice every day.
You can find the podcast here – hope you enjoy it!
A New Start
A reset is good for the soul, as well as the career. Here’s my personal story.
The pandemic, like for many, pressed my reset button.
As a virtual agency since its inception in 2009, the talented team at my management, PR and marketing agency Astute.Work had already been working remotely. It was business as usual and in the face of this black swan event we were quickly able to help our clients, many of which were buffered from the crisis, move online and pick up further work when our competitors furloughed.
It was a huge privilege and both humbling and rewarding as an experience. It was also tough at times and I found the time homeschooling particularly gruelling.
Then, as ever, a busy work life collided with the personal. My son was diagnosed with epilepsy. I had two toxic working relationships collide. Most of all I was exhausted from a year of online trolling followed by a year managing the incompetence of The Met, despite the involvement of MPs, the Civil Service and others. But that’s a story to be told another day.
After I was seriously ill from COVID a second time, I pressed stop.
Enforced bed rest gave me the time to think carefully about my life and what I wanted. And with the support of my family, team and clients, I decided to make big, scary, audacious changes, starting with the closure of Astute.Work.
While the agency has been one of the best things I’ve ever done and I’m proud of what we achieved, my personal skills, experience and goals had changed. It was time for a new start.
So welcome to the new me. Sarah Waddington: NED, Activist and Communicator.
I’m thrilled to have three exciting arrows in my quiver.
As before I’ll be providing non-executive director services and management consultancy to the wider business marketplace, with a focus on the North East.
I’ll also be joining the family business, Wadds Inc., as a director to work as a NED for creative agencies and am thrilled two of my existing clients, Resonance and Magic Digits are coming with me.
At Wadds Inc. I’ll be extending the Free To Thrive service I’ve been delivering to help busy agency owners (especially parents) deal with overwhelm.
And finally I’ll be doing the other thing that makes my heart sing - activism to address the systemic issues in society holding people back. This includes a continued focus on Socially Mobile, the community interest company run by my husband Stephen and I, which delivers training to those from lower socio-economic backgrounds, as well as under-represented and under-served groups.
I can’t wait to get started. If you’re looking for an experienced non-executive director with expertise in organisational focus and purpose, strategic implementation and performance and stakeholder engagement, let’s chat.