Ian Durant is Chairman of Capital & Counties Properties plc and Greggs plc. He is also the Senior Independent Director of Greene King plc and a Non Executive Director at Home Retail Group plc.
What are the strengths and weaknesses of the UK’s model of governance?
I’m a firm supporter of ‘comply or explain’ but its success depends on constructive dialogue between a company and its shareholders, allowing sensible deviations from the Code. The financial crisis has damaged trust between shareholders and companies giving rise to increased scrutiny and a more difficult interchange. This makes shareholder dialogue more important than ever. But outside of the FTSE 100 it can be hard to command sufficient time with investors to build that dialogue.
What do you consider the biggest challenge for a plc board?
Being on a public company board can be constraining. What one group of shareholders may want and what’s in the best and long-term interests of the company won’t always align. But our job isn’t supposed to be easy. It’s up to the directors to grapple with dissonant voices.
Has the way boards operate changed much in the last few years?
I’ve noticed a positive trend toward smaller boards, with just the CEO and CFO representing the executive at the table. Smaller groups are more efficient and conducive to real debate. But this only works if the board is prepared to take time outside of the board meeting to really get to know the wider executive.
Building a relationship between management and the board is critical. Non executives should appreciate that their role goes beyond providing a check on management. They’re also there to help management fulfill their potential and that of the business. It’s a two way street. I try to encourage management teams to be up front about problems they’re facing — there’s no value to be had from playing hide and seek.
How do you see the role of the Company Secretary?
The Company Secretary is the ringmaster. And the most skilled Company Secretary, as a member of the executive, will position governance as more than the preserve of the board. Governance must not be seen as something ‘foisted’ onto management. Management must own it too.
How important is information in the boardroom?
Information oils the wheels of effective governance. The best boards continually question and refine the information they receive and that goes beyond making improvements to the board pack. The board has a duty to get out and listen to management and familiarise themselves with the front line of the business.
What government policy would you introduce to support British enterprise?
It’s the role of government to create an environment conducive to business, encouraging investment and private sector activity. And there are three ways the government can make a difference. Firstly, by investing in the long-term infrastructure of the country. Secondly, by simplifying the tax regime. And thirdly, by creating a robust and internationally respected regulatory framework that is neither too lenient nor too prohibitive.
On the matter of tax, the bigger issue is the complexity rather than the rate. A lot of boards are struggling with the moral judgments around tax planning — what is prudent and what is unethical? But again, as with the challenge of balancing long and short-term interests, it’s these difficult judgments that we’re paid to make.
How will the UK’s global influence change over the next decade?
We need to acknowledge the UK’s diminishing impact on the world stage. But I think there will be growth opportunities within this. The advice I’ve given my children is to consider how consumer habits and technology are changing the world and to align themselves with the businesses that understand this.
What book is on your beside table?
The Infatuations by Javier Marías. It is so much more than just a murder mystery.
What is your golden rule?
Be true to your own convictions. You can find yourself unpopular when conflicts arise and it’s important to maintain your integrity.