Truett Tate is Chairman at TLC Lions, Reference Point, Thinkably, and the Ellig Group. He is a former Chair of QBE North America, former CEO of ANZ Bank OECD, and was previously, amongst other boards, on the board of Virgin, Towergate, Aurora, and Lloyds Banking Group. Here, he explains the centrality of respect to a well-functioning board and shares his perspective on the hallmarks of an effective board.
What makes an effective board?
It requires a focus on culture, whether corporate culture in a broad sense or specifically that of the board itself. As part of this, the board’s composition is the most critical aspect underpinning an effective board. In the last 50 years, we’ve seen significant progress on the ideal composition, especially in the ways that we think about diversity and its benefits.
The evolution of the ideal board composition has shifted from merely seeking named directors to piggyback on their credibility to a more nuanced approach which emphasises diversity in gender, background, race, and skills; this range of diversity is what gives you diversity of thought and the benefits that this brings. The leap to effectiveness goes beyond academic credentials; it delves into the intricacies of individual qualities. It’s about exploring how well board directors listen, share, and perceive. Effectiveness isn’t just about what’s on the CV; it’s about the passion to make a difference, anticipate risks, and align the company’s culture with its vision and purpose.
How does that play out on a meeting-by-meeting basis? What can the chair do to support this?
I think the answer lies in the question — it all comes down to who is chosen as chair. Selecting the chair is the single most important decision you’ll make, and I’m often surprised by how many people underestimate the chair’s role in forming an effective board. You need to choose someone who knows how to get the best out of their team. You need a chair who embodies an exceptional EQ, an innate ability to get people to be their best, and who is driven by collective purpose rather than personal advancement. Simply, if you don’t have that chair then things won’t come together as you would like. These attributes don’t come up as early or feature as prominently as they should in many chair selection processes as they’re often overlooked in favour of a specific kind of CV.
“Selecting the chair is the single most important decision you’ll make, and I’m often surprised by how many people underestimate the chair’s role in forming an effective board.”
What are the main differences between UK and US boards?
Talking specifically about public company boards, the distinctions between the UK and US are diminishing so that they share more similarities today than in the past. However, a glaring difference stands out — in many American companies, it’s common for the CEO and chairman roles to be held by the same individual, a practice which is noticeably absent in the UK.
This discrepancy, in my opinion, is not just a curious difference but the greatest weakness in the US’ approach. I also believe it’s something that will change — not because the UK and Europe are steering the ship, but because it’s a necessary correction to reflect best practice. Moreover, it can infringe on a culture of transparency and openness, which is essential to having an effective board. When a CEO moonlights as chairman, there’s a risk of avoiding candid discussions about ongoing issues or sensitive topics.
“This discrepancy, in my opinion, is not just a curious difference but the greatest weakness in the US’ approach.”
This can imperil a core aspect of a board’s role, namely its independence from the CEO. The board must assess, evaluate, monitor, and decide issues, especially where there’s potential conflicts of interest. The best boards are set apart by their understanding and management of conflicts of interest. To secure their independence, they actively strive to grant autonomy to committees like remuneration committees and be proactive about maintaining the board’s autonomous position.
Now, I may just be too harsh on them by discounting the fact that CEOs are usually the best of the best and have an acute awareness of the potential conflicts of interest. Indeed, many do proactively grant this independence to, say, remuneration committees and the board member that runs it. But that requires a CEO who is, in a sense, almost Renaissance-inspired in the way they run the organisation: they open themselves up to challenge, give others the respect they want for themselves, and grant as much autonomy and independence as they can. They invite candour and embrace transparency as the watchword of their board and management teams.
A lack of candour can be disastrous. If the board starts to feel that they’re being selectively told what’s going on, then the committed members only have one choice, which is to go behind the CEO’s back and start digging around one level beneath them to find out what they can. That destroys any sense of team spirit for the board and breeds distrust and deep suspicion; this isn’t a productive way to run any organisation. Therefore, candour and transparency are key; and often, when they’re absent it isn’t necessarily a case of malintent. Usually, it’s just human nature as most CEOs are convinced that if only they can get their arms around a problem they can solve it and would rather go to the board with a problem solved rather than a live question. The best CEOs recognise that the board is there to help them with their wealth of experience and tap this resource.
Beyond this pivotal difference, the two systems align fairly closely. Emerging trends such as the evolution of corporate social responsibility into ESG further contribute to a global convergence. This convergence is also recognisable when you look at the things courts and regulators are looking at; this isn’t necessarily surprising, but it is nevertheless significant that we’re seeing it.
As chair, what is your golden rule for the boardroom?
My golden rule, summed up in one word, is “respect” — not as a noun, but as a verb in its imperative form. I have a favourite quote from a lesser-known mid-19th-century French philosopher, Henri Arielle. He wisely stated that there can be no respect for others without humility in oneself — and I wholeheartedly agree, there’s no room for ego in the boardroom.
“My golden rule, summed up in one word, is “respect” — not as a noun, but as a verb in its imperative form.”
Applying this to a chair’s role, holding “respect” as the golden rule translates into a fundamental respect for people in the room, beginning with their time. I start and finish meetings punctually, covering agenda items efficiently within the allotted time; this isn’t just a matter of EQ, it manifests in practical aspects. As a chair, part of my responsibility is to observe and catch non-verbal cues—those unspoken expressions that indicate a concern or disagreement. It’s about being attentive and curious, drawing out hesitant responses to understand what’s behind them. It’s only when people around the boardroom table feel that they are fully and truly respected that they will be their best; and, when delivered properly, that respect helps greatly in fostering loyalty and also helps you to attract the best people for the board. After all, the last thing anybody wants is to work somewhere you aren’t respected.
