Apr 10, 2024 Nurole logo
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Stuart Roden - Investors in the boardroom: getting the right CEO, capital allocation, and adding value as former investors

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

Stuart Roden is Chair / former Chair of Landsdowne Partners, Hetz Ventures, Lewis Advisors, Tresidor, the Design Museum and Unlocking Potential, NED at LSE and Trustee at the National Gallery and Centre for Social Justice. In this conversation with Nurole CEO, Oliver Cummings, Stuart covers: 

  • When you were an investor, did the quality of the board come into your investment evaluation? (1:34)
  • Do boards justify their costs? (4:48)
  • Do you think the board is more about governance than value creation? (8:15)
  • Where and why have you made mistakes, hiring the CEO? (12:38)
  • How do you build the best relationship with your CEO? (19:39)
  • Practically, as a Chair, how do you make sure you are discussing what you need to with your CEO? (24:01)
  • How do investors add value as board members? (25:47)
  • How do you think about capital allocation and return on resources in the boardroom? (28:53) And
  • ⚡The Lightning Round ⚡(33:04

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

Oliver Cummings: I want to start by talking about your perspective as an investor of the role of the board. When you were invested, Did the quality of the board ever come into your investment evaluation? 

Stuart Roden: The simple answer is, very rarely.

And I was thinking back at the number of times that we as a team, and I'm going back to both Lansdowne [00:02:00] and pre Lansdowne at Mercury, Where we would have had an interaction with the board, specifically the chair or any other board members relative to the time that we would meet the CEO or finance director or other operational people.

And I could count those on a single hand and they typically would only happen in times of a crisis, you know, crisis possibly with. The CEO of crisis with the company or the more favorable circumstances if there was ever a very large transaction that the company wanted to do and they wanted to bring the chair in or we want to ask the chair any specific questions.

So it really was never a very important part of whether or not we would invest or not invest in a company. It was an added bonus if we knew the chair or the chair of the known to us previously in another company or another industry. But it was very rarely part of, uh, our investment analysis or decision making and to [00:03:00] extend that to board members, I actually can't think of a time where we decided to go to a board member or a board member came to us unless it was over something which would have influenced specifically our investment decision.

I actually can't recall a decision. 

Oliver Cummings: Wow. So what is the implication of that? As an investor, you didn't see any value in the board. 

Stuart Roden: I think that if we had a good chair and the CEO and the senior management team were strong and were able to discuss with us. Strategic options available to the company, the vision, their way of getting to fulfill their longer term objectives, it just wasn't important to us.

It wasn't important. And I think it's fair to say that the board, the role of the board has probably changed a lot in the kind of 40 years since I started investing. And I can't pinpoint exactly when that was, but it seems to me that a lot of board duties today are governance [00:04:00] related rather than necessarily business strategy related and that there is a general risk aversion.

Amongst board members and what one can understand that it's a pretty asymmetric risk of being a board member. You don't get particularly praised if things go well and if things go badly wrong, you can find yourself in trouble with your own personal reputational risk on top of it. It would be unfair of me to say that the board isn't important because we weren't in board meetings and we don't know exactly what input any individual board member might have had, both to the chair, to the board members.

CEO or senior management team, but it's just not something that we came across and we're aware of at all. And if they did have input and they did have important things to say, I guess we would have seen the output of that in our discussions with the CEO and his or her colleague rather than directly.

Oliver Cummings: Really interesting. Ultimately boards carry a cost for organizations. And I'll often hear people say board members are not compensated for the risk [00:05:00] that they take I mean would you as an investor actually Be happier without a board altogether, because there is a cost there. Obviously that's going to hit long term value cash flows.

If there's no identifiable value, well, why not just get rid of them? 

Stuart Roden: Again, we'll have to distinguish between functioning and dysfunctional boards, but I think a well functioning board will do things that I say that we may not be totally aware of, they will, there's regulation, there's making sure everything is done.

In the right way, there's obviously big issues now about bringing on the ESG, the EDI, all of the things that a company needs to do, I think be very hard to do without an external board and the better boards will clearly have very good people on them who will be able to add value at the operating level.

So I think I'm just saying we're not quite aware of what they do or don't do. And you only become aware of it. Typically. When something goes badly wrong, and then we'll say, [00:06:00] what was the board doing? What was the chair doing while X and X were happening? And we've definitely seen that and where I can see it perhaps more obviously, because I'm now on the inside of it is the, in the third sector where it's quite clear from what I see, there are big differences between a board that works well and one that doesn't, which we can talk about later.

But I don't know, for example, if I'm trying to make an analogy. If a funder of a charity from the outside, I suspect not know until it was too late whether the board of the charity or the organization which they're investing was strong or not strong. You just wouldn't know it. It's very hard to find out from the outside and one would put a lot of faith on the chair to make a board function properly.

And that would be the trust element that if you knew them, or they had a reputation, you would assume that they were doing their job properly. As I say, these things only really come to the fore in [00:07:00] times of scandal or underperformance, where everybody turns around and says, Oh, wasn't it obvious that such and such was not an appropriate chair of a board?

They had no experience. It's easy to see why it went wrong. And we hear stories like that the whole time. And I think there's an analogy here. I'm trying to think it through as we speak. But if you did a two by two matrix of a strong board, strong CEO as your best outcome, strong CEO board is probably okay.

Obviously, weak CEO, weak board won't be good, but I think there's a kind of interesting quadrant which is strong in the broader sense of the word, CEO, weak board. That can either be a good outcome or a disastrous outcome because the strong CEO can get away with things and be a very forceful personality and have lots of charisma and do things that the board is not strong.

can be very bad. I think that that is the, in some ways [00:08:00] can be all right. It could be the CEO is strong and good and very capable, but if they're strong and a big personality and a big force, but not capable, that combination can be very toxic. I think that's what you find when things don't go right.

That's the kind of the learning 

Oliver Cummings: feels like there's a spectrum developing. I had Hamilton Helmer, who I don't know if you're familiar with, who wrote seven powers on the podcast recently saying one of his things that he's rethought has been the value of the board. And he sees the value of the board or the its impact as much less than he ever did.

used to things. And at the other end of the spectrum, we had someone like Professor Kakabadze saying the board has never been more important and that boards need to step up more and chairs in particular need to step up more. And they, over the last sort of 30, 40 years, they've made a mistake of stepping back and allowing the executive to lead.

And it sounds like actually you see boards more at that Hamilton Helmer end of the spectrum, although recognizing that there may be. things going on behind the [00:09:00] scenes that would allow for that kakabatse potential for a board to add value. 

Stuart Roden: I think that's very well put. For me having, you know, become a chair and two members of boards in a non profit world and also some now in the for profit world, it's absolutely clear to me going back thinking about kind of that matrix that the primary job for the board is to have the right CEO and kind of nothing works without that.

Nothing works at and one's life. With a underperforming or best underperforming at worst, a bad actor CEO is really tricky to get anything done because you don't have the executive power. And when I say excellent CEO, I would then assume that person would then choose the right team around them and everything else goes with that.

So the time one needs, particularly when there's a change of CEO, the time that one needs to take to get that incredibly important. And. Obviously, you've got things that some charities will have safeguarding issues and have governance issues out of all of those things. But even those things are ultimately the responsibility of the [00:10:00] executive team back to the CEO to have the right people inside internally to make them happen.

And I guess that's been my feels a bit strange my age to be saying that it's been my big learning that decision is so important. And I've been involved in my own educational charity where we haven't always got that some of it, not our fault. And I think there is a flaw in the system somewhere about references, I don't know if other people have mentioned this, but you meet people and you do your kind of interviews and you bring in your experts and you try and push them and ask them questions.

But ultimately, it's a lot is past performance. What have has that person done elsewhere? How good were they? What do people say about them? What would they like to work with? And you can That's the initial starting point, and we've definitely had cases, and it's happened more than once, I don't think it's an isolated incident, where written references are, they're almost untruths from previous employers, where people, as we know, come to [00:11:00] agreements when they leave for unpleasant reasons, that they'll leave, there may be a payoff or something, and we will agree a reference, For the next employer who might want your services and one really must rely upon those and even the ones where you go and make phone calls and do it verbally where you would hope to get better information.

The learning for me is that you've got to go deeper you've got to speak to ex colleagues at people who used to work with the person but are now somewhere else and not rely upon what's being said by the previous employer and I made a proper complaint to the to that organization. It's just not, it's totally not right to pass off some for me, particularly when it wasn't just a question of not meeting goals.

It was probably more sinister than that to somebody else. Yeah. It makes me very angry. And I guess one becomes slightly more accustomed and expert at reading what a good reference looks like and what a bad one does by what's not said. So if someone gives a reference now and it's two pages that so and so worked here, performed their duties well and left here, [00:12:00] 18 months later, I immediately know that's not a good reference.

Given it is the most crucial thing that a board will do normally. Typically in their life, just go for everything. That's a bit laborious. It takes time. And that's very different to how I used to be. I was much more instinctive previously. And you realize that can be very dangerous because you share that.

The idea that you hide in your own image is so true. Bring in different people, speak to as many people as you can. Speak to unusual sources and just make sure that there is nothing hidden there, even if they're not the best person in the world. Just make sure there is nothing sinister that you haven't been told by the previous employers because they've come to some arrangement.

Oliver Cummings: What I would be really keen to do if you're, if you're happy to dig down bit more into those experiences that you've had of getting the wrong CEO. And what you've learned from those experiences? 

Stuart Roden: Yes. Yeah. Very happy to. So, so, so the one that sticks out, and obviously it would be not appropriate to name the person, or perhaps not even [00:13:00] to name the institution 'cause then it might become obvious would be one where we were without a CEO because the previous CEO, who was good but had decided that it probably wasn't the right job for her.

So we, without someone in post and therefore, you know, keen to have somebody and. I had a meeting with somebody who said, fortuitously, they had somebody they knew who had just left a job and on paper looked fantastic, who I met, very engaging, charismatic, eloquent. So we did the references from the organization above the previous employer, from people who had worked on a board alongside this person, and they were all good.

They were all very good and it was verbal and, uh, and then written ones followed. And it then turned out, again, without going into details, that, that this said person was fantastic at managing up, but actually awful the other way. And interestingly, [00:14:00] someone had mentioned that to me before we made a decision.

Again, very anecdotal and one kind of often dismisses these things if you're already set. And then it became apparent that, and this was the difficult bit, that a couple of people were making complaints and it wasn't until one person has gone quite public that became a torrent and turned out that the person wasn't the right person to lead the organization and was doing things you would not expect them to do in terms of management of people.

And I actually took it up with the people who gave the reference and it turns out. That the reference they gave was not accurate, which really annoyed me, actually, and annoyed my fellow board members. It's a classic case of passing somebody off. I don't know if listeners ever saw the Larry David Kerber enthusiasm where somebody passed off a poorly performing secretary to one of his friends, having given a great reference.

Um, got it in a year when this person joined and, and this was slightly more serious than that. So we did take it up with the people. I guess the [00:15:00] lesson is to find people who've worked for the CEO or senior leader, rather than just people they've worked for, because the law around references, which again, many people be familiar with is often part of a, a compromise agreement and everyone's slightly silenced.

On both sides and it's a way to make an exit comfortable for the person who's leaving, but also for the organization and, uh, and it might be fine in certain kinds of jobs and it might be just about acceptable in certain organizations, but where one is dealing with very sensitive issues or a sensitive client base.

It's just not acceptable. So if ever this happens again to me, which I'm sure it will, one has to go down to people, particularly people who perhaps work with a person who are now no longer at the organization they work for, because again, you might be compromised to get someone to say something if they're still at that organization.

That was a key learning. And there were several of us in the interview process. So it wasn't just me. [00:16:00] And I think it's very easily to be duped by charismatic, personalities who are very strong communicators. So that was a, that was definitely my worst experience. And there've been other ones which were in a sense, one kind of knew the risk one was taking and it turned out that turned out to be the case.

And that was more about personalities not getting on, but it was a kind of a known risk that one thought it was worth a chance and knowing that if it didn't work, it wouldn't be catastrophic. But if not, the person had enough. Very strong attributes, but as I say, it wasn't quite, we weren't quite sure the chemistry with some of the other people in the team and in the organization were going to work out.

And over a period of a couple of years, it was clear they weren't going to, and it was. It was a pity, but I don't regret that. If this had worked, it could have been extremely good for the organization. I've never do it on my own, ever, and suspect now need several people around to help do it. And I think some people are very skilled at teasing these things out.

If someone's a bad actor, it's a bit like kind of fraud in a [00:17:00] company. Whatever you do and whatever checks you put in place, if someone is a bad person or has got bad intentions, you probably aren't going to find that out. Until it's too late and then you have to act very quickly and yeah, that's what we did to be fair to the board when we saw this happening and became aware of it.

We took advice very quickly and acted very quickly. It was clearly on the verge of disrupting, ultimately, possibly destroying the organization. So you have to then take that hard decision very quickly. 

Oliver Cummings: That's really powerful. So I'm hearing there three archetypes, the first being the. Deeply nefarious type where you just you're never going to spot it and I've experienced that as a board member and one of my sort of reflections on that was I was very glad when it did come out that we had such a good paper trail around it.

This was in an environment where it was safeguarding issues that we had a paved trail that showed that we had done everything possible. The second type you talked about there was Character where you feel that there is something that is [00:18:00] discoverable and you're saying you have to go deeper. Don't just take the top level, the bird's eye perspective, take the worm's eye view.

And that really resonates with me. I remember meeting a CEO who told me that was incredible vision they had in the way that they operated with their businesses. And then I talked to someone who was Two years into their job in that organization, and it felt like you're talking about a different company, that individual's view, nevermind that the person that reported to them, but someone on the shop floor.

And then the third scenario there that you've outlined is a really interesting one where you've identified an issue and you choose to manage the risk. And I remember a CEO, we did some sort of diligence on where I remember one of the references came back and said, look, they could be brilliant. And they would have been brilliant had they not spent so much of their time renegotiating their incentive package.

And we chose to accept that risk and it did blow up on us subsequently. But I think it sounds like, same thing, your situation actually, that's a risk that you can choose to take and if it doesn't work out. 

Stuart Roden: [00:19:00] Exactly, exactly. Yeah, and it's knowable and it's not one that if it did happen would blow the organization up.

If someone says the risk is that they have a blow up, emotional blow up in front of you or bully people, you just wouldn't take the risk. If it's that kind of, you know, their, I don't know, their driving personality might be a different cultural way of doing things to the existing way of doing things, you might think actually a bit of that's quite good.

to change, but know that there's a risk that doesn't work. So I think, yeah, as long as it's a risk that is containable and doesn't jeopardize the overall organization, sometimes you have to take it. It's very unlikely that you're going to find what you think is the perfect person. You're lucky if you do.

So it's just a management of risk issue. 

Oliver Cummings: Okay. So you've talked about how to pick the right CEO. I'm curious to hear how you think about building that relationship with them to make it work effectively. And particularly in that scenario where you've got some way, there is some sort of risk. How do you do that as a chair?

Stuart Roden: So I'm, I think it's a good general good housekeeping, which is [00:20:00] spending time with them, understanding their motivations, understanding what they want to get out of their tenure. Is it long term? Is it a stepping stone for something else? Understand where their strengths are, where their weaknesses are. And that takes a bit of time to do because that's, there's a trust element on both sides.

And so I think one has to put in that effort and they can also see your strengths and weaknesses and kind of work around from that and give them the confidence that there are very few people that can do everything. And that's nothing to be embarrassed about or ashamed of. And where there are, you don't even call it weaknesses.

You just call it where there are, I think the skill is to try and say, we want you to do what you're best at and enjoy and those things that you're not. We're trying to take away from you and it happens particularly in the interestingly in the cultural sector arts and other where it's typically the case that what they would call the director is someone with an arts [00:21:00] background, historian, expert, curator, and, and they're probably brilliant at that.

And yet there are probably things on the management side of the organization. Which are actually not that interesting, and yet they're ultimately responsible for, and I think what you've seen in the last few years anyway, is a lot of organizations, and I've seen it at the National Gallery, and we're doing the same at the Design Museum, is that you have a COO alongside the director, who's equivalent to a CEO, and over time, as that relationship builds, and the confidence builds, you take more of the admins, an obvious example, kind of finance, Things which the director might not particularly enjoy dealing with or might actually not be very good at.

And you pass that over to the, uh, COO. Um, and yet you keep a committee structure in place that the, in this case, a finance committee is still overseeing it, and the director would still be there and there'll be a finance director, but the line of communication might go finance director, COO, rather than into the [00:22:00] director.

And you do that in a way which is empowering, you know, and freeing and not as a criticism. So I think that's one thing that one has to think very carefully about kind of time and where the gaps are. Can we fill them? Can we help them? And then beyond that, it's the kind of giving them kind of space and confidence.

And I think there's a general point about being a CEO. It's pretty lonely. It's a lonely job, and actually, in some cases, the chair, if the relationship is good, does become the sounding board for all sorts, and it might not just be professional. I've definitely been involved a couple of times where people, whether C, EO, has had a, kind of a personal issue.

Um, Which in these two cases, they did make me aware of, um, and that was the right thing to do because it, first of all, you can listen and you should be aware of someone's having, something's going on in their private life, which might mean at the minimum, they need a bit more time off to deal with things, or it might mean actually they're under extra stress.

So I think it's right, obviously, I can't answer the question if there are other ones who did have a problem, didn't come to me, I don't know, [00:23:00] but I think it's exactly the right thing to do. Um, and actually the other way around too, I think that relationship is so key that when one oneself has got something going on, and it could be, I don't know, from a bereavement or something else, you do tell the CEO that you might not be as available as you were, or you're consumed by something, and so it's a very open dialogue, and again, comes with trust.

It comes with a degree of openness on both sides, which, which is very important. That's where I've seen the kind of best chairs do that. And another example for actually was during COVID where I could see the pressure on a couple of the leaders of these organizations, terribly difficult time for everybody and they had their own issues where actually in that case, I suggested to the chair that we have a conversation with the, the CEO director.

And just ask them if they wanted to take some kind of a few days off. Cause it was so incessant. I do remember that period where managing people from remote locations, you know, revenue line under huge threat, staff having, having tough times that the CEO ultimately takes all that on. So [00:24:00] their welfare, I think is important.

Oliver Cummings: And how do you as a chair ensure that you're discussing those sorts of things with a CEO? Because in my experience, there are some CEOs who will proactively bring it up and there are others who will not. Do you have a standing agenda item? Do you do it, look to do it outside of your meetings? What's your approach to ensuring that those sorts of discussions are happening?

Stuart Roden: Mine is to do it outside the meeting, but it's definitely not for public consumption. And it's to have the physical interaction, I don't diarize it, but I don't think four or five weeks would go along without a physical interaction or a kind of a phone call out of hours to talk about those things.

Definitely not in the meeting. No. What we do in the meeting again, which I can't remember when I first saw it, I can't remember exactly, but we, we do have a closed session of trustees where the CEO isn't present. So other people can [00:25:00] maybe pick those things up if I've missed them. And that has definitely happened on more than one occasion, where other trustees who would've had interaction with the CEO would say, have you noticed that he or she seems to be under a lot of pressure, or, I found out that X, Y, and Z.

So if it doesn't come to me. Those things generally do get aired somewhere and that's definitely a good practice because it might not be about the welfare, it might be about they think the person's not doing a good job, or the person is doing a good job, or there's an underperformance somewhere, it's a sensitive issue, but definitely the issue of the performance.

stroke welfare, stroke health, the CEO would be discussed there. And, and if it's been my, obviously without breaking any confidences, which one, which one I'm going to do, but if I've picked something up, which I think is relevant to their performance or impact in their performance, I would also mention it.

Oliver Cummings: That's nice. That reminds me of a board who have a traffic light system for their in camera. Meetings and I think once a quarter, they traffic light the performance of the CEO and ask each board member to give a red [00:26:00] or amber green, but as you listening to you talking there, it almost feel like you need to have one for their performance, but also for their wellbeing as a structured way of ensuring that everyone is thinking about both those sides.

Let's move on to talk about investors as board members. Really interesting. Obviously you have a sort of deep functional expertise. Curious to hear how you think that experience as an investor helps you as a board member and enables you to bring most value as a board member. 

Stuart Roden: Going back a bit, I wasn't sure I did.

Is that true? I really wasn't. When you've done something all your life, you take it as second nature to what you do. So in some ways, the question you should ask other people, I would say it's a kind of maybe two or three things. One is the ability to see the kind of the kernel of the problem quickly.

What is the big issue here without getting stuck in the weeds? I think the second thing, and I got used to get teased a bit about this. I'm very [00:27:00] much 80 20 on most things, and I've definitely seen organizations, and I'm, I understand it. And it leads to the third point, I'll say, trying to get everything sorted before they make a recommendation or before they want to push something forward.

And it's just very slow doing that. So I'm like, let's just do something which is probably exactly right. There'll be gaps, but present it without it being finished so that we can move on with things. And we find we need to change it down the line. That's not the end of the world, which links into the third point is kind of aversion to risk.

I think. Being an investor, you are basically daily in the risk business and you are going to make mistakes and that's part of part of day to day life. And you're going to try and manage those risks and make sure that none of them jeopardize your whole business, the whole portfolio, and then they're never big enough to cause too much damage.

And I don't think you have that mindset, uh, the third sector, and it's something I'm encouraged to people to do. And then the fourth one would [00:28:00] be allocation of capital. That's just not something that one hears around a board table, and I want people to be pitching ideas and pitching how money should be spent in an ambitious way.

And then it's for us as a board with the senior team to decide. Which things we do and which things we can't do now, and how you might order them. So I, I guess those four, four things, and they're all pretty high level actually. So none of those are micro detailing, which I don't think, because it's not an area that I know about, frankly, often there'll be many more people who have more experience and expertise.

And I do that the on the execution side. But in terms of framing the debate, I would say those four things probably should ask other people, but would be the added value and. Yeah, just start asking those one or two searching questions, which make people think about the big long term picture rather than the nitty gritty of day to day stuff.

Oliver Cummings: It's really interesting. I think a lot about that allocation of capital, which I guess probably does come from my own [00:29:00] investor background, but I've expanded it now as a sort of an operator into allocation of resources and return on time. Invested. What's been interesting for me is coming, working with others who don't have that background, who sometimes struggle to understand what I mean and how to compute that.

Is that something you've experienced and have you navigated it? 

Stuart Roden: Yeah, I've definitely experienced it. And I kind of individually, I've got a case now where I think it's a really important initiative. I wanna, I'm actually not chair, but I'm responsible for it. The. I think the person running it has done a business plan for it and a forecast for it based upon they think are the resources available and so therefore it's not an ambitious plan.

I think I've only got 2 million quid a year or whatever the number is. So I'm going to do a plan based upon that. And I'm saying that's just not what we need here. What we need is something which is incredibly ambitious because this has got strategic importance to the organization. [00:30:00] And that your job is to make the case for an investment 10 times that.

Now, if the organization can't afford it, they can't afford it. But if you're in a sense competing against someone else who's making the pitch, make a very strong case and I'll support it. So it's that kind of thinking. That's on a kind of the ambitious level. And then on the other one, slightly less grand and less macro.

It could be a marketing spend. It could be where we think there's an issue that one's underspending or under, to your point, committing resources. It could be people, it could be money. Make the case why this is a good use of money spent. And if everyone's making the case, we won't please everybody, but everybody knows it's what we think is in the best interest of the organization, that they'll buy into it.

And, but it is a different mindset, completely different mindset. And I think one very important for the board to actually be spending a lot of time on. It's not to interfere with the kind of daily stuff. 

Oliver Cummings: Have you had to recalibrate? Your return on resources, [00:31:00] thinking over your time as a board member. And I guess as an example of that, for me, I think there are probably certain things I under index on the people side of things sometimes that the value and impact on people that's harder to measure.

Stuart Roden: Yeah, and I think that's right. I've also said that my most frustrating thing is slowness. So I've had to recalibrate that because I can often quite see what I would do. And pretend because I'm kind of 80, 10, how quickly I could get to what was close. To be the right answer. And I think also, again, I was very lucky in the investment field when I was running the funds, we made a decision and we lived by it.

And if it was wrong, we changed it. We didn't have to go through hurdles of getting approvals. And I know that's not the case in institutions, particularly where there's government involvement or where they're set up for public good, where you have to do things more and you have to get buy in from lots of people and it takes.

A lot of time. And that's, yeah, that's, that is always frustrating, particularly when you know, the answer, you know, [00:32:00] what answer you're going to get to, but you can't do it quickly. So that, yeah. So one has to be more patient and understanding of that, but at the same time, not just let it happen without putting kind of markers, markers in place that they can do things more quickly than they might otherwise have done because you're not asking for perfection.

Um, And, there's one play, I probably shouldn't mention it, but where the chair, I remember when I first started speaking to her, she said the institution often talks about, name of the institution, blank, time, which meant things take a lot of time. And she said, I never want to hear that again. She doesn't want to hear that.

That's just, nope. We're going to try and do this as quickly as we can with within all the constraints of getting buy in and the input from the people we need to get to. But I don't want to hear that term again, because it normalizes the fact that you can take months and months over things where really it's not acceptable and slows us all down.

Yeah. So I'd say that's been the thing that in some ways is most frustrating, but I think if one manages it carefully, one can move [00:33:00] Something from being ridiculously slow to just being mediocrely slow. 

Oliver Cummings: Sure. The time has flown by, which means it's time to go to the lightning round, but where I'm going to say a short statement and ask you for a quick response, if you're ready, first up the boardroom behavior that irritates you most.

Stuart Roden: Uh, people speaking without having read the papers. 

Oliver Cummings: Favourite quote, and why? 

Stuart Roden: I'm gonna go with one by Robert Frost, which, uh, where he says, The only around is through. And I think I always operated like that. Uh, there were lots of times in my life when I was younger, I was trying to go around things. And now I've learned that you've got to go through them, and be direct, and if there are consequences, So be it, but you're going to get to the end point more quickly.

Oliver Cummings: Your most significant 

Stuart Roden: professional insight. I'll do it on the subject of the board, I think, rather than other stuff. And for me, I think I can overemphasize that as a board member and as a chair of the board, getting the right CEO is everything. It's the difference between not only [00:34:00] successful organization or not, but it's also.

The difference between having a happy, calm life and one which is miserable and disrupted. 

Oliver Cummings: Your worst professional advice that you've ever received? 

Stuart Roden: I think that probably comes from my late father, who I adored. He always wanted me to become an accountant and I didn't listen to him. And I suspect I was probably right not to.

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

Stuart Roden: I think that there's obviously badly performing or poor functioning boards and high performing ones. I think it's the fact that A poorly functioning board can risk an organization failing if you've got a CEO who is credible but not doing good things.

And I say I talked a bit about my experience of that. That, again, is gonna be the difference between the organization failing and not failing. And they have lots of public examples of that where you had a very powerful charismatic, uh, CEO that the board couldn't stand up to. And it works until it doesn't work.

[00:35:00] Getting that balance between allowing them that space, as I said, but making sure they're operating within guidelines. I don't think I realized until I've seen it up close and then can basically get us in the whole organization. And we've seen examples of that. 

Oliver Cummings: What's something people commonly misunderstand about you?

Stuart Roden: Probably a lot of things, but I would say that kind of my levels of worry stroke complexity under what might appear to be a calm exterior. Yeah, people often say I look calm, but they have no idea what's going on. Which is probably a good thing. 

Oliver Cummings: Good mindset for an investor. 

Stuart Roden: Hope you play it. Good mindset for a poker player.

Oliver Cummings: Three things. Our listeners should take away from this podcast if they take nothing else. 

Stuart Roden: It's come up several times that the success of an organization and of you as a chair and of the board is so linked to the performance and character of a CEO and The Jim Collins wrote about this when he [00:36:00] was, when he did his good to great for the charitable sector, it's kind of people on the bus and who's driving the bus and it sounds so obvious, but until you experience it, not going, it's not obvious, I think that that's one thing I would say again.

I didn't know until I did it. I'm sure other people who've listened to this will would agree that there's a huge difference between being a board member and a chair. You can wing it as a board member. And I often see people winging it and they're not prepared. They haven't done the work as a chair. You can't do that.

But you can, but you'll, you'll get found out and the thing won't last. So I think that's, I think that's important. And I guess the other thing on again, sticking to the theme of boards in the, I think all boards, but in the charity sector, non profit sector, often spoken about people put their names on to do board work, but they're not really committed and it's just not, it's not acceptable.

I think if you are going to board, that it comes with responsibility and obligation, and that one needs to fulfill that, and [00:37:00] it's not good enough. Turning up occasionally, not having done the work, not there when you're needed. Quite hard to move off. And your people will know that there are these terms and it's either three times three or two times four, if someone's on and they're not doing anything, it's quite difficult to shift them.

And it's, it's that classic cross subsidy point that everyone's aware of. It happens at work, happens in business. I've been part of it in my earlier life where, you know, the people who are doing the work really get irritated by the free riders and hangers on, and quite a tricky thing because of them often not being paid, but it needs to be dealt with.

And I've. beginning to have those kinds of thoughts about people, and we'll try and do it in a constructive way, because they're obviously there for a reason, but again, if their life circumstances mean that they can't put in the work and the effort, then perhaps they shouldn't be on the board. 

Oliver Cummings: Stuart, I have really enjoyed this conversation and had some real light bulb moments through it.

So thank you so much for taking the time and sharing your wisdom. 

Stuart Roden: Not at all. Thanks, Ollie. Been a pleasure. 

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

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