Ken Olisa is Chairman of Restoration Partners, the technology merchant bank, and a Non Executive Director of Thomson Reuters and The Institute of Directors. Ken was a board member of ENRC, the FTSE 100 mining company, which he described in a notorious valedictory letter as “more Soviet than City”.
What would you do to make boards more effective?
I would do two things.
Firstly, I’d make sure that boards focus 90% on the future, 10% on the past. You wouldn't drive a car by looking only in the rear-view mirror and you can't run an effective board or business that way either. But partly due to regulators and partly due to habit, more and more board time is occupied with scrutiny of past events.
Secondly, I would overhaul what boards do with their time. Non-executives should get out of the boardroom and spend more time with their staff and customers.
And when we are in the boardroom, we would use our time better if we abandoned the ‘high church’ rituals. Wasting the first half an hour reviewing minutes and matters arising does little to set the scene for a rich debate.
What do you see as the main difference between public and private sector boards?
Public companies are fundamentally risk averse – the principal objective is to stay out of trouble.
Private companies are able to focus on achieving a unifying purpose – usually, generating wealth.
Has the way boards operate changed much in the last few years?
This is a tale in two parts. Regulation has made things harder, born out of the misguided notion that it was a lack of regulation that led to the global financial crisis. In reality the crisis was triggered in the United States, which was subject to a stringent rules-based regulatory regime at the time.
The UK will abandon our principles-based regulatory regime at our peril. Boards must be left to get on with their job within a regulatory framework and not subjected to second-guessing.
That said, change hasn’t been all bad.
Board talent is drawn from an increasingly wide talent pool. 'NED-land' is much less of a club than it used to be. And there is more transparency, which has a healthy self-regulating influence, keeping everyone on their toes and warding off paranoia.
Is the information flow in most boardrooms fit for purpose?
No. We need to change the nature of the information that is sent to the board.
Last period’s financials and backward looking operational detail are not conducive to a forward looking conversation.
What government policy would you introduce to support British enterprise?
We need to liberate small firm lending. Small businesses will be our growth engine but banks are demanding such high collateral that taking a loan is prohibitive.
Instead of high levels of collateral, small businesses should buy insurance to underwrite their loans. This would transform their access to capital and it would be a spur to innovation and enterprise.
How will the UK’s global influence change over the next decade?
This is worrying. If we lose Scotland and become a third lane member of Europe our influence will be diminished. Right now we punch above our weight and enjoy a seat at most top tables. If we aren’t at the top table, then somebody else will be.
Which companies or sectors would you back for the next decade?
Naturally technology. IT will continue to grow until we have automated and optimised everything we reasonably can.
And there is plenty more room to go – more than enough to see me out!
What lessons have you learnt from your career?
Do as the orang-utan: don’t let go of one branch until you are holding tight onto the next.
Many years ago I was running an investment company and we’d invested all of our capital as I was confident we were about to raise a second fund.
As it happens we failed to raise the second fund and we found ourselves in mid-air with no support. Recovering from a zero cash position taught me the wisdom of the orang-utan the hard way!
What book is on your bedside table?
I have a large pile of books by my bedside table. The one I’ve just finished is The 100 Year Old Man Who Climbed Out the Window and Disappeared by Jonas Jonasson. It’s a clever book but a bit on the long side.
The one I’m reading now is Colin Thubron’s In Siberia. In view of what is going on in Crimea at the moment it offers a timely insight into a very different and much more ‘accepting’ culture than our own.