Baroness Dambisa Moyo - Boardroom surprises: black swans, dual-track strategising and marketing yourself as an unconventional board member

🎙️ You can listen to the full podcast interview with Baroness Moyo on Apple Podcasts, Spotify and YouTube.

Baroness Dambisa Moyo is a current board member of Chevron and Conde Nast, investment committee member of the Oxford University Endowment, and co-principal of Versaca Investments. Join her and Nurole CEO Oliver Cummings in a conversation which covers:

• Which of your boardroom experiences have been the most challenging? (1:44)
• How do the best boards deal with uncertainty and risk? (4:31)
• How do you think about the Risk Committee? (12:43)
• What do you know now which you wish you’d known when you first entered the boardroom? (14:32)
• How aligned are board members on the role of the board? (16:28)
• What have you learnt about adding value across strategy, CEO succession and culture, which might not be intuitive to an experienced executive? (20:02)
• How can people from non-conventional backgrounds best position themselves for board roles? (22:06)
• Should boards have strategy and audit sub-committees? (24:57)
• What is your dual-tracked approach to strategy? (29:35)
• You once had four CEOs in six years - what did you learn? (34:13) 
• What is the remit of ethics committees? (36:48) And
• ⚡The Lightning Round ⚡ (40:43)

*This is an AI-generated transcript and contains inaccuracies*

Oliver Cummings: I really enjoyed reading your book. One of the things that jumped out at me at the beginning was you wrote about your experiences of the most extreme and testing situations in the corporate world, including the death of a chairman.

CEO succession, both hiring and [00:02:00] firing. M& A situations, regulatory fines, activist shareholders, insider shareholders on the board. Expropriation of assets by governments. Which of those was the most challenging and why?

Baroness Moyo: Well I very fortuitously have not encountered a bankruptcy.

But when I look at that list, really in a 15 year board career, it's pretty harrowing. Death of a ceo, etcetera. But to my mind, really rather than pick one I'll give some examples in a moment. I think really the theme that dominates challenge in a boardroom is surprises.

It surprises because the financials that you might have put together in terms of how you expect revenue to increase or expenses to be managed or even reduced. All that is up for grabs in a crisis environment. How you operate, the processes of an organization are tested when you have a surprise.

And also just the culture of an organization, how an organization operates, how people [00:03:00] link into each other also is put under pressure when you have a surprise. Obviously, We can count on. You've just gone through a number of what I would call largely endogenous surprises. So these were things that were quite specific in particular to the boards that I was on death of the CEO, etcetera.

But there are real examples of exogenous surprises like the pandemic. If you look back to 2020 in January, I was attending Davos, the World Economic Forum there were lots of rumors in January, about the likelihood of a pandemic.

But it was very hard at that time to calibrate what that might mean. And if you think about it, just a week or two after that, I had board meetings in which we we're endorsing the plans of forecasts for 2020 that January. And of course, by mid March, the world had completely changed.

And in all those aspects that I've already highlighted from the financials were being challenged. How are we going [00:04:00] to generate revenue? How are we going to keep costs down? Managed from two operations. Are our employees healthy? Can we operate from people being at home? And all the other aspects around and questions around culture all emerged and became incredibly challenging.

I just picked the pandemic, but there are many other examples of exogenous things that can happen. Geopolitics is another one. One day you have 20 percent of your revenue coming from Russia. the next day quite unexpectedly, you have to pull out your resources and shut down the operation.

There are many of these types of examples. So both exogenous and endogenous, but ultimately it's about the element of surprise and how it challenges the financials, the strategy, the operations, and the culture of an organization. 

Oliver Cummings: I've heard some people challenge boards saying there should be. No surprises as a board you should have if you've got the right mix of people around the table You should be able to anticipate everything 

now I've never bought into that as an idea and I think one of my favorite I think was in super forecasting where they [00:05:00] included a excerpt from One of the intelligence agencies basically predicting the next 10 years over the course of a century and showing, how they were almost diametrically wrong every time with their predictions.

And I think it, it goes back to that, I think Terry Smith has said there are two sorts of investors, those who know they can't predict the future and those who can't predict the future. How do you think about. Navigating that uncertainty as a board member.

Baroness Moyo: So there are two elements to your question is what I would call uncertainty.

And then there's risk. And this is the 19 uncertainty kind of philosophy, which is that if it's risk, it can be managed. We can debate back and forth about not only calibrating the cost of the risk, but also thinking about the timing of the risk. 

People who say, oh, we can actually, to the nth degree, predict risk. I don't buy that. I think you could say, well, pandemics seem to come every hundred years. Maybe there was due for a new pandemic, [00:06:00] but even then would be very hard to thread the needle on when exactly would occur. But more than that, how the system not just financial operations and strategy, but also the culture of an organization could adapt.

Before, The pandemic hit in earnest in March 2020. I had no visibility around zoom or work from home. And I tend to sit on audit and risk committees for all the boards that I've been on in the past 15 years. And we didn't have a scenario where people would be at home.

And there'd be a pandemic, which for the first eight to nine months, there was no resolution. There wasn't a vaccine or there wasn't a path forward. During that period, I wrote an article. For Harvard Business Review talking about what how board should respond and what they should be thinking about.

It was fact it was entitled 10 things boards should focus on during a pandemic, and it was really about the tactics. Focusing on things that were sort of emergent [00:07:00] and an emergency. Where are people? Are they safe? Are they infected? Are they not? What about our supply chains? Those are things that were in the immediacy.

In your face, and then there were longer term issues that were materially changed by the advent of the pandemic. Things like, what is our strategy now? Are some competitors that may not have managed their financial systems in a disciplined way may have become vulnerable in terms of takeover targets.

So there are a lot of things that emerged both in the tactics, short term response as well as the longer term strategic response. And as I said earlier, you can really think about having systems that could forecast all of those things. We had no idea when it would hit. We had no idea what the response would have been.

Was it going to be global? Most big boards that have been privileged to sit on have global operations, different countries, different approaches. Indeed, just being in the United States, the states had different approaches. Some of them were [00:08:00] more red states. didn't have the lockdown quarantines.

The more blue states of California were very strict. So these are things where there was no way to anticipate those things. But then most importantly, it's also very hard to anticipate the response of the culture and the, of the organization. You want to defend the culture, but was it the case that a lot of that culture was linked to being in rooms together and seeing our colleagues.

And how do you defend that culture when people are much more disparate? So I'm a little bit skeptical about people who think that they can do it, risk management to the nth degree. What I will say and this is a counsel I've received from a very wise 87 year old board colleague of mine who said, Listen, you know, we're always going to be surprised.

And I think that's a very good frame. And that's where I started the conversation today. And if you as a board member, as a CEO, as a management team think about life that we're always going to be surprised and sure you do have to risk mitigate. For those types of scenarios. And you have to then decide based on [00:09:00] judgment and your own experiences.

What calibration? What probability you ascribe to certain scenarios happening. But I think ultimately his counsel that doesn't mean hide under your bed. It means be prepared for these scenarios that could emerge and when they emerge, make sure that your financials, your operations, your processes, your culture are able to stand up for whatever that surprise may be.

Oliver Cummings: Can you give me an example in practice of what that means? 

Baroness Moyo: In fact, it's interesting because serving on audit committees and risk committees that is really the mandate. And traditionally certainly in financial institutions, risk and audit used to be one committee. And the whole point was that, Risk would look to the future and say, okay, what are our risks?

We're risk we have risks that the macroeconomy is going to slow down And interest rates would be higher if interest rates are higher Where are we making our money probably not from lending because it's too expensive for borrowers retail or institutional to borrow but, we might make our money from [00:10:00] some other, investment opportunities So you start to work through what those, what those forecasts might look like.

And in the event that, as we saw in 2008, 2009, that things become incredibly challenged, you have a plan. To to mitigate and to basically manage through employee numbers, employee roles thinking about what your cost income ratios look like, how much money should you be generating in those types of scenarios.

Again, that's more on the financial side. And then we have literally developed out plans. I'm thinking about where our people are deployed. In many instances, just to be clear, these, especially in the financial industry, these are mandated. So the regulator will say, I need you to have a backup plan so that if there were to be a cyber breach, we know that if there is a breach that you were going, the top five employees are [00:11:00] going to meet at this X location, and we're going to get off of a broad based Internet system and we'll use a much more siloed system.

So these plans are actually in place whether it was a financial crisis or pandemic, there were rollout plans. And I think the thing about the surprise is that there might be elements. of that surprise that mean that your plans may not be as versatile as you might want them to be. But we've had so many examples of this.

We've had the LIBOR issues when I was on the Barclays Bank board. We've talked about the pandemic, and I've given you some examples on geopolitics, where you're managing a team of people who work in Russia and all of a sudden they can't, or even let's take a more recent one, Israel. Where you have operations and people can't get to work they're living in very different different conditions.

How do we play a role as an organization not just in terms of providing support in Gaza and Israel for to our employees in terms of [00:12:00] humanitarian aid or counseling, but also for people who want to leave. What is our role there? So there's a lot of detailed planning, and then I thought that's really focused on the risk side.

Very quickly on the on the audit side. If risk is looking forward, audit tends to look back. You look at what worked, what didn't work lessons learned again, heavily regulated in the U. S. With the S. C. C. But companies house in the U. K. You do have a lot of guidance on how to deal with cyber attacks.

And and we use a lot of what the regulatory environment Provides us, but also dealing with peers and colleagues in different organizations, different sectors, but also different organizations in the same sector to try and get a better, better sense of how to deal with challenges. 

Oliver Cummings: we have this online community where board members can come and do these mastermind groups and exchange the challenges that they're facing with each other. And interestingly, We had a discussion recently around the Risk Committee and the person facing this challenge said it is the most painful of all the committees, [00:13:00] it has the longest papers that I get anywhere, I don't get compensated for it, like am I mad to be doing it? How do you think about the Risk Committee? 

Baroness Moyo: I love the risk committee, I must say, but it's kind of, I think I can see why it's in people's nature. I remember something of Professor Rudiger Dornbusch, Who was an M. I. T. Professor when I was studying at Harvard many, many years ago, and he said the thing about crises is that they always show up later than you anticipate, and they always show up much bigger than you could anticipate.

And I think one of the challenges of being in the risk committee is that it's very hard. To talk about risks that people aren't already aware of. So if I said to you, what are the risks of the British economy, or what are the risks of company X, we'd all have the same list and say, Oh, it's growth, slowing cost of living.

political uncertainty from geopolitics, but political uncertainty also from local politics, we [00:14:00] would have the same list. But the thing is, it's not, it's not the things that we know that hurts us in a way. It's the things that we don't know that we haven't properly calibrated for. And it's that scale of a problem.

I can tell you, oh, there is likely to be another pandemic. Sure. How big is it going to be? Is it going to be like SARS or bird flu or is it going to be like COVID 19? Couldn't tell you. And then also I couldn't tell you when it's going to happen. So this is where I think people can see the risk committee as being navel gazing in some respect, but I actually really enjoy it.

Oliver Cummings: Fantastic. You have obviously been through an amazing range of experiences there, and you were obviously very experienced when you started on that journey, but what is one thing that you know now that you didn't before that you would share with others at the start of their journey?

Baroness Moyo: I think the most important thing is to be open minded.

And I know that sounds almost like motherhood and apple pie, but I think too often people come [00:15:00] into a boardroom into most situations, but particularly come into a boardroom with very detrimental consequences of being quite ideological about how the world works, what's important, how a company should evolve.

And I think there's not enough listening that occurs about the differences in different regions. There are numerous examples of this and that we've seen. I'm thinking something that popped into my mind is a number of companies who are Western companies that were operating in places like India or elsewhere, which are very different cultural norms, felt, well, we're a big company, we're important.

And. We're going to go in there and we're going to change the cultural landscape. Hard to do and probably not listening enough doing too much dominating, but there are numerous examples of that in geopolitical space. Thinking about how do you operate as a country or as soon as a company that is in a country that is democratic and market capitalist, [00:16:00] but you want to open up offices in a place like China.

Yeah. Which is state capitalist and and a deep prioritized democracy. How are you actually going to run operations in that environment? I think too often people go to these situations think we're going to change them or we're going to exert our view. And so ultimately, my fundamental point is too much ideology in the boardroom is incredibly dangerous. And I think that The, worst performers in a boardroom are far too ideological and not open-minded enough. 

Oliver Cummings: I love that. I was just listening to a podcast around how to ask better questions. One of my key takeaways from it was, The key is having curiosity at the root of your question, because too many questions have an implicit criticism, or a quidgestion, that's a suggestion embedded in the question, and it feels that that very much resonates with what you're saying there.

 I want to move on to talk about the role of the board. In how boards work, I thought you did an amazing job of boiling down the essence of the role of the board down to these three core areas. [00:17:00] Shaping company strategy, selecting leaders, in particular the CEO, and safeguarding the company's culture, ethics, and values.

In your experience, how aligned are board members in the way they think about the role of the board?

Baroness Moyo: A couple of thoughts come to mind in terms of your question. I think, first of all I didn't necessarily whip up these ideas myself.

In the license to trade permits that corporations or companies get from company house or from Delaware LLC listings, as it's commonly done in the U. S. corporations. There is a de jure explanation for what the roles and responsibilities of board members are. And it's from that where I really derived these three points.

The second point that I would stress is that, some aspects of strategy CEO succession and ethics. Is quite static in nature. People will say, Well, boards, what do they really do? They're only useful when there's an emergency or there's a [00:18:00] crisis. And actually, if you look back in history to the 17th century, 18th century, when the first boards were established, it's true that they've always tended to focus on strategy and succession planning as the first two really key pillars of the board role.

I would say the cultural thing was. I don't want to say after facts, but it wasn't really Something that was explicitly embedded in the remit of the board. And that has changed. We saw that with some of the new rules and regulations that have come out in the last several years on ESG in particular, but more generally about board members thinking more about stakeholders and widening or expanding the utility function to not just focus on financial stakeholders or financial shareholders, but think about.

stakeholders more broadly, employees, community, et cetera. And so in that sense, there's been some innovation in the board role, not just on strategy and succession, but now we've added in this [00:19:00] values piece. And it's less so about the North star that every board member says, yeah, totally get it.

We're here to do succession. We're here to do strategy here to culture. It's more about how you execute, how do you actually get The best CEOs. Is it a peacetime scenario? Is it a wartime scenario? How are you picking your CEO? How do you think about the strategy of the company?

Is it about allocating the marginal resources investing in R and D in the company or is it expanding a footprint into a different region? Those types of questions really continue to challenge the legalese that says, We're about succession strategy and culture.

We're in a different world now. How do we do culture in a world that's much more heterogeneous and culture has changed so much. How do we think about strategy in a deglobalizing versus a globalizing world? I mean, it's all aspects of change of the board mandate. [00:20:00] Although at its roots, it stayed the same.

Oliver Cummings: What have you learned about the value that you can add as a board member in each of those areas that might not be intuitive to a highly experienced executive?

Baroness Moyo: I like this question a lot because I am I call myself a non conventional board member meaning when I joined my first corporate board, I had not had a senior position as an operator.

I have not been the CEO of a company or CFO of a company. And if I look around today, I think the rule of thumb is that the best boards have probably around 40 percent 40 to 50 percent of their board members are operational people. People have clear operational experience. in finance and CFO or CEO, et cetera coming onto a board.

But that has changed when I joined my first board in 2009, I had no experience in the operational side. And I was very much unconventional, very [00:21:00] rare to have someone with my background at that time, but it's changed because the world has become more complicated. The things that I have focused my life's work on, on geopolitics, on investment, thinking about exogenous space.

Threats and challenges that public policy has to navigate A. I. Climate, et cetera. Are things that an operational person would be aware of, but perhaps it's not as deeply involved in terms of their network in terms of how they think about framing that as someone like myself. And so in that respect, I think there is still a core set of board members Who's expertise is very warranted and very important coming from an operational background, but more and more.

I think it's clear that people like myself who come from non conventional backgrounds, but have an important perspective. To bring to the boardroom are seeing and [00:22:00] finding finding a way to add value to these organizations that are very complex and challenged world. 

Oliver Cummings: For someone who comes from that non conventional background how do you think they can best position themselves for these board roles?

Baroness Moyo: I think there's no substitute for hard work. I mean, I have written five books in the area. I definitely have leaned in to try and make it clear, if not by maybe I wasn't speaking the words, but definitely showing that this is an area of expertise that I believe I have.

But as a practical matter, I think too often people say, I want to be on the board, but they haven't really asked a fundamental question, which is who in the executive management team is going to call you. Because I think that is a very good hurdle. It's a very good lens to think about your value to an organization.

So, if you come from a marketing background, for example I would be expecting that the chief marketing officer should call you occasionally and [00:23:00] say, Hey, listen, I'm looking about at this campaign, or have you ever seen this type of thing done? What do you think about new distribution channels on social media or whatever the question might be, but they should see value in reaching out to you whatever your expertise is.

As I mentioned. I happen to end up on a number of boards that had massive geopolitical risk, particularly coming from the emerging markets. And to this day, get phone calls from the CEOs, but also from teams who are doing risk management, as well as thinking about investment and planning for the organization.

They're the ones who tend to call me sometimes the CFO, because I'm on the audit committee, they're the ones who tend to call me. So that is the guiding or North Star question, before you say, I want to be on a board, maybe ask yourself who from the management team is going to call me. If you're a technology expert, you want the CTO.

of the company to call you or the person who's in charge of cyber risk. If they're not calling you or if you're not seeing what's important to that person from reading the annual reports, then you're probably [00:24:00] are not going to be adding as much value as you might think. And look, I'm the first person to put my hand up and say, I've been in many ways, quite a generic jack of many trades, so to speak.

And I think it is a higher burden on, The individual to say, Hey, I know I've done X, Y and Z. But really, this is what I'm bringing to the table as a perspective on emerging markets. I've been fortunate enough, for example, to travel over 80 countries developed, developing rich, poor, democratic, non democratic.

And so being able to say have worked in these places, we're looking at this lens of value in one way. But if you're sitting in an authoritarian state, They might be looking at it in a different way. Those are the kind of kernels of value that somebody in an operational position may not have and where you can really market yourself as having unique expertise that could be value add.

Oliver Cummings: I Love that. That feels like a brilliant North Star question, not [00:25:00] actually just for candidates, for boards as well. Who on the executive is going to call this prospective board member? You put forward three areas where boards need to be better that related to those core three areas. Renewing their approach to strategy, upgrading their succession planning, and introducing an ethics committee.

I'm keen to explore those ideas further and maybe we can start with strategy. You advocated having an ethics committee focused on safeguarding the company's culture and values. Should there not be a strategy committee given its importance for the board's growth? 

Baroness Moyo: The reason strategy committees are not devolved into a committee is because of the board is because the board in its entirety jointly. is responsible for strategy. That is one of the rules of the boardroom. And so therefore, it actually behooves the institution to have a board that understands that [00:26:00] strategic especially in a time when CEOs and management teams can get very easily seduced into the short term quarterly reporting, et cetera.

You want to make sure that there is a place where that is representing stakeholders, financial shareholders, and other stakeholders That is looking beyond just a quarter here, a quarter, , two quarters ahead. And to me, that is a responsibility of the board. And I think it's also really important that the that we that the board is able to bring all its talents into the debate around the strategic path of the organization.

So I actually I'm not a great big supporter of subcommittees. In general I've been convinced of their relevance in certain situations. But I think something like strategy must remain at a board level, complete and full board level point. And I think that that's the best way to do it.

Oliver Cummings: There was a recent discussion in one of the mastermind groups that I mentioned earlier where they were talking [00:27:00] about Audit committees and how actually often well, obviously it is in a committee and it's delegated but at the same time all board members have responsibility and increasing Responsibility for that and yet if they're not on the committee, it's uncomfortable balance to strive at.

And I guess the reason why people have committees is they can be more effective. It's that two pizza teams or smaller teams get more done at the cost of less cognitive diversity. So why do you think the audit committee is, why does that need a dedicated committee? Or perhaps you don't? 

Baroness Moyo: When you've been in has a long 10 years. I have in these boardrooms. You've heard the everything should be at the board level. No, everything should be devolved. So I get both arguments. I think fundamentally, The responsibilities of the audit committee, as I mentioned to you a moment ago, are backward looking. And a lot of the audit committee responsibilities are governed by regulatory oversight government of government agencies like the security exchange commission, like the FSA or [00:28:00] FCA in the UK.

And that means there's a particular type of expertise that tends to populate the audit committee. People who are financially literate and by that I mean they tend to have audit experience or accounting experience, they understand the nuance of debits and credits, et cetera tends to populate that committee.

So a very particular type of expertise. If you're going to do SOX reporting or Sarbanes Oxley reporting, or thinking about gap accounting these are very technical Accounting and audit financial terms that it really must should be devolved to people who've got that expertise, which is why it tends to be devolved into a specific committee.

The vulnerability of the board writ large to Things that happen in a devolved committee then come up for signature is true. And I'll give myself an example. I don't have a tech background. And yet technology, [00:29:00] whether you're thinking about generative AI or you're thinking about just ways in which you want to enhance the operations of an organization or the risks that emerge from cyber are absolutely critical to the survival and success of a business.

However, having somebody who's got a tech background reporting, even a tech board member reporting to the board, I have to rely on their good judgment and their knowledge. And sure, I can do as much research or training to get up to speed and lingo, but there's nothing that beats experience.

And so there is a lot of work that has to be devolved. Some of the stuff that gets devolved is much more instinct based, and I'm not at all being disparaging, but nominations and governance, I think, are things where you don't necessarily need somebody who has spent a lifetime studying nominations and governance.

Nice to have, but it's not critical, whereas something like audit is very technical and the devolved nature of that committee, I think, is, is very [00:30:00] justified. 

Oliver Cummings: Was discussing your dual track proposed approach to strategy, which I thought was really intriguing, with a board member who instantly scrunched up their face with skepticism. Can you just explain what exactly you mean by that dual track process? And also, have you seen it working in practice

Baroness Moyo: ultimately in a very competitive world, For market share, for capital for talent the best thing any organization can do. And by that I mean a government, a school, a university, a company is to try and get the best talent to contribute to the organization's continued operations.

And having a dual track, which essentially for our purposes are summarized as not just having the board. Essentially rubber stamp a fully baked strategic plan by the management [00:31:00] team, but instead have the board have a competitive is not the right word, but an alternative go at what are the important aspects of strategic change that the business should be thinking about.

Where should we be operating? Which regions? Where should how would we think about geopolitical risk? How do we think about technology? How do we think about climate? And then having this meeting of the board, which has a lot of talent with the management team to debate what this is, what the strategic plan might be, I think is net value positive.

And so that was really the point I was making, because I think we could, in principle, lose a lot of talented perspectives. If we just say, well, it's just the board, we'll just show up with a fully baked report and just need them to rubber stamp it. Well, then you're missing out on the perspectives and experiences of some very talented, smart, you know, operators and thinkers.

And that was really what I was getting at. Like, how do we further draw [00:32:00] out the, without the board being tainted by what the management thinks already how do you further draw out Some of the talent and expertise and experiences of those board members. Have I seen this in play? Yes, I have. Of course, it's it would be in the United States because they love innovation.

They're always tinkering with the with it in the U. S. You know, it's clearly not slam dunk, but we see much more red teams, green teams. At the board level before they have this strategic session with the full board and executive. It's also been discussed with proxy agencies like ISS and Glass Lewis, and there are others that have talked about what more can the board be doing to make sure that we're tapping into that talent.

Oliver Cummings: I had a discussion with another podcast guest, Roger Martin, where he was advocating a set up it was cutting through both the exec and non exec. So effectively had one team focused on coming up with one strategy, but it included a combination of execs and non execs, another on another, and another on another, and then [00:33:00] they would go up against each other.

Baroness Moyo: Fundamentally it's about innovation. So I don't a priori say it, my way is the only way. I think it's great to debate what the pros and cons of these different approaches are. But I wouldn't just squirm my face and say it hasn't worked. And that's not a good enough reason just because it hasn't worked doesn't mean it might not work or at least.

Some of the things that are being challenged, the status quo that's being challenged by having these ideas I think is something we should be debating. I think boards themselves should be debating. And we constantly debating tenure with debating, populating boards, what kind of people do we want?

Why not better milk out the value of these boards when they're there? There's so many talented people and more and more, the age is getting younger. So If your job is just seen as rubber stamping and you're, I joined my first board when I was 38. Why do I want to have a lifetime sitting on a board where it's just rubber stamping?

I prefer to get tapped. To add more value, offer more of [00:34:00] a perspective. What are your experiences you were in DA with? What were people saying about the pandemic you are at a conference with Sam Altman talking about generative ai? Bring that to the strategic discussion.

I think that there, there should be avenues for that in the boardroom.

Oliver Cummings: Let's talk about succession. And in terms of CEO selection, you referenced your experience on one board of four CEOs in a six year period.

Baroness Moyo: I think people listening to my bio will be very obvious. So I don't think i'm breaching any confidence This is a public thing. So it was barclays bank And I would say the biggest learnings is that a board has to take in a lot of exogenous and external input into who they're picking as a CEO.

You know, you ask regulators, you ask government officials. You want to get a sense of the man, as we used to say. I'm sure that's not even allowed to say anymore, but I'm of a different generation, I've got fantastic friends who are [00:35:00] CEOs, such as Emma Walmsley, Dame Emma at GSK, but many others.

And you want to get as broad a. How do they engage? And I think really being able to tap into a broad array of sources back channeling is great on paper, but it can be quite dangerous if those same organizations or people feel that they have a greater say in who a CEO might be.

So to put it simply, you could be in the danger of putting a certain type of person into a seat simply because the regulator, who of course does govern license to trade for the business, you know, you want to make sure that you're all on side, but if their motivations for having a certain type of person or certain person in the situation as CEO dominates [00:36:00] your choice.

And it's against what the board might think or people on the board might think is the best candidate. It's those type of exogenous or external input whether it's I just have regulated it, but it could be shareholders. Those types of input, while welcome, I think should not dominate the ultimate decision.

And I think that is a big learning. Ultimately, you're the board, you should have the final judgment, you should have the final perspective, and you should not be ramroaded by shareholders or vocal minorities, and I don't mean literally minorities, but smaller groups subgroups in their employees or shareholders or NGOs or regulators.

Oliver Cummings: Let's talk lastly about ethics. One of your suggestions was for a committee, despite your concerns around committees in general, you're advocating that boards should have an [00:37:00] ethics committee. How should those ethics committees be guided?

One of our past podcast guests, Professor Andrew Kerkabadze, argued the reason that boards have got into trouble is because they sometimes try to make ethical decisions. And that there is no absolute right answer and so it brings in this complexity. What's your approach to that?

Baroness Moyo: I think anything where the board is now taking on moral decisions and opining on what is right or wrong and not saying we don't have values. That is absolutely warranted, but it can go too far if we start deciding that there's a moral stance that the company should be taking that beyond this cultural values.

So I agree with that. But notwithstanding that, let me just start by saying the reason I was proposing a ethics committee is that we are emerging, continue to emerge, I should say, from a period where many CEOs, I believe in the book, I talk about hundreds of CEOs and CFOs and even [00:38:00] board members were removed from positions for ethical violations.

This is whether it's me too. Unfairness, whatever. Take your pick. Sometimes illegal behavior, but illegal behavior is almost easier to police. If somebody does something that's illegal, you've just fired them. No problem. But things that are shades of gray or where there's not really good transparency from the board.

I think those are the ethical questions that I was referring to. And we've had hundreds of people lose their jobs for that. And when we interview for CEO candidates, traditionally we have probed and pushed them on their financial expertise. We've asked for examples of team management. We've asked them, how did you grow revenue?

How did you reduce costs? How did you build teams? How did you get promoted? Think about pay and promotion. We've asked them all these questions about financial aspects. The operational aspects, processes of running a company. [00:39:00] We've even asked them strategic questions. How do you think about investing in China versus India, given the sizes of these populations. Those types of questions, but we never asked ethical questions, which seems completely upside down if ethical questions are the reason.

A large proportion, hundreds of people. CEOs and CFOs are losing their jobs, then we need to do much more to investigate and evaluate the ethical stance of those without again, judgment. I'm not saying if I am a conservative, more Republican type of Board member. I will never hire somebody who's more democratic and liberal.

I am not saying that at all. That should definitely be out of the boardroom. What I am saying is these ethical questions of how to manage teams of diversity. Think about transparent measures to manage the process of fairness and [00:40:00] transparency on compensation and promotion.

Those types of ethical questions need to be managed much more aggressively. We manage financial reporting with the CFO. We manage strategic and operations with the different business managers of these different units. Where is the ethics being policed or managed? And by the way, it's not against static.

We need some portal that allows us to continue to evaluate, but get better at this ethical muscle, and traditionally it hasn't been a natural place to evaluate ethics in newcomers, a CEO coming in or succession planning but it also hasn't been traditionally a way of even evaluating board members, the ethics of board members.

Oliver Cummings: Don't divide the time has flown by, which means it's time for the lightning round, where I'm going to say a short statement and ask you for a quick response if you're ready.

Sure. Bordering behavior that irritates you most.

Baroness Moyo: When one board member repeats something another board member has said and they make it out like to be like it's new. Many [00:41:00] women I'm sure wherever they are will be nodding their heads because it does tend to be a gender thing.

Oliver Cummings: Favorite quote

Baroness Moyo: A quote of one of my best friends, who's the chair of Starbucks Melody Hobson is the numbers. Don't lie. So I am a numbers girl through and through.

Oliver Cummings: Most significant professional insight.

Baroness Moyo: Not everybody is trying to get you. I worry a lot about the younger generations. Everybody's so skeptical and so cynical. Somebody's trying to take me down. Some of the most successful most incredible opportunities that I've had in my career have come from people who don't look like me.

Men, white, different countries, different backgrounds and I think remaining open minded to those good things that can happen. Just, you know, erring on the side of not naivete, but, being constructively positive, it's been a game changer for my life and my career.

Oliver Cummings: What have you changed your mind on about boards over time? 

Baroness Moyo: I came into the boardroom probably thinking people with operational [00:42:00] experience could be less than 40 percent of a board. I'm now more inclined to say that they do need to have a bigger proportion of the boardroom.

Oliver Cummings: What are you invested in and why?

Baroness Moyo: Definitely in the future, which means technology and Energy transition. Definitely. I love investing in things that are fundamentally going to change not just consumerism, but also public goods, education, health care, how we interact, all these types of things.

Oliver Cummings: And lastly, three things our listeners should take away if they take away nothing else from this podcast

Baroness Moyo: First that there are opportunities abound for people who have unconventional backgrounds in the boardroom.

So brush up your CV, think about what you would add value on. That's one. The second one is the most important thing in the boardroom is having good judgment. I've already made this point. Judgment to me means do not be ideological. You're never going to be a value added board member.

If you come in pounding the table, this is the way the world is. There are ways to do it. And there's a lot of learning that should, you should invest in. to make sure that [00:43:00] you're articulating your views, but in a way that's constructive and may not be adopted by the board, by the way.

And then the last point is just really thinking about process versus outcome. This is a very delicate balance. I think very often it's very tempting. Oh, this is what we're going to do in terms of outcomes. But we should also think about process without having to getting into bureaucracies and layers and layers of people thinking about how do we balance, getting outcomes, getting goals achieved, but at the same time thinking about how do we do that?

Oliver Cummings: Dr. Moyer, that has been such an uplifting and energizing discussion. Thank you so much for taking the time to share your wisdom and experience. It's been a real privilege.

Baroness Moyo: you so much. I'm really delighted to participate.

🎙️ You can listen to the full podcast interview with Baroness Moyo on Apple Podcasts, Spotify and YouTube.