Sir Roger Carr is Chairman of BAE Systems, a member of the Prime Minister’s Business Advisory Group, Senior Advisor to KKR and a Visiting Fellow of Saïd Business School. Sir Roger was formerly Chairman of Centrica, Cadbury, Thames Water, Deputy Chairman of the Court of the Bank of England and President of the CBI.
Boards need to be better at focusing on what matters. Since the financial crisis many of the basic procedural barriers to good governance have been addressed, with overly large boards slimming down to a more sensible size and meeting at more sensible intervals. But that doesn’t mean we are getting the most out of them.
The next challenge is content not process. Boards need to start spending at least as much time on the development of strategy as they do reviewing past performance. A discussion about last month’s financials backed up by hard facts and figures is less mentally taxing than a discussion about the future, full of ambiguity and uncertainty. But boards need to resist the temptation to take the easy path and break the almost mechanistic rhythm that can get in the way of the conversations that matter.
The Chairman sets the tone and culture. And this can make or break an organisation and its board.
If the Chairman sets an open, honest tone, management will be more forthcoming with their issues and concerns.
And in a large multinational, where the non-executives can’t hope to root out everything that matters by themselves, you depend on this. Without it you leave yourself and the business highly exposed.
It’s critically important. But the distinction here is between value-adding information and data.
The Company Secretary has a role to play here but the onus is on each board member to sit back and ask themselves, ‘is this information giving me what I need?
I’d like to see greater continuity between governments.
We need sensible, long term commitments to key industries and infrastructure. And this should transcend party politics.
Our influence is defined by three things: our position in Europe, our relationship with the US and our role in NATO and the Security Council. If you weaken any one of these three, you dilute our significance on the world stage.
But with a favourable time zone, a respected legal system and the world’s business language as our mother tongue, we’ve been able to punch above our weight and engage in free-trade agreements with the world’s largest markets.
We make up less than 1% of the world’s population and less than 0.5% of the world’s land mass. But if we jeopardise any of those three positions we may become what we are – a small island.
The markets are so unpredictable, it’s impossible to say. Who would have thought 12 months ago that the price of oil would have dropped below $50?
That said, the world isn’t getting any safer, so I’d back the defence sector. Defence is not a luxury, it’s a necessity.
I’m two thirds of the way through General David Richards’ autobiography, Taking Command. It offers an insight into his life and military career, with some interesting ideas on unconventional leadership.
Whatever you do, do it with enthusiasm. Someone with energy and enthusiasm will always trump somebody, however talented, without it.