This week, it was a real honour to launch a project that I’ve been working on since 2017 – Boards of the Future: why the Board of the Future should be the Board of today – and how to build it. It is my signature report, and the result of years of reflection, discussion and putting my vision into practice.
Regular readers of my column will remember that in 2017, I wrote an article challenging Chairs to think carefully about where their next Board members should come from. Why, I asked, do so few Boards include those under 35, when millennials hold such significant purchasing power and digital transformation is accelerating so rapidly? Young people were beginning to reshape the business world, and yet a millennial voice was missing from the Board in virtually all businesses.
Almost as soon as I’d published the article, Chairman of the Co-op Allan Leighton got in touch and asked me to find him a new Board member who could provide these sorts of alternative perspectives to the £15bn retailer.
The process of making this placement inspired in me a whole new way of thinking about the Board.
Almost four years on from my original article, it is my view that the role and composition of the Board must be fundamentally reimagined – without losing sight of its core oversight and governance responsibilities. To achieve a deeper meaning of governance, companies must embrace a new NED profile and optimum Board composition.
Over the past year, it has been the greatest privilege to discuss my vision with more than 100 Charis and NEDs of listed businesses. Boards of the Future details my philosophy, and draws on these conversations to offer five principles on which the board of the future should be built.
On Wednesday afternoon, it was a privilege to launch the Boards of the Future report with a virtual event. The session was attended by Chairs, NEDs and industry leaders, and featured my dream panel of forward-thinking leaders from industry veterans to millennials at the beginning of their career but making a huge impact: Archie Norman, Penny Hughes, Ric Lewis, Jambu Palaniappan and Lisa Shu.
The event kicked off with a special appearance from Allan Leighton, Chairman of the Co-op, as always wearing pink in support of breast cancer awareness, who came on to talk with me about what the Board of the future means to him – and why he took up my challenge all those years ago.
“It’s always been pretty simple to me,” he began, “diversity means getting the best brains – and this means including women and those from different ethnic minority backgrounds. But when I read your article all those years ago, it reminded me that diversity is about age, too. I thought: ‘yes please, I’ll have one of those!’
“Diversity matters, as you need different types of thinking round the table. Times have changed and the world is moving fast. There used to be a business strategy, and a plan, and time between the two. Nowadays, the strategies often have to change as quickly as the plans and you need true diversity of thought to see this through. The Boards of the future are going to be significantly different from the Boards of the past, and even significantly different from the Boards of today.”
“Times have changed and the world is moving fast. There used to be a business strategy, and a plan, and time between the two. Nowadays, the strategies often have to change as quickly as the plans and you need true diversity of thought to see this through.” Allan Leighton, Chairman of the Co-op
This notion of diversity of thought sits at the heart of my thinking – and is one of the core principals outlined in the report. To me, it remains clear that combining directors whose backgrounds and experiences – both professional and personal – are varied and wide-ranging results in better conversations, more innovation and creative problem solving.
Speaking on how to achieve true diversity of thought, panellist Lisa Shu shared how she has built her first cohort of trainee venture investors at Newton Venture Program, where she is executive director. “Like attracts like, and it’s the crux of Newton’s mission that difference is strength, difference is power and difference is influence,” she explained. “Like attracting like wasn’t good enough for us – so to build our cohort we had to go into communities that weren’t in the first, second, or even third layers of our network.” By underpinning the application process with diversity, Lisa has built a cohort of trainees which is 54% female, 20% black, 25% Asian, and 10% who identify as minority ethnic or other.
Beyond gender and ethnicity, age diversity is a key component of the Board of the Future. I was so pleased that Archie Norman, Chair at M&S and Signal AI, agreed to write the foreword for this report. In it, he makes the case for millennial representation and age diversity, stating that ‘the future is now – and it is not us!’.
At the event, I asked him to expand on this point. “Today the way customers think, the way business is done and attitudes to working life are changing faster than ever. The new business titans from the tech world are young and different, sometimes startlingly so. For established Boards the challenge is how to rekindle curiosity, how to see round the corner to the next disruption. Modernising the old warriors has to be part of that.”
“For established Boards the challenge is how to rekindle curiosity, how to see round the corner to the next disruption. Modernising the old warriors has to be part of that.” Archie Norman, Chairman of M&S and Signal AI
Building on this idea, Penny Hughes, Chair at The Gym Group and iQ Student Accommodation, made the case for including sitting executives around the board. “It is critical to have directors who can tell people how it feels to run a business today. Even if sitting execs don’t have the quantity of time others do,” she suggested, “the quality of that time more than makes up for it.”
Another core principle of the Board of the future is around digital, data and technology. Boards that incorporate genuine domain knowledge – from those who speak the language of technology and can translate it for their fellow board members – are better equipped to challenge the business, and are clear-eyed on the risks and opportunities of digital, data and technology, including cyber security.
One person who knows this more than most is Jambu Palaniappan, who spent his formative career at Uber (employee number 75), and is Managing Partner at tech-focused VC fund OMERS Ventures and a member of the supervisory Board at Just Eat Takeaway.com.
“All businesses will be tech businesses eventually,” he explained, “but today the biggest risk to any company is disruption from the outside. Technology businesses are not just software businesses disrupting software businesses – they’re moving into agriculture, retail… every corporate sphere. Technology must be a core component of your business strategy. You need to make sure you’re having those conversations and disrupting from the inside, rather than feeling the effects of disruption from the outside. If you don’t have that as part of your core strategy then someone else will do it.”
“Technology must be a core component of your business strategy. You need to make sure you’re having those conversations and disrupting from the inside, rather than feeling the effects of disruption from the outside.” Jambu Palaniappan, Managing Partner at OMERS Ventures and member of the supervisory Board at Just Eat Takeaway.com
At just 33, Jambu represents the next generation of leaders. And while championing new ideas is vital to any successful business, the best Board will remain grounded by veteran industry experience. Directors with deep sector experience – through multiple economic cycles – provide critical ballast, ensuring the board doesn’t lose sight of the fundamentals, and can apply past lessons to future challenges. Allan, Penny and Archie represent these sorts of leaders, who can – in Penny’s words – “polish a business for the next generation” while still offering insight from years in the field.
Beyond composition, Boards of the Future recommends that Boards should be able to understand a company’s place in the big picture. The Board’s ability to think broadly and beyond the commercials – on ESG, on the zeitgeist and on future trends – helps businesses secure their place by connecting with consumers, retaining relevance, and assuring a long-term future.
Ric Lewis, founder of Tristan Capital Partners, Chair at Impact X, a VC dedicated to supporting underrepresented entrepreneurs across Europe, and NED at Legal & General Group, spoke compellingly on this point at the launch event.
“Boards are responsible for the character and brand of the businesses they serve,” he commented. “When I started out, I thought it was all about financials and shareholder value – I didn’t have a firm grasp on the intangibles. But now more than ever, the Board is responsible for how the brand, product and service is regarded in the marketplace. Not just how the company works – but what it stands for, the culture of the firm and what goes on in its communities.” Ric pointed to a cultural shift in the corporate sphere, suggesting that the events of 2020, with Covid-19 and the Black Lives Matter movement, will have a lasting impact on how Boards view their responsibilities. “We can’t bury our head in the sand anymore,” he insisted, “the pendulum has swung and I’m desperate that it doesn’t swing back.”
“We can’t bury our head in the sand anymore. The pendulum has swung and I’m desperate that it doesn’t swing back.” Ric Lewis, Founder at Tristan Capital Partners, Chair at Impact X and NED at Legal & General Group
The last principle detailed in the report is about NEDs as individual role models. Today’s Boards are more visible than ever, and appointing directors who mirror the company’s values and reflect customers and colleagues has the power to set the tone from the top and inspire.
As Chair at The Gym Group, Penny has built her Board with this in mind. “For our colleagues and our customers, they can look at our Board and see themselves represented. Across many different elements of diversity – we’re not a group they don’t recognise.”
Achieving all this is no mean feat, and businesses must strike a balance between governance, commerciality, and conversation, embracing a new NED profile and optimum Board composition. Most of all, the Board of the future requires the Chair of the future, who builds the Board with these principles in mind and creates an environment where different perspectives can flourish.
“It’s about getting the balance of people around the table right,” offered Archie (who I would say is doing a great job as a Chair of the future!) “A board is not a panel of experts. Each should be a generalist with a spike – bringing deep knowledge of an area, but also the ability to challenge, identify and empathise with the executive team. Disagreement is good, as long as the chemistry is such that everyone is there to do the right thing for the long-term interests of the company.”
“Boards don’t need consensus. It’s the job of the Chair to make sure there’s a positive, functioning and collaborative environment even when there’s disagreement.” Penny Hughes, Chair at The Gym Group and iQ Student Accommodation
“Boards don’t need consensus,” added Penny (another brave, forward-thinking Chair) “and it’s the job of the Chair to make sure there’s a positive, functioning and collaborative environment even when there’s disagreement.”
I left the Zoom meeting feeling more inspired than ever. Now is the time to reshape and reimagine the non-executive Board, to seize opportunities today and protect against setbacks tomorrow. I do hope you find the report insightful. I’d love to hear from you – please do email me with feedback on moira@thembsgroup.co.uk.
Moira.benigson@thembsgroup.co.uk | @MoiraBenigson | @TheMBSGroup