David Tyler is the Chairman of Sainsbury’s PLC, Hammerson and Domestic & General Group Limited. Previously, he was Chairman of Logica and 3i Quoted Private Equity. David has also been a Non-Executive Director at Experian, Reckitt Benckiser Group and Burberry Group.
What changes would you make to UK boards to make them more effective?
The UK has some of the best governance standards in the world, so there isn’t anything material I’d change.
If I did anything, I would enhance the focus on value creation. Boards are there to create value for the medium and long term, but they can sometimes get bogged down in matters like accounting controls and remuneration targets.
Boards don’t always find the right balance between working as a policeman and operating as a strategic hub — and it’s important to get that right. If you want an enthusiastic board, you will succeed if directors are debating the big issues rather than getting lost in the day-to-day detail.
In any case, a board obviously cannot just be a policeman. People talk about the big frauds like Enron, but much more often companies trip up because they get the strategy wrong.
Have boards changed over the last few years, and if so how?
I’ve been on Plc boards for 28 years and they’ve changed a lot over that time.
For example, board evaluations have changed the way boards operate. In the 1980s and 90s, Chairmen were all powerful and the thought of evaluating the performance of the Chairman would have been almost as unlikely as evaluating the performance of the Queen! Now Chairman evaluation is a standard part of good governance.
Have you noticed investors becoming more vocal, not just in terms of specific issues but how they hold boards to account?
Yes, and it’s not just the activist investors, it’s normal long-only investors who are more emboldened and confident than they might have been 20 or so years ago. Provided investors do not give an arrogant impression of knowing more about the business than the management, these debates can be very healthy for the company.
What’s your biggest bugbear around board information?
Too much data and not enough insight.
What is your proudest achievement or best business decision?
My proudest achievement was helping to lead the change of GUS from an unfocused and un-reconstructed conglomerate in 1997, to the focused four businesses that we set up as four different public companies at the end of 2006. Doing that, and getting the board, management and investors aligned was a huge undertaking — it was a marathon not a sprint — and created a great deal of value for shareholders.
Another event has been my association with Argos. People tease me that I am the man who loved Argos so much that I bought it twice! In GUS in 1988 and in Sainsbury’s in 2016. But there were very good reasons in both cases.
Are boards out of touch with society?
No, they’re more in touch than they ever were. They’re more diverse and more thoughtful. There is a danger that society has changed. More than ever it tends to look for someone to blame — it tends to always be somebody else’s fault. The motives of people tend to be impugned too much, whether you are a politician or a business person. In my experience, most people running businesses have a relatively modest background and are honest people. But this reality does not tend to create much traction in the media.
Businesses appear to me to be less trusted than they were in the past, but in my experience, they are run much better today than they were 20 or more years ago. That’s a challenging contradiction.
What should the government be doing to support businesses?
Remember that investors always have a choice to invest either in the UK or elsewhere. Ensuring they choose the former is essential if we are to have the best jobs here in the future.
What book do you have on your bedside table?
Suite Française by Irène Némirovsky. It’s about the abandonment of Paris in 1940 as the Nazis walk in, and the impact on French society. It’s brilliantly written.
What is your Golden Rule?
People first. Listen to your colleagues and look after them by creating a positive “can-do” environment. Within this, provide calm, supportive leadership.