Patrick O’Sullivan is Chairman of Old Mutual and Deputy Governor of the Bank of Ireland. He is also Chairman of the Shareholder Executive, the body which manages the government’s shareholder relationships, and he was previously Vice Chairman of Zurich Financial Services.
What are the ingredients for an effective board?
There’s no silver bullet for effective boards.
That said, there are some fundamentals that will stand a board in good stead. All boards need high quality, relevant briefing papers to inform their discussions. And there has to be a healthy relationship between the chairman and CEO. I stand by the Chinese proverb “the fish rots from the head first”. The relationship between the CEO and chairman should be ‘constructively critical’ — mostly supportive, but not supine; there needs to be a certain amount of spark and challenge, as well as mutual respect, for the relationship to work.
What can a chairman do to forge the right relationship with their CEO?
I’m a firm believer in regular meetings between the chairman and the CEO, and between the chairman and the CEO’s direct reports. Ideally, the chairman should reach further into the organisation — not to second-guess the CEO, but to deepen their understanding of what the CEO is dealing with. In my experience, this doesn’t make me any less independent; it just means I’m better able to support my chief executive and I’m engaged with the situation management’s facing.
Has the way boards operate changed much in the last few years?
Boards used to be fairly cosy, but that’s certainly not the case today. When it comes to the critical decisions, every member of the board should have their say — and these days chairmen are much better at drawing that out.
How important do you consider information to be in the boardroom?
You can’t live without it. Now that we receive our board reports through iPads, I get the papers as and when they’re ready, rather than getting them couriered at the eleventh hour before a board meeting. And I insist on summary sheets which state, on one page, the aim, context and key points of the paper. This is particularly important for financial service firms where there’s an abundance of information coming our way.
What single government policy would you change or introduce to support British enterprise?
The government is in an unenviable position given the constraints of the country’s economic position. But I think the launch of the Business Bank is a great initiative. If I had a magic wand I’d want to go further than this and introduce a banking institution modelled on Germany’s KfW — a government-owned commercial development bank that provides a vital source of financing to Germany’s Mittelstand. The EU objects to the government subsidy on competition grounds — but as one of the sources of the Mittelstand’s success, it’s hard not to find it attractive.
What is the smartest business decision you’ve ever made?
Taking the decision when I was at Zurich Financial Services to increase our stake in New China Life Insurance from 15% to 25%. As a foreign investor, we weren’t able to own a controlling stake and there was a view at the time that we should exit. But we chose a different path and we gained influence — not from a majority holding, but by building a good relationship with our Chinese partners. It ended up being extraordinarily successful for Zurich.
What book is on your bedside table?
Nate Silver’s The Signal and the Noise.
What is your golden rule?
At this stage of my career I’d say it’s to have fun! I’ve always found it exciting to turn businesses around and motivate people to achieve beyond their perceptions of their own capabilities. I love what I do and that’s important.
And finally, if you could rip up the rule book…
I’d insist that only capable people with exceptional experience regulate our financial services. I’d also limit the time you can be on a board to 6 or 7 years; any longer than that and you inevitably risk losing your independence of mind.