Charles Gurassa is Chairman of Genesis Housing Association, Deputy Chairman of easyJet and the National Trust, and the Senior Independent Director of Merlin Entertainments. He was formerly Chairman of Virgin Mobile, LOVEFiLM, Alamo/National and Phones4U.
What is the secret to an effective board?
Firstly, all boards need high quality information around which to formulate their judgement and challenge. When the board is provided with relevant and well-presented information, the quality of debate goes up a level and you enable a much more intelligent discussion with your board. Board Intelligence’s work with easyJet is a great exemplar of this in practice.
The irony is that some management teams shy away from this style of reporting for fear of micro-management or an unsympathetic response to performance issues. In my experience the more the board understand what is going on, the better and more balanced their input and response.
Secondly, boards should think long and hard about what is the right mix of skills and experience that are needed around the table to help the business succeed. Of course boards have a responsibility to ensure shareholders' funds are managed sensibly but they also want to make sure the business is a success.
Therefore, both individually and collectively, the independent directors should bring relevant skills that can assist the executives as they develop and execute the strategy. If your business is set to expand overseas and none of your directors have international experience, you’re in trouble. Sometimes boards recruit in their own image and that lack of breadth and diversity undermines their ability to fulfill their role and realise the full potential of the organisation.
Finally, I would put greater emphasis on board development to help every director contribute to the best of their ability. As we appoint more directors with diverse skills and experience, we shouldn’t assume a ‘one-size-fits-all’ development programme is adequate.
Is it harder for listed companies to think long term?
In my own experience privately owned businesses are often better placed to make long term decisions. And there is more we could do to incentivise long-termism in our capital markets.
To take one example: before 2008 we used to offer taper relief on capital gains for every year that you held an investment. I would strongly consider bringing that back.
What government policy would you introduce to support British enterprise?
There are two things I would do.
Firstly, I would ensure we stay in the EU and campaign hard for further reform to improve the working of the single market. We enjoy membership of the single biggest market in the world and it’s economic madness to contemplate leaving. It would put Britain and British businesses at a severe economic disadvantage.
Secondly, I would continue to seek ways to improve access and availability to funding for start-ups and early stage businesses. Our economic growth and prosperity in the future will be driven by innovation and new businesses. The generation coming out of our schools and universities today are more entrepreneurial and ambitious than ever before. But unlike in the US, our venture capital community is underdeveloped and this will hold us back.
How will the UK’s global influence change over the next decade?
With the rise of Asia our global influence may decline on a relative basis, but that doesn’t mean we can’t prosper. We have a wonderful heritage that we should continue to promote and we should build on areas like the creative industries, pharmaceuticals, defence and tourism. As a country we remain a model of stability with an enviable legal and political system. And this, coupled with our position in the largest and wealthiest market in the world, makes us an attractive place to invest.
I also think we can achieve great things in partnership with our European neighbours. Chancellor Merkel and Prime Minister Cameron recently announced plans for cross-border collaboration between our two countries to develop 5G and other technologies linked to the Internet of Things. Vodafone, Shell, Reed Elsevier, Airbus – these are all European success stories and we should strive to repeat the formula.
Which companies or sectors would you back for the next decade?
We have an aging, wealthy population. Fish where there are fish!
Businesses that provide attractive intermediate residential alternatives to last stage care homes will do well. And healthcare should be set for growth.
What is the smartest business decision you’ve made?
Back in the early 2000s Whitbread had the opportunity to buy Premier Lodge - a chain of 140 budget hotels. At the time we were a restaurant and pub business with a relatively small budget hotel business. And this deal had the potential to catapult us to market leader in the sector. Our share price was flat and management were nervous of the acquisition. But in an unusual reversal of roles the board enthusiastically counselled management to do the deal.
The share price has since risen 5-fold. And much of Whitbread’s success can be traced back to that decision.
What book is on your beside table?
I am a history lover and I’ve just enjoyed The Sleepwalkers by Christopher Clark which explores in detail the decisions and decision makers that led to the outbreak of World War One. But instead of the usual ‘who’s fault?’ questions, this book is concerned with why it happened, when plenty of other flashpoints which could have sparked a war didn’t.
The idea that we can sleepwalk into war and that events can conflate in unplanned ways, gives us a lot to think about.
What is your golden rule?
To paraphrase the former president of the French multi-national, Saint-Gobain: "whenever someone comes into my office they should leave feeling better than when they came in."