The Independent Director in Society: Our current crisis of governance and what to do by Gerry Brown, Andrew Kakabadse and Filipe Morais
|The Independent Director in Society: Our current crisis of governance and what to do by Gerry Brown, Andrew Kakabadse and Filipe Morais|
|Category: Business and Finance|
|Reviewer: Sue Magee|
|Summary: If you're looking to be an independent director in the NHS, a university, a sporting organisation or a charity, this is your go-to book. Highly recommended.|
|Buy? Yes||Borrow? Yes|
|Pages: 271||Date: August 2020|
|Publisher: Palgrave Macmillan|
|External links: Author's website|
Independent Director: a job for which no one is qualified (Financial Times)
Independent Director: An independent director is a member of the board of directors who (1) do not have a material relationship with the company, (2) is not part of the company's executive team, and (3) is not involved with the day-to-day operations of the company. (Corporate Finance Institute)
Gerry Brown, Andrew Kakabadse and Filipe Morais feel that the relationship between the executive members of boards and the independent directors (formerly known as non-executive directors), trustees or governors of organisations is frequently unbalanced. The function of the independent director is to have general oversight of the executive side of the board - to spot when and where things are going wrong - but all too often the relationship is too cosy, too antagonistic or the independent director lacks the knowledge and/or experience to understand what's happening or to know how to intervene. Covid-19 has highlighted the failings and weaknesses of leadership and governance and you might be tempted to think that these are extraordinary times and that all will be well once we get back to 'normal' but a pandemic was predicted and modelled in the past and there has been a general failure to prepare for what has happened - and is still happening.
Most of the The Independent Director in Society was written before the pandemic took hold: the in-depth research (by Henley Business School) behind the book was completed even earlier. Andrew Kakabadse and Filipe Morais are both professors at the Henley Business School. Whilst there are comments about the pandemic the content is almost exclusively based on the situation beforehand. Even at that stage, it was doubtful whether many organisations were in a position to respond adequately and promptly to a crisis or to make informed decisions quickly.
In The Independent Director, the authors looked primarily at the Independent Director in business. In The Independent Director in Society, their focus is on the NHS, universities, sporting organisations and charities, which should be run on business lines but often are not. One problem might be the size and composition of boards which might hinder their decision-making ability. The boards tend to look much the same: they're usually older and often retired. The average university board is 60% male and 94% white British. In sport, it's 65% male and 93% white British: it doesn't take much thought to realise that the boards are not representative of their stakeholders.
There's then the problem with the calibre of the independent directors. Too often they're associated with the chairman or the CEO - giving the impression that they're there to rubberstamp what the executive proposes: they're not truly 'independent'. Sometimes they're there to tick a box - the token woman, BAME or disabled person on the board rather than being there on merit. Many independent directors don't seem to be engaged with their organisations: a frighteningly large percentage had no contact with stakeholders. It was occasionally difficult to assume that they were taking their responsibilities seriously or that the institutions were really fit for purpose.
This might sound very depressing but the authors don't concentrate on the failings, or, indeed, the mechanics of the role but rather on board culture and relationships between directors. They seek to develop independence of mind and action, looking carefully at the selection and training of directors and how they can get support (rather than dominance) from the chairman and the executive team. The distinctions they draw between 'governance' and 'management' will be a lightbulb moment for many people.
The book is very readable. The points they make are illustrated by reference to stories we've all heard about such as Oxfam, the London Ambulance Service, Carillion and Kid's Company: individuals are not criticised but the points are clearly made. There is a lot of data to be considered, but the graphics (courtesy of Henley Business School) are excellent and in a consistent style throughout the book. By the time you get to the end, you may well have an 'I could do this' feeling. Alternatively, you might realise, having looked carefully at yourself, that the job your friend has been trying to talk you into is really not for you. Either way, it's a success story.
I'd like to thank the publishers for sending a copy to the Bookbag.
You could shelve this book alongside Boards That Dare: How to Future-proof Today's Corporate Boards by Marc Stigter and Sir Cary Cooper. For more about diversity, we can recommend The Double X Economy by Linda Scott.
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