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Welcome to The Boardroom Path, the essential podcast for aspiring and newly appointed Non-Executive Directors navigating the journey from executive leadership to the boardroom. Hosted by Ralph Grayson, partner at Sainty Hird & Partners, each episode offers insightful conversations with industry leaders, seasoned board directors, and governance experts. Our guests share practical strategies, valuable perspectives, and actionable advice on how to effectively transition into board roles, maximise your impact, and build a rewarding NED career.
[00:00:03] Ralph Grayson: Welcome to The Boardroom Path by Sainty Hird & Partners. I'm your host, Ralph Grayson, a partner in the board practice.
In this series, we'll offer practical steps and useful perspectives for aspiring and newly appointed NEDs. Throughout its 30 year history, Sainty Hird has recruited senior board members across the City, Industry, the Public Sector and NGOs.
We're now also evaluating those boards, as well as coaching and mentoring those seeking to transition from an executive career into the boardroom. So we'll be speaking to some leading figures in the board advisory and NED world. Specifically, we'll seek their counsel about how and where to spend time and energy to make an effective transition into the boardroom.
The goal is to equip recent and aspiring NEDs with tips, tactics and strategies to be most effective and build a successful career as a board director. In the process, we aim to help you to think more about who you are, how you operate and how you can make this work in the boardroom.
It is my pleasure today to introduce, Barry Gamble. Thank you Barry for making the time on a very hectic day. I know you've got many meetings today. By way of background, Barry is Senior Advisor to the Non-Executive Directors Association, Advisory Board member at Board Agenda Magazine and Chairman Boardroom City Debates.
Barry is an experienced, private and public company director and charity board director. At Fountain's PLC, he led a Private Equity MBO, Public Company IPO and with LightwaveRF PLC secondary fundraisings, including working with the takeover panel and an AIM de-admission. He was the first external Chairman for land agency and real estate firm, Fisher German, and through a role as Senior Advisor at Boudicca Proxy, he also has experience of activists, institutions and corporate boards in shareholder engagement and activist scenarios.
A former editor at large of Boardroom Magazine, alongside board advisory and NED roles, including working with several family offices, he regularly writes, speaks and leads debates about the challenge of board best practice, on which the Financial Times have published a number of his letters. Other recent assignments have been with the Institute of Directors, a member of the working party on the failure of governance at the Post Office and commissioner on the revisit of the Higgs review on NEDs, Henley Business School and the Cranfield School of Management.
Barry, welcome. I'm so looking forward to this.
Perhaps we can start with a general introduction from you and put some of that amazing background CV and pedigree into context.
[00:03:00] Barry Gamble: Oh gosh. I dunno, to what extent, Ralph one really says that one draws the dots really through a CV. I think I'm just quite lucky with a range of things that I've done, and unlike a number of other professionals I come across, I can actually say they always enjoyed the particular positions that I'm doing, and actually enjoy the mix of things that I do now. In fact, I think I enjoy the mix of things as much now as ever really.
[00:03:23] Ralph Grayson: And a little bit about how you found yourself in the center of the debate around boardrooms, governance, and best practice?
[00:03:29] Barry Gamble: That arose because I was approached to get involved with, Boardroom Magazine and they came up with this wonderful title Editor at Large, which I rather enjoyed having. So I worked with them for two, three years and that got me into writing and I got very interested in that interface between boards and shareholders, the interface with long-term investors, and although, you know, I would really not describe myself as a governance expert, I do think I understand quite a lot of the practical issues that impact boards and on shareholders and that's really how I got drawn into it.
The debates as such arose because on one occasion I was chairing anon-executive director supper club, which I did for a little while, and we were going to have a look at some changes to the then Corporate Governance Code and the idea was to have a panel session of experts and I rather concluded I thought that'd be rather tedious.
Why didn't we do a formal debate? And we did do a formal debate. We've not really looked back now cause I've done a dozen of them and they're on issues which challenge boards. We try to come up with a motion, which is edgy, a bit provocative, gets people thinking. But what underpins it really is the value of, good interchange, respectful debate, lots of listening, being prepared to really take on board views that one is not necessarily initially comfortable with and try to work with those and come to better decisions and the slightly mischievous element to this is that I just pose the question as to whether or not we have good evidence that in a typical boardroom business that we have good quality debate.
I get some quite interesting answers to people's views on whether or not they think that is the case or not. So that's the background as to why debates and thus far, I think with the debates that I've done, everyone's comes away by sort of saying yes, that was a different experience, I felt well engaged. I did see some nuances, some shades of gray in the view on the motion and that was something they found valuable.
So the upcoming debate I'm doing for the Quoted Companys Alliance shortly is the motion, "This house believes growing companies best thrive on public markets for the QCA a lobby group for public companies."
It's May the seventh, it's being held at the Institute of Chartered Accountants in Morgate Place. It's in their purpose-built auditorium. We have four to my mind, stellar debaters. Proposing a motion is a Henley Business School academic, Philip Morais seconded by immensely able and highly experienced, executive and non-executive, Dorothy Burwell.
And then opposing the motion, Jonathan Satchel. He's had experience of public markets, but he's opposing the motion, seconded by a corporate advisory boutique executive, Melbourne Metcalf. So we've got a great deal of, knowledge, in those debating teams. We've also got, and I've seen now who we've got on our list of those registered and I can tell you that we have some very, very, able and very knowledgeable people that are going to be there on the floor of the house contributing to the debate. So, Six o'clock, you need to be there on time. We run it absolutely to time. But you need to register go through to the QCA website. Numbers are very strong. We've already got an ante room with a monitor, for those that don't make the main cut in the main room, but we hope to accommodate as many as we possibly can, and, have a very lively time. I think the atmosphere will be electric.
[00:07:18] Ralph Grayson: I can't wait to listen to Johnny Satchel, because, Learning Technology is his business. He floated on AIMand they have recently delisted to enter the public equity world, and Johnny is a great speaker, very passionate, and I think he will be particularly interesting and prescient. And we're recording this on the day that De la Rue is announced that it also is leaving the main market to go into private equity hands as well. US money, as ever, putting a significant valuation as a private company,on a public market business, which I think is one of the longest, historical standing companies on the FTSE. Barry, you've also written a lot over the years,and I love reading your content. Always thought provoking, always very provocative.
One of the recent articles I read suggested that private investors have been abandoned by AIM. What's your take on the demise of public markets from a governance perspective in particular, and what do you think can be done from within the boardroom to influence it?
[00:08:22] Barry Gamble: Absolutely huge question. The particular point that I was making in relation to my contention that AIM had abandoned private investors was that as we've seen a significant number of companies leave AIM. They leave AIM and this is documented through a legally verified circular which sets out the basis on which that company is going to be leaving AIM.
But after the company has left AIM the degree of interest which AIM and other regulators seem to show in continuity of the,the plans that the board set out just seems to fall away and I think they're missing a huge trick. I understand they're very keen now to lower the level of regulation, make it very easy for companies to come on andcompanies to leave. But at the end of the day, companies need to have the trust of their shareholders. They need to have some continuity, and they need to be able to continue to raise capital, go back for capital, and I think that whole connection there between the way in whichthe boards seek the authority of shareholders to leave a marketand have some sort of continuity ofcommitment there isvery important.
From a board's point of view a non-executive director's role is pretty critical here because non-executives are the ones that take the lead on the governance. Of course, from a legal point of view, all directors have responsibility for governance, but the non-execs take the lead on governance. In terms of the way in which public markets work, I think it's pretty challenging for the non-executive directors if they find that the regulatory framework doesn't support the sort of approach that they want to take.
At the end of the day, governance just boils down to my mind of very simple principles, that it's ensuring that there is respect and trust and a communication and a dialogue goes on between,the board, the company, and its principal stakeholders, the shareholders, and that's what it's all about. Do the parties trust each other? Do they listen to each other? Is there a dialogue? Is there some shared endeavor together as they seek to try and maximize the position for shareholders and there isn't a management that holds the shareholders to ransom, which of course, you know, does happen in some situations.
[00:10:37] Ralph Grayson: What's your perspective on how shareholder primacy has perhaps changed in the recent past and the focus on stakeholders? Is there any particular trend that you see in that and is Trump going to affect that in any way, do you think?
[00:10:51] Barry Gamble: If one goes back to the likes of Cadbury and Roundtree, then I think the whole wider purpose for companies is well established. It's not a new idea at all. Trying to make sure that one operates a company with good moral principles. That you behave sensibly towards your employees, your suppliers, your customers.
Although it's written up slightly differently these days, I really don't think it's a new principle. But at the end of the day, I would argue that I think, you know, the primary stakeholder is the shareholders. Because at the end of the day, they do provide the capital. Equally, businesses don't get very far if they don't look after their customers. So, you know, the customers are right up there in terms of the importance in the stakeholder pecking order. It's an array of responsibilities, and I do believe that companies should run themselves with a good moral compass. But probably not fall into the trap of shouting about it too much.
[00:11:48] Ralph Grayson: Let's not go down an ESG rabbit hole here, but let just come back to titling maybe.
One of the letters you've written in the FT suggests that the title of non-executive director is the wrong title, and this chimes somewhat with something Graham Durgan, a previous guest, talked about-that the role of a non-executive director is now too onerous, too regulated, too important, not to have some sort of professional qualification or certification. So you maybe just elaborate a little bit on what your letter was trying to get at in this titling prefix "non" right or wrong-discuss.
[00:12:26] Barry Gamble: It was influenced by the fact that I was approached by the Institute of Directors to be one of the commissioners as they looked at Higgs, 20 odd years on, two decades on, and Higgs arose just, I mean, to remind ourselves on the back of WorldCom, Tyco, one or two quite spectacular corporate failures in the US, and so it was felt it was appropriate here in the UK to look to see, what were those external directors doing, and how had this come about? So Higgs was charged looking at the role of the non-executive director. But Higgs actually did say,in his report, over 20 years ago, the term non-executive director focuses on what they are not, rather than what they are, and he then goes into discussion as to what the alternatives might be.
But then rather disappointingly, he says at the end, "I did not suggest a change to the term", and I think that with the Institute of Directors now looking at revisiting Higgs, it is an opportunity to look to see whether one couldn't come up with a term which is more appropriate to recognize the importance of the role and to recognize that over the last 20 years that it's changed pretty significantly. It's probably going to continue to change, and I don't see this as being static. I think one of the things that I hope that the Institute of Directors will look at in this commission is not just set a template for what best practice might look like now, but also be very much concerned with setting a template for continuous improvement because the world continues to move on and the challenges that boards are seeing has changed pretty dramatically. I'm sure it will continue to do so.
So we might say, well, why would you bother with changing terms? But I think it is worth really looking at this and saying, let's get a better term. Let's try and come up with an expression, which better represents what these important directors are doing and trying to contribute and ensure that the boards are being well run, and not just avoid disaster, but they're being well run and they continue to be well run.
[00:14:34] Ralph Grayson: Let's just turn to the seemingly one-way traffic now of public companies going private and what that means for oversight, risk, governance and the fundamental difference between being a non-executive director in a private company as opposed to public company.
[00:14:51] Barry Gamble: Well, picking up whatGraham Durgan had commented on recently. He talked about the burdenof regulation and requirement. We've got various parties, shareholder groups, fund managers, proxy advisors, all come up with guidance as to how they want their boards to behave, and the sort of criteria which they're going to runto determine whether or not they'll vote with them come the annual general meeting. So there is this very, very significant volume of prescriptive material which boards, to my mind, almost need to wade through before they get to the things that really matter. You know, do they have their hand on the strategy? Are they monitoring the performance? Are they clear? What are the constraints to continuing to develop that business. What are the significant risks? You know, how are those being managed? There's lots of very, very critical big picture things, which I think is a significant danger that the degree of prescription and rules and regulations inhibit are getting to.
And I take a view that boards are full of bright, intelligent, highly trained professionals, but at the end of the day everyone has a bandwidth. Everyone has an energy level, and it's so, so vital in trying to run boards that the energy and the bandwidth is directed to the things that matter.
So I think there is a significant problem with a degree of prescription, particularly on public company boards, which means that it's pretty hard for those directors to make sure they're spending the time on the things that really matter. By contrast, probably in private companies it could be argued, well, yes, it's a lot less onerous, but you could certainly, with a private equity ownership, the alignment between the private equity owner andthe management is usually going to be very, very clear, at a very straight line and no ambiguity as to what would be the drivers forthe direction of performance they're trying to achieve.
So I think I paint a picture there of a very high level of burdenin relation to public company boards by comparison to private company. Hope that's not too simplistic, but I do believe it sort of feels a little bit like that at the moment.
[00:17:04] Ralph Grayson: Let's just move on following that theme to a brilliant expression that you've used, "Board Washing". We've had lots of washings, but Board Washing. What do you mean by that and what does that mean in terms of governance? Particularly, I presume of a public rather than a private company.
[00:17:19] Barry Gamble: Annual reports of public companies have now become more and more voluminous. They're full of governance statements, remuneration statements, all sorts of guidance on a whole host of things. The Post Office were quite an interesting example. Absolute stellar annual report. Often they're 200 pages long, 250 pages long. The danger is they're not read. They're not really looked at and I thought that directors, paint themselves in a picture whereby, you know, they're doing a great job. Everything in the garden is wonderful. Whereas in reality, probably not quite like that at all and so I felt there was a degree in which if people are overstate their credentials for EFG are greenwashing then I think anyone who really sort of over does it in their stating their credentials of what a great job they're doing in a board is probably running into the risk of board washing.
[00:18:12] Ralph Grayson: Board intelligence, I think have done some great workshops, which you can see, if you go on their website, there's some great webinars about how AI and technology may make that process more efficient and take away the 200 page document into it what are the three key things, driving, strategy and oversight?
Any views on how technology might help that or how boards are thinking about it?
[00:18:36] Barry Gamble: I mean, I think that is potentially quite exciting. It may sift and filter information. It may better prioritize the way the board should be paying attention. But I was interested in listening the other day toAndrew Kakabadse, who is from Henley Business School, and he was making the remark in relation to boards that, you know, it does involve, a certain amount of effort to read papers. It does involve a certain amount of effort to think and reason throughthe particular points that the board might be being asked to look at. So I think that whilst it's anything that improves the process and the flow and whatever is to be hugely welcomed, there still is going to have to be some, I think, quite a lot of brainpower applied by the directors to think about the issues, reason them, debate them, and make sure that the right things are done.
[00:19:32] Ralph Grayson: Makes me wonder whether the application of technologies of board governance is going to further change the style, nature, of people who join boards. Patrick Dunne, who was on a podcast a little earlier, has written a fantastic book on Five Generations. First time we have five generations working in a company and this trend of younger people, young generation boards who are, by definition, more tech savvy. Able to employ the skills to make the process more efficient. Any thoughts around how that might change the composition of a board?
[00:20:07] Barry Gamble: Clearly, board composition, has to continue to evolve. I don't know to what extent I feel it has evolved as much as it should have done, because although we've had this move to diversity. The real test is cognitive diversity, it strikes me, and I think you touch upon that because clearly if you've got people of whatever age and they happen to be particularly technically savvy, then that can really be a very, very valuable addition to the board.
But I hope that in doing that, you don't just bring one person on who's got those skills that can be quite an isolated position. At the end of the day, it needs to be influencing the whole way in which the board operate, the whole way in which it thinks the way in which it conducts its business and I'm going to use the word again, the way in which it debates the points which matter. Everyone I talk to come across too many people who don't complain about the length and,and weight of the board papers, whether that's coming through them on a tablet or a portal or whether it's a physical paper, but there's a huge amount to read through lot to digest. Often not very well presented and not as well presented as it could be.
I mean, there's a significant problem, isn't there for whoever's chairing that board, and drawing up the agenda, to try and make sure that the time is spent on the things that matter. That there is enough energy left to be curious about, well, hang on, what are we not being told? What do we need to drill down more deeply into? Are we having the right conversations? That's the challenge because at the end of the day, a board is a process. However good the IT, it still involves interchange, it involves individuals, it involves people's feelings and emotions, which will drive what the business is trying to do.
[00:21:47] Ralph Grayson: "The zone of uncomfortable debate" as Murray Steele talked about in one of our earlier podcasts. Trying to have serious debate, but still within a safe space in which the board can truly exchange ideas, question positions, for the best interest of the company. Which brings me back to thinking we've talked about "Non-Executive Directors" as a title, but actually we haven't put the prefix "Independent" non-executive director there.
And I particularly raise that in the context of going back to the private versus public board. It often strikes me that there is a lack of independence on manyprivate boards, because they've been appointed by investors rather than necessarily, particularly at earlier stage, scale up stage, founders don't really know what they're looking for in terms of best advice. That Yoda on the shoulder, the trusted advisor and often when I'm involved with some board searches, the bankers, the brokers, will have made their own recommendations, which always slightly raises an eyebrow with me in terms of whether they're truly independent in who they're acting for. And also, there was arecent event, at the QCA, which James Ashton was speaking at with Norman Broadbent and that brought out some data that still today over two thirds (may indeed have been three quarters) of all NED appointments are done through informal networking rather than an open, search process.
Any ideas from your perspective on how maybe that is changing or indeed should change?
[00:23:24] Barry Gamble: So I think there's two points here, Ralph, that you're raising, around the word independent. One is the extent to which there is an independent process for the appointment of non-executive directors on boards. And you cite recent evidence that suggests that the dial has not moved a very great deal that still a number of appointments are made informally through contacts. It's a fact anyway, isn't it? . A lot of the private equity houses keep their own bank of non-executive directors, that they turn to.
It's striking isn't it? That, one looks at the role of a director, and I'm, saying here any director, the director has a responsibility under the Company's Act to ensure the success, the continuing success of the business. That's the sort of fundamental tenet of the responsibilities of any director.
It's not to be a representative of a particular group, but actually the way in which often is, your alluding to these directors that are appointed is to do that very role. To actually be the representative of that particular shareholding interest. So there is an inherent tension there. I think sometimes it's not even a very wide understanding as to what that role is, and that those directors that are appointed think that their primary role is to represent the interests of the shareholder that appointed them.
[00:24:48] Ralph Grayson: Yeah, I think it's a caveat here for any founder at Series A, Series B level when they taken the right venture capital money as opposed to the wrong venture capital money. If that VC requests, demands, whatever the word would be, a seat on the board, that investor rep is not an independent NED, and consciously or subconsciously, they are driven by the need to have an exit for the fund because they need to have an exit for the fund, which means they can raise the next fund because that's where they make their money from.
So by definition, they're putting a timeline on the founder.Which is why, within many of the terms you see, the preemption, the drag along rights, which don't represent the best interest of the founder, certainly don't represent the best interests of the early stage investors. So to my mind raises the whole question of is a board independent if it has investor directors on it?
[00:25:42] Barry Gamble: I think it's a real issue for founders that are, as you say, looking to, attract new capital into a,business. It's quite hard, I think, to find a non-executive director who's able to look to the whole position and try and make sure the founders do get proper advice and they're not just railroaded by a particular party and that could so easily happen. That advisors, providers of capital, look to their own agenda rather than necessarily the agenda of the individual that may have started the business, who've got all the energy, the drive, the impetus to try and make sure it succeeds.
So, just might well be a gap that you're alluding to.
[00:26:20] Ralph Grayson: Turning to gaps, your next big project, I believe is with the IOD to revisit the Higgs Review. Some two decades on Wow. Much has changed in the boardroom during that period. Could you elaborate perhaps on what you think has changed, why it's changed and without preempting what you might find in the IOD report, what are the key topics you expect to be examining?
[00:26:45] Barry Gamble: Well, the two particular areas that we're going to be looking at is behavior and then the role, what is the role of this director? What should they be expected to do? Because, again, Higgs is quite light on this. If you really look at it, Higgs is quite light on trying to do, trying to tell us what this role encompasses.
So we want to look at both of those things. What's changed? I think is interesting because you already made some reference to more technology coming into the boardroom. You've made reference to AI. You've made reference to good IT capabilities, probably coming from younger board members.
What has changed though is that over the last 20 years or so is that now our news flow is instant. The likelihood that news which might have stayed within the boardroom, it breaks out is so, so much higher. Boards have to be so much more alert to my mind, to the fact that they don't operate within some wonderful cocoon and that, information will not break out.
There's some American work by the National Association of Corporate Directors, and I looked at this quite recently. It was interesting and it was really posing the question to what extent boards now need to be conducting their affairs on the basis that pretty much anything that is discussed in the board could break out into the public domain at any time.
And, I think because of the role of the social media, there's clearly a very high likelihood of that and it goes a bit further to my mind in that where boards go wrong and where we've had governance scandals, we touched upon the Post Office, which are involved on the working party there.
Boards to my mind, fall into a huge trap, in they've got a problem, they tend to work doubly hard to protect the reputation of the entity and of the individual directors rather than, standing up, being prepared to admit they've got a problem, probably to admit that publicly and then do something about it.
And the Post Office was a classic example where the received wisdom was, they were on the right lines, they knew what they were doing, there was a lack of questioning, curiosity, challenge, and that needs to be instilled into the way in which the board operates. Boards to my mind need to be operating in much more of a transparent mindset.
Now clearly there are things, commercially sensitive, there's no way that we'll want those to break out into the public domain. But there's a lot of other stuff in terms of the way in which the board operates in terms of transparency, that I would argue that would be far better and more healthly out there into the public domain.
[00:29:42] Ralph Grayson: Reputational risk, right? I mean the personal reputational risk of somebody going particularly on a public board now. So for our new and aspiring NEDs listening to this, risk and return, still worth it?
[00:29:54] Barry Gamble: Well, I think there is an issue probably about the compensation which non-executive directors enjoy. But having said that, I mean, you know, there is a significant supply of would be non-executive directors. I mean there are all sorts of bodies that promote training for non-executive directors. Encourage people as they reach a particular stage of their career or they're partway through a career and to try and enable them and encourage them to take on external roles. I mean, I think it is rewarding. I think it's rewarding in the sense of being able to help other organizations being able to be there. Often, I would say most critical part is being able to listen, act as a sounding board, for the founders and for the other members of the board.
Do not underestimate the value of that, such that the founder and thekey people in the executive can think out loud. They've got a safe space. They can articulate their thinking, their fears, their worries, and you are there to try and helpchannel where they're going and what they're trying to do. It is, I think, quite rewarding.
[00:31:02] Ralph Grayson: The other thing I would add on the personal reputation of course, is do ask as a candidate what the indemnity insurance is. We'll bring this to a close.
Time has really dashed on.How does somebody follow you, LinkedIn? How do they, apart from having a subscription to the Financial Times, how do they continue to track your musing, your pontifications and let's finish it off with another plug at the end, for the upcoming debate in a few weeks time.
[00:31:29] Barry Gamble: I do use LinkedIn. I try to use it in a proportionate way if there are things going on. Lots of interesting people pop up from time to time, that you can engage with and so I think to that extent, LinkedIn does serve its purpose provided one uses it sensibly.
Take a subscription to the Financial Times may be. I have been lucky enough to have a number of letters published there. There will probably be one or two others coming up, but there's nothing in the pipeline at the moment. The idea has to take me. But the hit rate's been pretty high, so I enjoy doing those and trying to come up with something a little bit mischievous, a little bit edgy, which gets people thinking, and that's what I seek to do.
I did not in any way claim to have all the answers, but I hope I can always try to help pose the question.
[00:32:10] Ralph Grayson: So to finish off with a Debate then, which you'll be chairing in a couple of weeks time, just remind us where and when.
[00:32:15] Barry Gamble: Institute of Chartered Accountants, Morgate place, you need to be there at six o'clock on, Wednesday the 7th of May. But you need to register beforehand on the Quoted Company's Alliance website.
[00:32:28] Ralph Grayson: Barry, thank you so much for all of that. I, for one, will certainly be at the debate and looking forward to it very much. Thank you.
I hope that you've enjoyed listening to this podcast and have found it helpful when thinking about how to approach your own path to the boardroom. If you would like to push this a little bit further, Sainty Hird runs a bespoke one to one programme designed specifically to this end. For more information, please visit our website, saintyhird.com, follow us on LinkedIn, and subscribe to the Boardroom Path to receive new episodes. Thank you for listening.