Chris Perry is President of Broadridge Financial Solutions and a board member at the Financial Services Institute. Here, he explains the importance of transparency for a well-functioning board, highlights its benefits, and shares the hallmarks of a great board meeting.
What are the hallmarks of a great board meeting?
A great board meeting is one that doesn’t follow a script and is instead a rich conversation. In a meeting that’s basically scripted, everyone’s just acting, whereas one that’s defined by a great discussion means that people are really engaged, learning, helping, and governing the company. To support this, your meeting should have excellent pre-read material sent 5 days in advance, a formal and strictly followed agenda, and some flexibility to allow for a clear transfer of information and conversational Q&A.
Of course, it doesn’t matter how well you’ve planned your meeting if people don’t have time to read the papers or just don’t bother to. We’ve done a lot of work to get to a place where we circulate pre-reads a week beforehand. With this, I’ve found that our board members engage with these papers in a way that’s thoughtful so that, by the time the meeting comes around, they’re well prepared to engage in a conversation rather than just listen to someone reading out a PowerPoint.
You also need to make sure that the board members know what their role is. It’s critical that they realise they’re not signing up to be an operator, and if they think they are one you’ve got to break that dynamic. If you don’t, the boardroom can feel a lot like the principal’s office – it shouldn’t feel like that, it should be a place where people are supportive and everyone’s there to share experience, protect the company, and help solve problems. The best boards are nose in, hands out and everyone is clear on their accountabilities to serve shareholders.
“The best boards are nose in, hands out and everyone is clear on their accountabilities to serve shareholders.”
What can boards do to set themselves up for great discussions?
First and foremost, you need a foundation of true respect in order for any board to function well. Beyond this, you need a board that embraces diversity and inclusion – not necessarily from a purely ESG context, but in recognising that each board member brings diverse experience and perspective to its role in promoting transparency and honesty on the board. I’ve been doing some work on DEI and one of the things that struck me was around commitments for protected spaces, where people are allowed to speak without being judged or unnecessary pressure, to create an environment that is open and transparent. In this space, you embrace different perspectives as productive friction and evidence that multiple ideas are entering the conversation and that different perspectives are there; disagreement isn’t proof of a group at odds with itself but instead shows that people are actively listening and responding. That’s all applicable in the boardroom and, in my opinion, makes for a great boardroom where people can talk freely and serve shareholders.
This is so important because when you look at companies that have gone awry, oftentimes you will find it comes down to a real lack of transparency. This is not only corrosive to an organisation’s culture, but it makes everyone’s already difficult jobs even harder. A CEO should manage the board to promote transparency, reduce risk, and capitalise on opportunity – what they shouldn’t do is to try and manipulate or control the board. Tempting as that might sound, it makes a mockery of what the board is there for and makes it really difficult for the board to appropriately support the CEO.
“When you look at companies that have gone awry, oftentimes you will find it comes down to a real lack of transparency.”
Great boards know their role. In short, that role can be summed up as hiring, performance management, and, if absolutely necessary, firing the CEO. Succession planning and reviewing the CEO’s performance is a key part of the board’s job. After all, the board is not day-to-day, but from great material, 4/5 meetings per year, and various discussions they must mitigate, protect, and anticipate risk before it starts to affect the company.
What do you see as the key differences between US and UK boards?
The big difference is in the models for leadership, and there are three scenarios that you see most often. First, you’ve got one in which the CEO and chair is the same person; that’s something I’m vehemently opposed to as I think it can make CEO accountability murky on a fundamental level. This is very rare in the UK, and somewhat common in US public company governance. Everyone will be familiar with the adage that ultimate power corrupts absolutely and, unfortunately, it’s often true when that kind of power is concentrated in one person’s hands.
“Everyone will be familiar with the adage that ultimate power corrupts absolutely and, unfortunately, it’s often true when that kind of power is concentrated in one person’s hands.”
The second scenario is very plausible and is where you’ve got an executive chair, CEO, and a lead independent director. In these cases, the key is that the executive chair must have a clearly defined remit that’s validated and upheld by the board. Executive chairs are likely to be former operators themselves, so it’s crucial that guardrails are put in place so that the executive chair doesn’t revert to an operating role and become a kind of puppet master.
The final scenario that you’ll see is a separate CEO and chair, which is the norm in UK public companies, and in many US companies as well. This, in my mind, sets the stage for the purest dynamic as it creates and preserves a lot of independence in Board governance vis-à-vis executive management. Not only is this great for promoting transparency, but it also makes the distinction between the executive and board really clear and sets well-defined boundaries that leave you in no doubt of responsibilities.
What book is by your bedside table?
I’ve just finished Lessons in Chemistry by Bonnie Garmus, which was a great read. I usually read non-fiction books and have a soft spot for business books; I recently read Hit Refresh, the Satya Nadella book which talks about his time at Microsoft. I was fascinated by the way he came in and reignited real innovation helping the company that created the most prevalent operating system and email platform in the world back to growth after its second-generation leader fixated on EPS. From Lessons in Chemistry, to Hit Refresh, showing us that growth and innovation are infinite, while cost cutting is finite.
