Our client was an international FTSE 100 financial services business. It had a strong and experienced management team, supported by a stable Board, who had together brought the business out of a crisis period and established it as a consistently top quartile performer. Nevertheless, the Board had never had an external review of its effectiveness and the Chairman was keen to get objective counsel on how its contributions could be further improved given the future challenges faced.
We started by gaining input from the Chairman and the CEO on what they saw as the major challenges faced by the business and the Board, and proposed a tailored set of key questions to enable detailed exploration of their most important issues and concerns. We then had detailed one-to-one discussions with each of the Directors, in which we explored their perspectives on issues including: the Board’s role in the future in supporting the business; its collective capabilities against those required; how well the Board understood the business and the effectiveness of both formal and informal information flows; how the Board spent its time across different activities and how well this compared to its priorities; how well Board and Committee meetings operated and the key behavioural dynamics; the relationships between the Chairman and CEO, and the Non-Executives and Executive team; and how well the Board delivered against its five major tasks of shaping strategy, monitoring performance, succession planning, managing key stakeholders and providing stewardship. Finally, we gathered feedback on the strengths and development areas for each Director.
Based on these interviews, we developed a detailed report laying out our findings and recommendations. This synthesised the key findings from our discussions, provided our insights on how well the Board was delivering against its key priorities, highlighted key areas for improvement and proposed possible actions. We first discussed this with the Chairman and the CEO, and then sent the report to the Board, before facilitating a Board discussion of the findings that led to the agreement of a concrete action plan. Key agreed changes included: developing and kicking off a comprehensive Board succession plan; introducing the role of Senior Independent Director; regularising NED-only dinners; formalising and strengthening the review process for both the Chairman and CEO; and expanding the degree of informal interaction between Non-Executives and Executives. Each Director also received a personal development plan from the Chairman, based on our input.
These changes were implemented and have further strengthened the Board’s effectiveness, through a carefully sequenced programme of Non-Executive Director replacement and the development of an even more open and robust Board culture.