David Bennett is chair of Ashmore Group, the investment manager, deputy chair of Virgin Money UK, and a NED of PayPal Europe. He was formerly chair of Homeserve Membership and Together Financial Services, as well as a NED of Bank of Ireland UK, easyJet, and CMC Markets. Prior to embarking on a plural career, David was Group CEO of Alliance & Leicester plc.
If you could wave a magic wand, how would you make boards more effective?
I’d get the chair, CEO, and company secretary to really take the time to sit together before each Board meeting and ask ‘What are the big issues we need to discuss next month?’, rather than just crank the handle and churn out last meeting’s agenda plus items from the rolling agenda with a few new items for approval or discussion sprinkled on top. Poorly thought-through agendas are one of my biggest bugbears.
There’s safety in familiarity and repetition, and you’re going to end up discussing and understanding these recurring points really well and thoroughly — but are they the key things you should really be looking at in the first place?
Take, for example, the relationship with the public, which the Financial Services industry has undoubtedly struggled with over the last decade. Organisations like banks are important parts of the economy, and whilst they’ve had huge problems they also do a lot of good for society: they support businesses, enable people to buy houses, and participate economically, just to name a few. Yet, the positive impact they’re having is barely covered in their own boardrooms. And when you don’t articulate at board level the value the business brings to all stakeholders, the rest of the organisation cannot communicate it externally, and the outside world ends up not seeing it.
In Financial Services, board papers are all-too-naturally focused on past numbers and events, and lead to many boards driving using only the rear-view mirror. Instead of spending so much time and energy looking back at historical data, why aren’t we talking about how many businesses we help expand, or how many families we protect from catastrophic events or assist through managing their pensions?
Have boards changed over the last few years, and if so how?
For starters, they have become much more professional. What used to be an end-of-career occupation is now a career in itself. People join boards earlier in their lives and have a clearer understanding of the time and involvement needed to do the job properly.
The downside is that boards have also become much more risk averse. This is, in part, due to the far greater risks for directors if things go wrong — especially in Financial Services — as well as the increase in regulation such as the Senior Managers and Certification Regime. But it also illustrates the changing demands around their very role.
There are many ongoing questions regarding what we, as a whole, want business to be about. Is it here to drive economic growth, or does it have other missions? Society hasn’t yet resolved that debate, which means directors currently sit at a crossroads of conflicting pressures. And without a clear goal it’s hard to define your corporate purpose.
What book do you have on your bedside table?
I currently have two, which I read depending on the mood I’m in.
The first one is This Is Going To Hurt, by Adam Kay — when I need cheering up.
And the second is The Wages of Destruction, by Adam Tooze — a much heavier read, about the Nazi economy and how Nazi Germany kept it working through various accounting tricks. It just goes to show that off-balance-sheet financing isn’t a new thing.
What is your Golden Rule?
Don’t judge those who try and fail, judge those who fail to try.
I like people who have scars, people who’ve tried to set up a business and it hasn’t worked. The negatives are outweighed by the positives. We’re often far too unforgiving of those who’ve made mistakes, despite everything they might have learnt through them.