Bird & Co.

Recent research reveals that the British company board system is potentially the most effective in the world, but that there is a strong need to upgrade the way boards operate if they are to be truly effective. The Bird Report, based on open interviews with 100 Chairmen, CEOs and Non-Executive Directors, identifies a number of ways in which the best-performing boards distance themselves from the also-rans. Best-in-class boardroom dynamics The consensus view from those interviewed, many of whom sit on boards in the FTSE 350, was that the truly outstanding boards have strong Chairmen who foster a productive working partnership with the CEO, and marshal a board with the appropriate fusion of talent and experience across all its members, executive and non-executive. The Chairman creates a forum where the Non-Executives, independent of mind and of purse, have license to call the board to account and the ability to be instrumental in the company’s long-term success. New Non-Executives are selected for their relevance to the company’s future objectives and are given a thorough induction to the business, such that they can contribute rapidly to the board. However, the Bird & Co Report also discovered considerable dissatisfaction with some current practices, which detract from the effectiveness of the board, as well as from the perceived value of Non-Executives. Weak Chairmen, egotistical CEOs, and NEDs who are inappropriately nominated and too cognizant of their own income to challenge or criticize, were all cited as ingredients for inevitably dysfunctional boards. The new-look Non-Executive Director Most respondents recognized the need to expand the pool of talent from which NEDs are drawn, which currently focuses too narrowly on the FTSE 100 and on the financial community. There is a new breed of NED, generally younger, currently in a key executive role, though not necessarily a CEO, who brings a breadth of commercial experience and is prepared to spend the necessary time understanding the business. Bird & Co 19 Cavendish Square London W1G 0PL contact@bird-co.com Tel: 020 7306 9600 Fax: 020 7306 9601