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How to build better boards

25 July 2017 by Peter Swabey

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Peter Swabey, ICSA Policy and Research Director, discusses developments at the Annual Conference.

It was good to see so many members and friends at this year’s annual conference; it was a great couple of days.

I thought the quality of speakers and presentations was exceptionally high throughout the whole event. My thanks to everyone who contributed to the sessions, whether as a speaker or member of the audience.

The theme for the conference was ‘stronger governance, better boards’ and some of my highlights included Lord Owen on the dangers of hubris, Paul Stanton on board dynamics, and Lady Judge on the differences between governance in the UK and US.

I particularly enjoyed Lady Judge’s analogy that US governance is based on the cowboy model – you can ride as far as you like in any direction, without restriction, until you get to a ‘fence’.

She contrasted this with the UK ‘gentlemen’s club’ model, where everyone (supposedly) knows how to behave, and behaviour is kept in check by a code of conduct, rather than a physical fence.

The two systems of governance may be similar in many ways, but there is a distinct difference underpinning how they operate in practice.

Another highlight was Professor Andrew Kakabadse’s keynote, in which he launched our new research into tension and conflict in the boardroom.

Andrew discusses his research elsewhere on the site and I commend it to your attention as, once again, it emphasises the importance of the role of the company secretary in ensuring board effectiveness.

The opening panel on corporate governance reform – chaired by Vanessa Jones and including ICSA Policy Advisor Chris Hodge, Kerrie Waring of ICGN and Paul George of the Financial Reporting Council – contained some interesting debate.

It was fascinating to hear Paul George share some of the FRC’s thinking behind the future of the Corporate Governance Code, even if he did give the wrong answer to Simon Osborne’s question about embedding the role of the company secretary. We shall keep pressing on this.

Elsewhere, we took the opportunity to launch a new research project, in association with Board Intelligence, at one of the breakout sessions. The project follows on from our guidance on minute taking and looks at the information that goes to the board.

I remember in my early days of working with IT being introduced to the acronym GIGO, or ‘garbage in, garbage out’; the quality of the information on which the board bases its decisions is of critical importance in organisations of all kinds.

We have to consider how good board papers are, how many pages the typical board pack runs to, and how much time the board has to read them.

“I confess some scepticism about whether all directors fully take in the contents of the board pack”

Board Intelligence did some research last year, which identified the average length of board packs as just short of 300 pages, while we heard some run to more than 1,000 pages.

I confess some scepticism about whether all directors fully take in the contents of the board pack, and whether it is reasonable for us to expect them to do so.

We collected a good selection of initial data from attendees at this session and will be working on the project throughout the year with a view to publishing guidance at next year’s conference.

One final observation: in our guidance on minute taking, I make the point that company secretaries should think carefully about how long they keep their notes of meetings, and recommended that these should be destroyed as soon as the written-up minutes have been approved by the board.

I think some have thought I was worrying unnecessarily about the notes being subject to disclosure in court and thereby creating a possible alternative version of events – ‘alternative facts’ if you like.

I was struck the other day to read that the Information Commissioner has permitted a request to see the judge’s handwritten notes from an industrial tribunal under the Data Protection Act. Perhaps this is a more significant risk than even we realised.

Finally, the policy team is starting to pull together our priorities for 2017/18. We expect to have plenty to do as the output from the Government Green Paper moves through the legislative and regulatory process, while at the same time reviewing our existing oeuvre of guidance notes and looking to add more.

We are also preparing the second of our ‘future of governance’ pieces, this time on governance in sport, and have our work with the Investment Association on getting stakeholder views into the boardroom.

That said, we do not have a monopoly on ideas and would be delighted to hear from anyone who has suggestions about what we should include at the usual email: policy@icsa.org.uk

Peter Swabey FCIS is Policy and Research Director at ICSA: The Governance Institute

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