Alison Carnwath is Chair of Land Securities; SID at Man Group and on the board of Barclays, MF Global and ISIS Equity Partners. Alison is also a Senior Advisor to Lexicon Partners.
What would make UK boardrooms more effective?
We need a more honest and rigorous assessment of how boards add value. Board members are now required to demonstrate a stellar career background and director tenure is limited so that boards are refreshed. But will these developments alone translate into more effective boards?
Board effectiveness is hard to tackle in abstract as every board is different. One of the common challenges is achieving the right level of debate at board meetings. If the company is a complex, multinational and there are 8 or so agenda items to cover at a meeting, the debate has to remain at a high level. Delegating work to committees is becoming more important, as they have the time that the board often lacks to focus on specific areas of the business. They can develop a much better understanding of operational issues and hold more detailed and in-depth debate.
Alternatively board meetings need to be longer and more frequent, with directors paid appropriately for their contribution. This would make non-executives semi-professional and potentially less independent but it would give the board the time it needs to be effective. During the recent economic crisis, boards of financial service firms were having board meetings twice a week.
Of course there is no one course of action that is right for every board. It will always depend on the specific situation.
What is your golden rule?
Never mislead anyone.
What was the smartest business decision you’ve witnessed?
There are two that stand out. The first was when I was in banking and went to see Racal Telecoms who were raising funds to be one of the first movers in the UK mobile market. They are now better known as Vodafone.
The second was in 2000, shortly after I became a director of ED&F Man. The commodities business division was sold back to management and Stanley Fink took this opportunity to spin out a hedge fund business, Man Group.
Both decisions were made by exceptional individuals who saw opportunities for transformational changes within their industries.
Which industries would you back for the next decade?
Financial services and resource industries, particularly anything related to extraction and distribution of commodities. Financial services is crucial to our world — you can’t do anything without money, even governments need banks and the market for financial services will grow as emerging markets mature.
Who do you go to for advice?
Two people, both of whom are former bosses and know me very well. Both have been, or are now, Chairmen of FTSE companies.
What book is on your bedside table?
My kindle. I’ve just finished the Big Short and I’m looking forward to starting on the Man Booker shortlist before the award ceremony in October.