Glen Moreno is a director and former CEO of Fidelity International. He was previously chair of Virgin Money and Pearson, as well as deputy chair of Lloyds Banking Group and the Financial Reporting Council. Glen spent his early career at Citigroup, where he held senior positions in Europe and Asia and was a member of the group’s Policy Committee. He is an honorary governor of the Ditchley Foundation.
What changes would you make to UK boardrooms to make them more effective?
If I had only one lever at my disposal, I’d concentrate on making boards more diverse. There are plenty of well-known arguments in favour of that, but two less evident ones stand out to me:
- First, it’s really tough to recruit good non-executive directors. A diversity-friendly policy expands the available talent pool, making that process much easier. It sounds painfully obvious nowadays, but it wasn’t too long ago that simply being gender-diverse could give you an edge: you’d have first pick at all these great people others weren’t looking at as seriously as they should — which was truly bizarre, considering almost all the leaders of the biggest board recruiting firms were women.
- Secondly, by the time they go plural, the run-of-the-mill male executives usually are in their late 50s or have reached retirement age. Whereas women (possibly because of factors such as the glass ceiling) tend to do it at an earlier stage of their career — and that allows you to bring on board the highly technical, digital-savvy forty-year-olds every business must include around the board table today.
Most companies are only getting started with diversity beyond gender and ethnicity, such as diverse experience, but the same logic applies: it helps you strengthen your team by giving you greater access to the superstars you need.
Has the way boards operate changed much in the last few years?
Collectively and individually, non-executives are under more scrutiny — even more so in Financial Services with the Senior Managers’ Regime. Regulators want board members to have the same knowledge as executives, and time commitment has increased dramatically as a result.
The good boards are changing their ways to get more value from their time-squeezed members: discussions have become less formal, more interactive, and more focused. Most notably, it’s now much easier to ask questions and challenge what’s being said.
What would your perfect board pack look like?
You can tell at a glance if a paper was designed for the board or if, like so often, it’s a bunch of reports agglomerated in a single document. Photocopied memos with a cover slapped on top don’t make a board paper!
Board papers have to be focused, and outline the issues, the options, and the decisions to be made. Learning to write a good board paper is a great executive skill many have “unlearned” over the years as they piled more and more in. I often read board packs that are over 1,000 pages… you’re usually 400 pages in before you get to the strategic bits, and by the end I sometimes have one question for the author: “What are you trying to hide in this?”
Great boards and committees have confident chairs, who aren’t afraid to push back when reports aren’t fit for purpose. They’re not simply saying “I don’t want this information”, they’re telling management “You’re not providing meaningful information — just numbers”.
What is your proudest achievement or the smartest business decision you’ve made?
The most difficult thing for a company is growing the top-line. Every company is good at controlling costs — with all those accountants on their boards — but selling more products to more people is the hard part.
When I was CEO at Fidelity around 1990, a couple of us decided we wanted to start an international fund business so we could sell across borders. We went to the UK government, and they told us to forget it as the required changes to legislation would be too slow and complicated to undertake.
That didn’t deter us: we went to Luxembourg and set up the business there instead. Today, Fidelity Funds Luxembourg manages $130bn.
Are boards out of touch with society? If so, how can they re-engage?
A huge number of businesspeople in the UK are chartered accountants by training — sometimes, they make up to three-quarters of the board. But they have a certain way of looking at the world — and it’s neither the only lens a company should be using, nor the one that always resonates best with the public.
That takes us back to the importance of diversity: beyond the hard skills it brings in-house, it’s also a prerequisite to relate to a diverse society. Successful organisations reflect their customers, and you can’t do that through a monoculture.
Beyond that, companies need to be clear on their purpose: what are they here for, and what are they doing for their customers? If you’re close to your customers, you’ve already solved most of the challenges in getting close to society.
How can government best support business?
Governments should ensure a level playing field. There are still lots of oligopolies and monopolies, disparities in terms of competition or taxation, and leftover cronyism.
What book is on your bedside table?
Not a book, but rather an audiobook: I’ve just finished A Dance to the Music of Time, by Anthony Powell — my favourite English 20th-century novel. I hadn’t read it for 30 years, and to be truthful I wouldn’t have gone through the 12 books again, but the audiobook format was an opportunity to rediscover it.
What luxury item would you take on a desert island?
A flamenco guitar. I could finally practice — I’m terrible!
What is your Golden Rule?
Don’t underestimate people. It’s the biggest mistake you can make.