Charlie Mayfield is Chairman of the John Lewis Partnership, the UK Commission for Employment and Skills and President of the Employee Ownership Association.
What changes would you make to UK boardrooms to make them more effective?
A board should bring together a diverse set of views around a common purpose, to take decisions in the interests of the broadest set of stakeholders. But the composition of many boards appears to have the interests of just one stakeholder at heart: the shareholder.
Our board is unconventional. The Partnership Council elects five Partners to our main board so the interests of both employee and shareholder are well represented. But you can’t just lift and drop our model onto another organisation and expect it to thrive. You need to create the right conditions for employee representation on the board. The Chairman must promote a supportive atmosphere in the boardroom and the legitimacy of the Partners’ position on our board is important too. They are elected by the people they represent and since the Partners own the business, the interests of employee and shareholder are not pitted against each other.
How important do you consider information to be in the boardroom?
The better informed the board, the easier it is to focus on what matters. But it’s hard to do this well. The information sent to the board needs to be mindful of the time constraints of the directors and the background of each member. Our board combines directors with a wide range of experience, so it’s important that the briefing materials are clear and that we bridge any knowledge gaps.
We’re challenging ourselves at the moment to improve how we report on the non-financial drivers of value. Our ownership model is a key source of our competitive advantage and improving the way that we measure and report on this is a priority.
How could, or should, the role of the Company Secretary evolve to better support the board?
Company Secretaries should be wary of compliance dominating their role, to the exclusion of all else. Of course, the board needs to stay on top of the latest regulatory developments and it’s the Company Secretary’s job to make sure of this, but this isn’t their only role. For instance, they have a pivotal role to play in making sure the board has access to the information it needs and anticipating what those needs will be.
What single government policy change would you like to make to support British enterprise?
I’d set a target to increase the plurality of ownership models in the UK. The John Lewis Partnership is configured in such a way that we cannot be sold. There can be no exit and so, by nature, we are in it for the long term. Too many businesses are set up with an exit in mind from the start and it seems regrettable that the tax system is biased to rewarding the ‘sale’ rather than the ‘growth’ of businesses.
Which sectors would you back for the next decade?
I think we’ve become over-reliant on financial services. I wouldn’t set out to weaken our financial sector but I would actively encourage other sectors to flourish — we have many sectors with great potential such as the creative and cultural industries, the life sciences, construction, IT, and advanced manufacturing. We have a strong track record in these fields which we should build on.
I believe in small government but I think there’s more the government could do to create the conditions for business to succeed. We are blessed with a time zone that we could use to our advantage as the nexus between east and west. We should capitalise on this.
What book is on your bedside table?
Thinking, Fast and Slow by Daniel Kahneman.
What is the smartest business decision you’ve made?
We have made several important decisions at the Partnership over many years. But the three that stand out to me are:
- The decision to back the internet seriously;
- The decision to accelerate our growth;
- The decision to nurture the Partnership model, as a major source of competitive advantage.
What is your golden rule?