Nov 7, 2023 Nurole logo
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Becoming a Chair (part one): preparing for the role, managing stakeholders, developing strategy and hiring the right NEDs (Roger Parry, Oxford Metrics, YouGov, Future Publishing Chair / former Chair)

🎙️ You can listen to the full podcast interview with Roger on Apple Podcasts and Spotify.

Do you aspire to Chair your board? Or better understand how your Chair thinks? Uber NED Roger Parry sits down with Nurole CEO Oliver Cummings to reflect on his 20+ years chairing global organisations like YouGov and Future Publishing. Tune in to hear his answers to the following questions:

  • How do you prepare to become a Chair? (1:24)
  • What are the different Chair archetypes, and are some better than others? (3:54)
  • Can you become a Chair without being a CEO or CFO? (8:04)
  • What are the key things you learnt from your Chair mentors? (9:28)
  • What is the Chair’s role, and how should it be distinct from the CEO? (11:48)
  • How involved do you get with strategy, and how much time does it take? (15:05
  • When and where have you added most value as a Chair? (22:11)
  • Where can Chairs add value, beyond managing shareholders? (26:06) When and where have you got it wrong as a Chair? (29:04)
  • What else can you do to prepare to become a Chair? (36:43)
  • How do you hire for genuine diversity of thought, and what is its value? And (39:00)
  • ⚡The Lightning Round ⚡(46:00

Oliver Cummings: Roger. When I saw you on the guest list the thing that really got me excited was having the opportunity to talk to you about the chair role. It's one of the most common topics that comes up at our non-executive mastermind groups where non-execs who are thinking about, you know, how do they step up into that role, how should they prepare? And I thought this would be a fantastic chance to get the benefit of your huge experience and insights. So can I maybe start there [00:02:00] on how does one prepare for becoming a chair? 

Roger Parry: I think, ideally, you learn by example. So you're on a board and you watch someone else do it well, and you learn from them the sort of cadence of board meetings, how they bring people in, how they hold people back if they're being disruptive, how they manage the timing of the agenda.

And just generally how they conduct themselves. And, you know, there's broadly two ways of doing that. You may well find yourself as an executive in a company, so usually the chief executive or the CFO, and you're on that company's board and you can see your own chair doing his or her thing. And that's what happened to me. My first experience of a really good chair was when I was the chief executive of the business, and he was the kind of wise hand holding the board together. If you don't have that fortunate opportunity, then I think there's a lot to be said for taking a non-executive role quite early on in your career. 

So you can get used to seeing how the board works. And this typically would be for people in a very senior position in large companies who can have a very big and very responsible job. They can be the CMO, the CTO, something like that, but they're not actually on the board. And they may attend the board occasionally to do presentations or whatever, but they're not actually a member. 

And I certainly recommend to people that even if they think, why do I want to be a non-executive director when I'm 41 years old or something? It's worth doing if your employer will let you. And we might come back to this issue of having full-time executives on other boards as non-executive directors. 

But the simple answer to your question is you watch someone else and you hope that you're lucky that the person you're watching is a very good example and not a bad example. 

Oliver Cummings: Okay, really interesting. When I think about non-execs, I can think of different archetypes that exist, and I've probably in my time borrowed from some of those different archetypes of the things that I like or wanted to avoid from them. 

Do you have in your mind a series of archetypes of chairs that you have borrowed from, of those chairs that you've seen working firsthand that you've borrowed from and pieced together? What do those archetypes look like? Maybe, maybe if I bring that to life, you know, when I think about non-execs, I think about the CEO whisperer, the functional expert, the sector expert. That's a bit of an oversimplification, but within that, there are ways of working - 

Roger Parry: So broadly, I think they fall into two broad groups. Those who have themselves been chief executives and those who have typically—the majority, many of whom have been CFOs or have held some other functional role. It's relatively unusual. It's not unknown, but it's [00:05:00] relatively unusual to come across someone chairing a company if they haven't done one of those two jobs.

And they are different because I think CEOs tend to be (big generalization here) but they tend to be much more strategic chairs, and I think they tend to be much more - shall we say -  supportive and defensive of their chief executive. Now some, very few, make a huge mistake of trying to be a chief executive themselves and so you end up with two chief executives on the board, but they rarely get invited to be a chair twice.

And they quite often get asked to leave if that's their characteristic. So there’s the ex CEO, who's made the not completely easy transition to being a full time chair. That's one archetype. The CFO archetypes, in my own experience, tend to be more focused on the governance, the oversight, inevitably more [00:06:00] focused on “what do the numbers tell us?” And slightly less engaged or interested in “what are the competitors up to?” 

What are the issues, you know, with the human resources department? How's the technology going now? That's a huge oversimplification, but if you ask the two archetypes, they would be my distinction, ex CEOs and ex CFOs who tend to have a different way of doing things. 

Oliver Cummings: Really interesting. So is one better than the other, or are there certain situations that benefit from one versus the other?

Roger Parry: I think it's the situation. It's the type of company. It's horses for courses. So if you're in a heavily regulated industry - banking, insurance, utilities - there's probably quite a lot to be said for the CFO archetype who will be, you know, sympathetic to the whole issue of dealing with the regulatory authorities avoiding risks.

Which are associated with being a [00:07:00] regulated business, and it sounds a bit mean to say that those businesses often don't have the same need for agility and dynamism that perhaps a real consumer facing company in a highly competitive environment has. But typically the reason they're regulated is they are either actually monopolies or they're quasi monopolies or they have considerable market power which means the regulators get excited. So again, I'm oversimplifying, but the ex CFO is probably very good at that.

The ex CEO is probably better for a business that has very ambitious growth plans, driving growth through M&A, driving growth from product innovation. The ex CEO probably has a higher risk profile and fits that model better. And of course, some companies go through transitions. They don't necessarily become regulated, but a company that was, you know, very fast growing might find itself in a sort of more mature phase of [00:08:00] life where a different type of chairman is or chairwoman is appropriate.

Oliver Cummings: Really interesting. And so with those two archetypes, for someone listening to this, who's sitting on boards, who wasn't either a CEO or a CFO, should they give up hope of being a chair? Because I suppose the implication is there's something in the experience that's of value versus a skill set that one can learn.

Roger Parry: No, I definitely think they should not. I was simply responding to the question, what do you actually typically find in the field so to speak? And clearly there are very successful chairs who have not been in either of those two roles and they again, fairly typically would have been in very, very senior positions in very large companies, and then they perhaps find themselves having done one or two non-exec roles.

To be invited to be chair of something a bit smaller where their expertise is useful. And [00:09:00] I think, in my view, it's a learned role being a chair. It's not something that you are inevitably born for. It's not like some athletic prowess. You can certainly learn how to do it, teach yourself to do it, experiment with different ways of doing it yourself and hopefully become more effective. And there's absolutely no reason in my mind that you have to have been a CEO or CFO. It just happens to be that in many cases they are. 

Oliver Cummings: Okay, when you think back to those chairs that you learned from in that apprenticeship style model, can you think of three highlight moments where you saw a chair operating and went, “Ah, actually, I really like that. I'm going to take that.” 

Roger Parry: Yes, it all really comes down to one. I ended up, for reasons of accident almost, becoming a chair very early on in my career. But my first role, I was chief executive of a media company called [00:10:00] More O’Ferrall, which was largely in outdoor advertising. And it was a listed business, FTSE 250.

I was specifically brought in to, you know, rejuvenate it as chief exec, and as part of that rejuvenation, the outgoing chair And a number of the outgoing non-executives said, "We need a new chair to come in." And so I was able to be part of the process to recruit the new chair. And we got a guy—in fact, here's an example.

He was, I think, actually the managing director of United Biscuits. So in fact, he wasn't a listed company CEO, but he was a managing director of a very large [company], and he was probably 25 years older than me. And he was the first one that I saw—you know, up close and personal—who did, I thought, an absolutely outstanding job.

And I, I do remember that you're going to wince at this because it's a terrible cliché. You'll have heard this many, this one I'm about to say, many times before, but it doesn't mean it's not true. He said to me when we first got together after we'd been appointed, "You know, I have a little phrase, which was, you know, 'Your job, I admit, is to run the company. My job is to run the board, and I will never step on your toes. I will always support you until the day comes [when] you've made a mess of it. I'm the one who's going to fire you.'" 

Now, that's a fairly standard speech. I suspect you'll find it in books all over the place. He'd probably heard it from someone else, but I hadn't heard it before, and it really resonated with me at the time.

And I have used that same speech myself when I've taken over boards, and most people, sometimes they groan and [say], "Doesn't sound very original," but I think they all sort of get it as actually a pretty profound statement of the relationship between the two jobs.

Oliver Cummings: Yeah, I like that. And then I suppose it leads onto the question always of what's the role of the board. If your job as chair is to run the board, what is the role of the board, which obviously gets [to] some organizations?

Roger Parry: What they mean by 'run the board,' they mean, what he meant was 'manage the board process.' And what I would mean by it is, you know, my job as chair is to kind of curate the conversation, to manage the agenda so we spend the right amount of time on the right things. To make sure that the board doesn't become either overdominated by the executives or overdominated—which it can be—by a very pushy non-exec or two. I mean, that's the role of the chair. It's not to 'run'—perhaps 'run' is the wrong word. That's what he said to me. You know, it is—it is to manage, curate, [and] cajole the board. You're not doing an executive role, you know, and I think that's very important [to note].

By anecdote, because obviously, you know, like anyone else who's been a chairman for a long time, I get invited to all these kinds of chair lunches by the headhunters. And when you chat to your fellow peers, nearly all of them will have similar stories of, you know, one of the classic things that go wrong. And one of the absolute classic things that go wrong is when the chair forgets they're not running the company and oversteps and starts to almost issue instructions. 

And that just confuses other members of the management team because then they're not quite sure what the power structure is and who the boss is. And so that goes back, I think, to what Frank said to me. By 'running the board,' he meant really 'He'd keep his fingers out of the executive management of the company.'

Oliver Cummings: Is there a flip side to that, though? Because sometimes I've seen chairs where I felt like they haven't been engaged enough, and they've been—it's almost like when you have a manager who is only ever a coach and never a mentor, only ever asking questions. And actually, there are times when, as an exec or an individual, you want the benefit of their wisdom, guidance, and steer. So, can you go too far the other way?

Roger Parry: Well, I guess you could. I mean, yes, you could, and you do hear examples, and I guess I know one or two examples of very disengaged chairs who do literally just turn up for the board meeting and sometimes, you know, they're on three or four other boards or three or four other organizations, and perhaps they are very disengaged, and that's very unsatisfactory.

No, keeping out of the flow of management decision-making does not and should not at all mean being disengaged. I find sometimes I'm quite passionate about aspects of the business, and I have to rein myself back in, but you can certainly make a passionate speech on the board about where you think the business ought to be going, or why a particular decision is very dangerous, or indeed, why you think a particular executive is failing. 

But you're doing that in the context of a board discussion, which the executives are listening to and, hopefully, taking notes of. That doesn't mean you can't be very engaged, but what I'm saying is what you mustn't do is, in a sort of fit of pique, say to the chief executive or finance director, "Yeah, I hear what you say, but this is what we're going to do. Is that right, colleagues?" That, I think, is a disastrous situation because then you've got a chair who is overstepping.

Oliver Cummings: Okay. So let's take an example, which I've heard people on this podcast take both sides of. Regarding the strategy, you'll hear people say, "Look, it's the board's role to set the strategy of the organization." And some people will say, "Well, the chair should take the lead on that." And you'll hear others who will say, "No, it should be the execs who take the lead on that. They bring the strategy to the board to be reviewed, challenged, and ultimately approved." 

I've seen people operating on a spectrum there, some chairs who are pretty hands-on, where they're iterating with the CEO on writing literally the first drafts of that strategy, and others who are literally waiting for the finished version to come for sign-off.

Roger Parry: I can only provide you with evidence or, or witness testimony for myself because, apart from that one example which I gave you, which was, you know, 20 plus years ago, 25 years ago, I've always been the chair in that role. I [00:16:00] can tell you how I do it. I'm not saying this is the right way to do it, but this is what works for me. And this is partly because I'm an ex-strategy consultant. So I quite like the strategy process. What I tend to find, and I must've done now, God knows how many, over the years, probably 30 strategy away days where you do this, you put these things together.

It starts out usually with a presentation to the board by the chief exec or a combination of executives. Sometimes if it's a big company, you've got a director of strategy. Sometimes the CFO does it, so they'll kind of have a first sighting shot about where we think we're going over the next five years?

I will then frequently sit down with the chief exec and try and help polish that narrative. You know, throw a few daft consultants' boxes in, you know, four-box matrices, that sort of stuff. You know, typical McKinsey, Bain stuff. Because I [00:17:00] quite like doing it, and the chief exec quite likes doing it— I hope they do. And then the... Next iteration of that process is the chief executive will present it to the board for challenge. And what tends to happen is some non-execs will get along with it; other non-execs will, in a very useful way, pick holes in it. And then I think the crucial role, this is the crucial bit, the crucial role of the chair is to sum all that up at the end.

Look around, see what their body language looks like, see what people's eyes are doing. Sum it up and see if you have at least captured a consensus, which may be somewhat different from the original presentations that the executives made. And that is the process, I think, for myself. By which a board sets is too strong a verb, by which a board evolves a strategy. And it, you know, it'd be very rare for the executives not to be onside. You can get [00:18:00] one or two, sometimes non-execs who dig their heels in and say, no, I disagree with that. You know, because remember, ultimately strategy is about asset allocation.

It's about allocating time, whether it's allocating money. Sometimes it's allocating premises or machinery, and once you've started on that process, it becomes a real muddle if you change your mind halfway through, and so when you're agreeing on a strategy, you're essentially agreeing on asset allocation, if that makes sense.

Oliver Cummings: Yeah, really helpful. And I suppose to just bring that to life a bit, I was reading a nice paper from, from your old employer, McKinsey's, who were looking at the differences between high impact boards and low and middle impact boards. And one of the biggest differentiators was around the number of days spent by board members, with the highest impact boards on average, it was 40 days versus lower-middle on average, it was 20. And interestingly, around this topic of strategy, it was consistent with that; it was [00:19:00] eight versus four days. And I'm curious to know how many days do you think you spend on strategy, and what do you think is required? Because that process sounds like quite a time-intensive process.

Roger Parry: Yes, but I wouldn't necessarily interpret that as sitting in a board meeting discussing strategy. I think this goes to a broader issue. And again, I'm simply giving you my own prejudices and the way I see boards. I think the ideal board has a situation where the...

And by the way, I should also say... when the executives are sitting on the board, they are a director with exactly the same fiduciary duties as the non-execs, and while they've obviously got a day job, I think you should not, you need not make that distinction in a, in one sense, all directors are equal because they're all, they all, in theory, adhere to whatever section of the Companies Act it is—section 172, section 206 of the Companies Act, you know, they are all acting [00:20:00] on behalf of the corporate personality known as the organization.

Ideally, that group of people around that table are in effect acting as surrogates for all of the stakeholders. And this is where I think things have changed a lot in the last 15, 20 years. If you'd have gone back then, the only stakeholder that most people thought about was the institutional shareholder.

Now, almost leaving aside the rules in the Companies Act, the true reality of every board that I'm involved with is you're really thinking about your customers, your employees, about regulators, about public opinion broadly, about how the media is going to react, and ideally, the non-execs bring to the board, as do the execs, particularly the non-execs, their reading around the issues.

You know, they're fascinated, the best non-execs are fascinated by what the competitors are up to. [00:21:00] And they will come to the board meeting and say, "You know, our competitor is doing that." Or "I saw a piece of research." And the best non-execs are quite widely read. They're reading the newspapers, they're reading the blogs, they're reading the management books.

And all of that, in my mind, contributes to the company's self-awareness and the company's strategy. But it's not happening in a formal board meeting. It's happening outside. And in many companies, and I do this with a number of mine, you know, we'll make site visits. We'll go and talk to groups of customers.

I've just recently, I'm on the board of Uber. I've been to a fascinating meeting with a group of drivers in Birmingham to hear firsthand from them what the issues are. And you know, that's not part of a formal board process, but it does make you a lot more informed when you actually come to the board to discuss things.

So, in answer to your question, you know, I would typically—I think most of the companies I'm involved with—I [00:22:00] think of it as a day a week, but there's certainly not a board meeting every week, absolutely definitively not, but I'm engaged with it; I'm reading around the edge of it, and good non-execs do the same.

Oliver Cummings: Love that. I want to go back to that chair, excellence. Are there times that you can think back to where you think, "Gosh, I really got that right?" And, what did that look like where you've really felt that as a chair, you added value to an organization? Are there recurring archetypes there that you've seen over time across all your different roles, or has it always been quite unique?

Roger Parry: I can give you one specific example because this came up quite recently. We were having a conversation, a sort of trip down memory lane conversation. When I first joined YouGov, there were two founders in the business, Stephan Shakespeare and Nadim Zahawi. And YouGov had been a bit of a dot-com darling, and then it had a bit of a downturn.

Roger Parry: And when Nadim left to become a Member of Parliament, there was quite a lot of pressure from some of our big shareholders to bring in an external Chief Executive. You know, their view was, "Founders are okay for a bit, but then you need to bring in, you know, the 'big guy'." And we, the board, were lobbied a bit, individually and collectively, by some of the shareholders. And we talked at length with Stephan and came to the conclusion that he had this really big-picture vision, which the shareholders hadn't actually gotten their heads around at all, for taking the company to somewhere that was in a very different place from where it was.

And we decided that we would back him. And I did that, Kim and I went to see the shareholders and got shouted at a bit by some of them. They forgave us when the share price went up by 3,000 percent over the next 10 years. But that one I, that one I remember being quite proud of because the easy way out would have just been to give in to some of these big funds.

But we, as a board, coalesced around a reasonably aggressive [00:24:00] position and stuck to it. So, I was quite proud of that one.

Oliver Cummings: Interesting. So that was really about backing the right team there.

Roger Parry: Yeah, backing the right person and backing the right strategy, because we did understand the sort of 'big vision' idea of moving into a very different type of operating model and doing what used to be traditional market research in a very different way. And I think a typical fund manager was more prone to make the direct comparison with a direct peer. And also, I think it was fashionable at the time—this was post the dot-com collapse—it was fashionable to say that founders should be shown the door quite quickly and professional managers should be brought in. And I think it was about the time that Apple catastrophically kicked out Steve Jobs and brought in John Sculley. So, I think it was people following trends.

Oliver Cummings: Love that. Any other examples that spring to mind for you where you felt like you really got it right as chair and you really added [00:25:00] value?

Roger Parry: It's usually more a matter of not the individual. You get the board to coalesce around a brave decision. When I was at the magazine business Future, we came to the conclusion that the traditional printed magazine format was in some significant trouble and that we needed to invest quite heavily in various manifestations of digital technology and digital products.

But that was going to trash our profit for a year or two because those costs—for a variety of reasons—could not all be written off to R&D or to CapEx; they went through the P&L. And so, that required again, the board to coalesce around being relatively brave and saying to shareholders, "Guess what?

The profits are going to go down for the next two years because we're building for the future. And that's what a board, I think, gets behind their executives and provides them with support and gets it right.

Oliver Cummings: Interesting. So both of those examples relate to managing the relationship between the shareholder and the exec. Do you think that's where a lot of the value that you can provide as a chair comes from? Or are there other paradigms?

Roger Parry: Well, the other area I think of value is in managing the succession process for the two principal roles of Chief Exec and CFO. Again, over the years, I've probably done eight to ten CEO appointments. And that does take a lot of time. You end up doing a lot of interviews. And you again have to try and find a consensus amongst your board colleagues as to what characteristics we're looking for, what type of person, what type of experience. And then people react in different ways. Some people just don't like someone after they've done an interview with them. You just have to try and be a diplomat and smooth that out, and I'm going to keep using the same word actually about getting this coalition so that the board doesn't fracture.

It doesn't mean that everything is sort of a mindless floppy consensus, but it does mean you've got to invest a fair bit of time sometimes in trying to get everyone broadly on board and hope that whatever it is, if it's maybe the appointment of an executive, maybe a strategic decision, that they are genuinely comfortable having listened to the debate, having looked at the facts, having possibly had external consultancy input, wherever it might be, that they've arrived at the right answer.

Oliver Cummings: What does that mean in practice? Because I've definitely worked with some chairs where I thought, "Gosh, they've wasted an awful lot of time having the same conversation with each individual director," and others where actually they've got enormous value by having those sort of back-channel conversations. What does that mean in practice for you? How have you got that balance?

Roger Parry: I try to decide when we are having the same conversation for the third time and not have it again. So I will sometimes get grumpy with a non-executive if they just constantly take a contraposition and don't sort of concede on something. Ideally, you have that conversation with them outside of the board itself. I think it's quite rude and almost bullying within a board meeting to pick someone up too strongly. Though sometimes it's appropriate to do it in the meeting itself. It depends on the robustness of the individual and their nature.

But no, I think that going back to the question you asked right at the beginning about how chairs add value—they avoid the time-wasting of endlessly going around in circles trying to seek consensus. I think you get to the stage where you need to push that consensus through.And the subtle balance is the difference between dictating the outcome and arriving at that [00:29:00] consensus by force of argument sometimes. 

Oliver Cummings: Now, if we look at the other side of things, as you look back across your various chair roles, of things where you look back and go, "I really got it wrong there." Are there any patterns that you see emerging there?

Roger Parry: I happily admit that my time at Johnston Press, I think that I went along with the consensus view of our shareholders, our analysts, and my fellow board directors, that actually the internet wasn't going to be that much of a problem. I mean, that was the prevailing wisdom in the early to mid-noughties, that the company was so extremely successful, 30 percent EBITDA margins growing rapidly through acquisitions, that we were on the right track by basically doing more of the same. And I can't pretend that I had some great epiphany where I realized it was wrong. Actually, the answer was different.

But it is ironic that at the same time, I was also chairman of Future, where we did have that epiphany, and we were extremely paranoid about what the internet might do to us, and we took steps to radically change our business model, and at Johnston, we didn't. And so that probably was not, in a sense, my finest hour. I should have either—I think what I should have done, was probably brought in more new board directors. Because we had a group of people who were very similar in background and outlook. They were all, mostly—not everyone, but mostly—deeply steeped in the world of regional and local newspapers. So they really had seen it all. And I think that actually gave them a false sense of "we're going to see this one through." And I probably should have been a bit more robust in trying to introduce more outside ideas.

Oliver Cummings: It's interesting. It reminds me of that wonderful Scott Fitzgerald quote of "the test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function." I guess you must have been aware of that at the time, that you had these two contradictory positions, or not?

Roger Parry: No, I wasn't very much. I think the difference was that Johnston was very high-performing and very profitable and had a tremendous fan club amongst the analysts and the investors. Future had been through a near-death experience and was therefore, in a sense, far less certain of its own stability. Ironically, somewhere around 2000 to 2004, the two companies were the top two media performing shares in Europe, in the media sector, in terms of share price growth in the year, for extremely different reasons. Johnston Press, because it was thought that... post-dot com crash, it was probably going to be okay. And actually, its high profits demonstrated that; Future because we'd done a massive wreck and rebuild completely, reduced the debt burden, all sorts of other things. So they were both very good stock picks, but for very different reasons.

And I think the lesson for me that I take away from that is if everything seems to be going right, perhaps it is the role of the chair and the non-execs to be a little bit more forceful in saying, "You know, supposing the clouds start to form and supposing the sun goes down, what might go wrong?" And I don't think we asked ourselves enough in those instances, "What might go wrong?"

Oliver Cummings: It's just so difficult to do, isn't it? It reminds me of that wonderful Clay Christensen's innovator's dilemma, which I'm sure as a strategy consultant, you would have read many times. I wonder though, whether is that realistic? It's easy with the benefit of hindsight to look at the outcome and go, "Oh, we should have," but what do you think if you, if you went back in time... What do you wish that you had had someone saying to you at that time that you think actually would have changed your behavior?

Roger Parry: It's a good question, isn't it? I do think I'm going to go back to that point about the makeup of the board. I probably should, because there's very little thing chairs have a lot of control over. You know, they control the agenda and to a limited extent, they can control, if they want to, the membership of the board. And so, I think I should have gone for more diversity of thought. And, you know, if I look back at the two boards as well, you know, Future, you know, Liz Murdoch was on the board of Future. So she definitely was urging us to think about how things might radically change. And I didn't have that kind of character on the Johnston Press board.

So the board makeup. And I mean, actually, funnily enough, the same consultant, the same individual did make more or less the same presentation to both companies about the nemesis that was coming for print advertising. And the Johnston board sort of grumbled a bit and said, "Yes, well, he would say that, he's American." And the Future board went white-faced and ashen and said, "What are we going to do about this? This is clearly an existential threat." And so, sometimes even those external forces involved doesn't necessarily change the decision. I think, honestly, thinking about it now.

I think in that instance, it came back to, it's much more difficult to change a very successful company than it is one where you have, as the cliché has it, a burning platform.

Oliver Cummings: Yeah. Really, really interesting. Any other recurring patterns and things that you feel you got wrong as you look back?

Roger Parry: I think I now know much better than I did, how to manage the interplay of the remuneration committee, the audit committee, the nomination committee. I always have before the board meeting, with the chief executive, sometimes face-to-face, sometimes via Zoom, to basically game how the board is going to go, to think it through. I think I've become much, much better at doing that than I was at the beginning.

I don't think I really thought through at the beginning exactly what the REMCO was for, the Audit Co was for, and so now, for example, again, personal quirk, I don't sit on those committees.

I think that it actually means you almost end up having a board before a board with a narrow focus on one particular issue. Even if you're not chairing the committee, you're sort of sitting there as a presence. And I find it gives a lot more authority and autonomy to those committee chairs who then bring the hard work to the board itself. So I think I've learned how to do that a lot better. I don't know if I did it terribly 20 years ago, but I certainly did it differently. I think I was much more prone to just go through the motion of process, you know, Remco chair, you know, report to board, Nomco chair. 

But now, you almost get to the stage where the board sets specific challenges to those subcommittees. Typically, for the audit committee, it's about revenue recognition, or it's about some aspect of whether it goes to the P&L or whether it goes to the balance sheet; sometimes it's a matter of asset valuations, but the whole board identifies a problem and then says to, in this case, the Remco, "Okay, the whole board might identify the problem that we appear to be paying a lot less than our competitors, and therefore possibly we're getting lower quality staff, go away and come up with a creative solution." And then, so I think it's learning how those, those various levers of process work.

Oliver Cummings: I like that. So that's clear to me how that works, delegating more so that you're not involved and you're able then to bring, I guess, more of an independent perspective as a chair, when they come back to you with a recommendation, which provides additional diversity of thought there. 

Going back then, if you, if you were going back in time to your sort of start as a chair and you've talked about the importance of the apprenticeship model and learning from others, you've touched on the importance of CFO experience. Is there anything else you would do knowing what you know now to prepare yourself for your first chair role to ensure that it got off to the best start? 

And I suppose for someone who's listening to this, who might not have had CEO or CFO experience, who might already have gone and sat on boards and tried to watch others learning, is there anything else they can be doing?

Roger Parry: Well, yes, I think before you take over as chair, I think you need to be pretty confident that you really understand the economics of the business that you're in. Now, I don't mean by that you understand all the deep operational details, which would be really quite difficult for a chair to get a hold of, but you do understand the big economic drivers. You know, so if you're in a business, as many of my businesses have been, which are supported by advertising income, you need to really understand what's going on out there in the advertising income as it comes towards you. 

Why do retailers behave the way they do? Why do ad agencies behave the way they do? Is advertising going up? Is it going down? Is it moving to different formats? And I think that that's, it's a subtle distinction, but I think it's a big distinction. As a chair, you can learn that sort of stuff by asking to speak to industry experts, by going around to talk, if it's a listed business, to the sector analysts, possibly talking to retired executives. So it's not operational detail, but it's genuinely having a sense for what are the big economic drivers for whatever business it is that you are in, if that makes sense.

Oliver Cummings: Yeah, very, very helpful. Okay, I want to go back to something you touched on a little bit earlier and something actually you also talked about in your book "Anticipating Disruption," where you, you talked about the difference between regressive boards and progressive boards. You touched on the diversity of perspectives and you talked about that when you were talking about the things that you had missed at Johnson and the perhaps had you had more sort of future-oriented, disruption-oriented minds in the room, that might have changed things. 

This partly comes from sort of seeking gender balance and ethnic diversity but it's mostly achieved by picking directors who are not cut from the same cloth as the executives. That boards are not a representative democracy. Can you just expand on that? What do you mean by 'not from the same cloth'? 

Because one of the undercurrents I pick up at the moment is that a number of boards are struggling with an increasing lack of experience on their boards, that they, in the interest of creating greater diversity of thought in the boardroom, they have, you know, there's only so many different elements of diversity that you can bring into a boardroom. 

And each one involves a choice and a cost, and there's an opportunity cost for each. But I'm hearing an increasing undertone from people echoing the sentiment that they're missing some of the experience that they used to have. So I'm really interested to understand what you mean by a different cut of cloth.

Roger Parry: I think most boards, when you put together your five or six non-executives, you should always have at least one who is a genuine industry expert who probably does look in some ways quite similar in background to your own executives. They may be very different in style or culture or nationality, but it's quite risky not to have at least one person on the board who really understands the industry. 

And I also have a slight preference that the chair either should know the industry very well or have invested the time and effort to really learn about it before taking over as chair. My angle on this, which I know sometimes seems a bit controversial, is that diversity is manifested by diversity of thought more than necessarily being overly concerned about diversity of gender or diversity of racial background or nationality. You want people who think differently. 

You could put together a board of every gender and every hue, but every single one of them would have been to one of two leading public schools, they've all gone to the same investment bank, and they all have a PPE from Oxford. You know, that doesn't give you a diverse board, in my view. It might look diverse in the board picture, but it isn't. You're really suffering from groupthink.

And I think the solution set to the problem you raised, and it is a real problem about lacking industry expertise, is to invite other members of the management team, to invite consultants, to invite industry observers to come and talk to the board occasionally about things, and very definitely to encourage board members to read around the topic and, you know, come to a board meeting armed with 'this is what the competitors are up to'.

This is what's happening in America. This is what I read about in Japan, that sort of stuff. I personally think there is enormous benefit to boards having sitting on that board, working executives from another company who are sitting there in a non-executive capacity. It's very difficult to do because high-flying execs sometimes can't get permission to do a non-executive role. Sometimes they haven't got the time to do a non-executive role. And so, as chair, you have to be prepared to make concessions, and you have to be able to move things around, and that brings me back to the point about why I think, you know, six or seven formal board meetings a year is probably quite enough because it's less of an ask to someone to come and do that.

Being prepared to perhaps have one of those board meetings as purely hybrid if it's part of the sort of sequence of approving annual results or something where there isn't a great debate required, it's more or less just procedural. And if, for example, which I've done now twice, you have a UK company that has a great deal of business in the United States, and you want to have a U.S.-based director, the easy concession is to agree that one board meeting a year, at least, possibly two, will be held in the United States. And so you minimize the impact on that individual. And there are other examples of that. 

If you've got someone on your board who is normally resident and working on the West Coast, then you make sure you hold your board meetings in the afternoon in London because then they can attend without heroic efforts.

You know, it's just rude to invite someone to a board if they live in San Francisco and decide you're going to hold it at nine in the morning because, for the rest of the directors, they probably don't mind. It probably doesn't make much difference. So I think one of the ways of solving the challenge that you've just raised is to go above and beyond to get working executives on a board because remember, they're going to be living daily with issues like, you know, is it better to have a tender offer to buy back shares or is it better to have a special dividend? 

They're going to be thinking about things like what are the risks of convertible bonds as opposed to issuing equity because they're probably living it in their day job. And particularly when we come to some of the really interesting softer issues, like how do you deal with the new demands for working from home, the new demands for hybrid working, the new demands for using technology like Zoom and Teams and so on. They're doing it every day, you know, and there's no way around this, a 38-year-old full-time executive working for a tech company is going to have a different set of perspectives from a retired accountant who may know an enormous amount about aspects of the corporate world, but they can't possibly have the same perception. 

And while they're not necessarily executives in exactly the same role as your own company guys, they will bring to it a very fresh approach. So that's why I think this is one of the things that people should put a lot more effort into: having working executives sitting as non-executives on your board.

Oliver Cummings: I like that energy again, from your former employees. It was a great piece showing, looking at the highest performing CEOs showing that one of the common characteristics they had was they had at least one independent board role because it helped them reframe the way that they were thinking about running their own business. So, massive advantages to them. Roger, the time has flown by, and it means it's time for the lightning round, where I'm going to say a short question and ask you for a quick response if you're ready.

Roger Parry: Sure.

Oliver Cummings: So first up, the boardroom behavior that irritates you most.

Roger Parry: People using mobile phones to do their email or to text. I think that they've been paid quite a lot of money when they're in the boardroom. They should devote all of their attention and effort to what's going on in that boardroom and not be in their mind somewhere else.

Oliver Cummings: What do you do as a chair when you see that happen?

Roger Parry: I have shouted at people. I get fed up. And I do, that's one of the rare occasions where I will actually say something in a group. I wouldn't, if the person, if I thought there was really some personal crisis in their life, I probably talked to them afterwards, but the particular occasion that this happened, and he knows who he is, it was a very public row.

Oliver Cummings: A repeat offender. Excellent. Best book every board member should read, and why other than your six?

Roger Parry:  I'm going to give you an answer. I'm going to say 'Scoop' by Evelyn Waugh because there's more to life than reading management books, and it's a fun book, and you should enjoy reading a good book. I don't believe that there is any one definitive tome. If I had to, I'd go for Jim Collins' 'Good to Great,' but I think you should read a good book that you enjoy.

Oliver Cummings: I love that answer, thank you. Your favorite quote and why?

Roger Parry: This one I am very fond of, which is... "Perfect is the enemy of good," not very original. I think it actually is Winston Churchill, which is something slightly different. "Perfection is the enemy of achievement," or something, but you do see that you sometimes get a board conversation or executive conversation where people are so determined to get the absolutely right outcome, they miss the fact that if you get to 80 percent really quickly, you've really made a great achievement. So, "perfect is the enemy of good."

Oliver Cummings: Your most significant professional insight?

Roger Parry: My most significant professional insight... I think that execution is more important than strategy. You can't run a company without strategy, but ultimately, you can have the most magnificent strategy, and if you don't execute, it's a waste of time. So, execution is what really matters. You can model it, you can manage it, you can assess it, and you should reward people who do it well.

Oliver Cummings: I love that. And that from someone with a strong background in strategy. The worst professional advice you've ever received.

Roger Parry: That would be "the internet is a passing fad," which I have received in those very words. Yeah. That would be the worst advice.

Oliver Cummings: And last but not least, what three things should anyone listening to this take away from it if they take nothing else?

Roger Parry: I'm going to actually plagiarize here. There's a guy called David Beattie, who's a Canadian board guru, and he's got this really neat framework. He talks about boards having hindsight, oversight, and foresight. And he says the problem is traditionally boards spend a lot of time on hindsight, what has happened, a lot of time on oversight, are we well governed, and not nearly enough time on foresight. So, one key thing is boards have to make themselves look forward and not simply manage the day-to-day because that should be already being done by the team. 

What else can I... second one, you want three, do you? I think probably the thing I mentioned at the beginning, the quote from Frank Knight, that the chair runs the board and the chief exec runs the company. And perhaps, as we discussed, 'runs' is perhaps the wrong word, so the chair oversees the board and the chief exec runs the company. 

And then the third one, which again, we've already touched on, I think it is a really powerful approach when the board directors act as surrogates for the stakeholders, so they bring the stakeholders' issues to the table, you know, they take the view of the customer, they take the view of the competitor, they take the view of the employees, and so on, so that those voices are, albeit secondhand, actually heard around the board.

So that'd be my three: Look forward, CEO-chair distinction, and this surrogacy idea.

Oliver Cummings: Brilliant. Gosh, Roger, thank you so much. That has been fantastic. It feels like there's another book, at least if not several, to come out of all the richness of the things you've been covering there. So, really appreciate you taking the time.

Roger Parry: I very much enjoyed it. I hope it produces a good podcast for you. Thank you very much.

🎙️ You can listen to the full podcast interview with Shefaly on Apple Podcasts and Spotify.

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