The Independent Director: The Non-Executive Director's Guide to Effective Board Presence by Gerry Brown
|The Independent Director: The Non-Executive Director's Guide to Effective Board Presence by Gerry Brown|
|Category: Business and Finance|
|Reviewer: Sue Magee|
|Summary: Based on case studies of eleven non-executive directorships which he has held Brown explores the responsibilities, problems and pleasures of being willing to make yourself the most unpopular person in the boardroom - if you're doing the job properly. A highly-recommended read if you're an independent director, or even considering it. Gerry Brown popped into Bookbag Towers to chat to us.|
|Buy? Yes||Borrow? Yes|
|Pages: 304||Date: March 2015|
|Publisher: Palgrave Macmillan|
|External links: Author's website|
In the United Kingdom independent directors are usually known as non-executive directors to distinguish them from the executive – those people charged with actually running the company on a day-to-day basis - but Gerry Brown usually refers to them as independent directors, a phrase which is common in other parts of the world. Initially, I found the phrase somewhat unusual but as I read The Independent Director I came to prefer that usage as it stresses what the director must be above all else – independent and able to stand back from the management of a business and view what is happening and what is planned with a dispassionate and critical eye. There's little in the way of training and it can be argued that no one is actually qualified to do the job, but Brown's book is as good as you're going to get in terms of spelling out the responsibilities and pitfalls.
There's a considerable range of organisations where the skills of the independent director are required: public, private equity and private companies, charitable organisations or those using the services of trustees or governors, but Brown concentrates on case studies of those companies of which he has had personal experience as an independent director. The companies are from various sectors: logistics, construction, pharmaceuticals, manufacturing, IT, foods, ports, property and financial services, cover the USA, Europe and Asia and vary in size from small to large and include private equity companies. Additionally he's had experience in a company which had to be wound up, others which have been turned around and those which have succeeded, and has a considerable track record of working on the executive side of businesses. It gives this book an impressive pedigree.
For anyone unsure of how companies work at board level Brown delivers the information in a clear and unpatronising way. The niceties of the relationship between the chairman (usually an independent director) and the Chief Executive Officer are explained by examples from various companies. The ideal is when a CEO feels that the chairman is someone who can help them. The worst situation is when the chairman is ruled by the CEO. It's clear that the chairman needs considerable skill as a diplomat and courage when it comes to some unpleasant tasks. The independent director is there to challenge and stretch the executive without allowing an 'us and them' atmosphere to prevail: the chairman could well have the fate of the CEO and the organisation of succession in his hands.
After each case study Brown looks at the lessons learned. He's clear in his analysis of what went well and what went wrong. If particular people are a part of the problem or success then he's unafraid of saying so although I never heard the noisy sound of axes grinding. He's sensitive to cultural differences without ever losing sight of the fact the independent director is responsible to the shareholders rather than to the company (or individuals within the company) although, in effect he can regularly become a link between the two. I found his comments on the limitations of the role of the independent particularly thought-provoking: whilst they can offer advice and guidance they cannot make the decisions. That is up to the executive who must do what they feel it is right to do. There's obviously a subtle distinction here between the advice not being given or sufficient scrutiny being exercised – the independents failing to do their job – and their advice being ignored. Brown makes the point that when something goes wrong the independent director's reputation can be stained for a long time.
After the eleven case studies Brown looks at eight 'themes'. These are broad areas of discussion and I found three particularly interesting. In Boards, the ethical questions faced by the directors are fascinating. Should the company do business in countries with oppressive regimes? How should they act in countries where bribery is commonplace? What control can they exercise over local suppliers to ensure that they are not acting unethically? The more you think about them, the less clear cut the answers become. Strategy is fascinating because of its importance to any organisation allied to the fact that there are CEOs who believe that independent directors should allow strategy questions to go through on the nod (apparently about 60% do so), which is strange when you consider that it's the independent director who has the larger picture in mind. The section on Risk is gold dust – not least because it asks what the independent directors were doing in the 2008 banking crisis.
I was nudged into reading this book by a comment I read after the General Election to the effect that many politicians who had lost their seats would be on the hunt for independent directorships. Brown is clear that such jobs are not baubles to be picked up, the gift of a friendly CEO who will happily reciprocate in kind. If you'd like a smile, read the quote on executive team characteristics.
It's an impressive book, so why only 4½ stars? Unfortunately the book has not been properly proofread and there were far too many occasions when I was pulled out of what I was reading as I reread a sentence to sort out what was meant if not said. I was reading from a finished copy rather than a proof and the numerous mistakes are not what I would expect from a publisher such as Palgrave Macmillan.
I'd like to thank the publishers for sending a copy of the book to the Bookbag.
Gerry Brown believes that there too few women on the boards of major companies. For more on the subject of women in business we can recommend Why Women Mean Business by Avivah Wittenberg-Cox and Alison Maitland. If business continuity is your concern then you need Business Continuity For Dummies by Stuart Sterling, Brian Duddridge, Andrew Elliott, Michael Conway and Anna Payne. A CEO looking for assistance from within the executive might appreciate Consiglieri: Leading from the Shadows by Richard Hytner. Finally, Sir Stuart Rose was briefly chairman and CEO of M&S; for more about this company try The Rise and Fall of Marks & Spencer: ...and How It Rose Again by Judi Bevan.
Gerry Brown was kind enough to be interviewed by Bookbag.
You can read more book reviews or buy The Independent Director: The Non-Executive Director's Guide to Effective Board Presence by Gerry Brown at Amazon.co.uk
You can read more book reviews or buy The Independent Director: The Non-Executive Director's Guide to Effective Board Presence by Gerry Brown at Amazon.com.
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