Martha Lane Fox, Baroness Lane-Fox of Soho, is president at the British Chambers of Commerce, chancellor of The Open University, a cross-bench peer in the House of Lords, and a non-executive at Chanel. She was previously a director at Twitter and Marks & Spencer and is the co-founder of lastminute.com. Here, she reflects on the part of the role many chairs fail to grasp and what business leaders should do in the face of the headwinds facing the UK today.
As a board member, do you have any golden rules?
I have three.
Like a girl scout, my first rule is to always be prepared. Sometimes I look around the boardroom and wonder if fellow directors have actually read the board papers; often, I doubt they have. To me, that is absolutely unacceptable. It means that when a crisis hits you might as well not be there at all.
Second, you should support management right until the moment you shouldn’t. As the board, you select the CEO who then builds the management team; therefore, if you have an issue with the way management is running the business you should take it up directly with the CEO and, if the situation warrants it, find a new one. What you absolutely shouldn’t do is take out any anger, angst, or frustration by being difficult or seeing your role as a sort of spectre looming over management.
And third, you need to build up your levers of influence within the organisation to have the greatest impact — because you don’t run the company and can only guide, support, and carry out your fiduciary duties. The best way to do this is by spending time with the board outside of meetings, engaging with different employees across the business, and visiting sites — such as shops for a retailer.
What would you change to make boards more effective?
You need a board that operates in different ways if you’re a start-up looking to scale than if you’re a mature and well-established company. So, for starters, I’d have boards more regularly assess whether they’re appropriate for the stage their organisation is at.
Key to this is finding the right chair — one with a different skillset compared to the rest of the non-executives, who’ll be able to manage directors and keep discussions focused and strategic. Just as the CEO runs the company, so is the chair running the board; yet many chairs haven’t grasped that their job is to work harder than anyone else on the board, guiding papers and surfacing tensions and issues so they can be quickly solved. For example, at WeTransfer I regularly hold one-to-one conversations with board members to work through anything that’s worrying them.
“Just as the CEO runs the company, so is the chair running the board.”
Then, once an appropriate board and chair are in place, I’d have them think about the conversations they should be having. On any board, you’ve got fantastically talented people who are doing amazing things outside that boardroom and it’s a crying shame that many don’t share this without a prompt, so I’ve started to begin meetings by asking the board for reflections on things they’ve seen outside of the company to try and bring some of that in.
What’s keeping business leaders awake at night right now?
Although I can recall moments of extreme uncertainty over the course of my career, from the 2008 global financial crisis to the aftermath of the Brexit vote in 2016, it feels like today’s macroeconomic climate is generating more anxiety about the next decade than I’ve seen before. Geopolitical tensions, the horror of recent events, and several major elections coming up over the next year or so also contribute to this uncertainty, especially concerning the future of regulatory frameworks.
The transition to net zero and sustainability is obviously front of mind and will be a unique journey for every company, depending on their sector, size, and consequent reporting obligations. On this note, I don’t think people in the UK have truly appreciated just how much work the new European Sustainability Reporting Standards will mean for UK companies who have any kind of presence in Europe.
Secondly, whilst I don’t like the expression, I’ve been hearing a lot about the “war on talent”. From senior leaders to the shopfloor, the difficulty of recruiting and retaining the right people does constitute something of a crisis in the UK. Although not as acute as in the US, it’s still a major challenge without a short-term solution.
A point of note here is that it’s all too easy to start worrying about everything that’s going on. However, that’s largely pointless. You should instead direct your energies towards the things you can control — your product, your people, and your business. Don’t be scared to alter your plans if it’s the right thing to do. That’s not always easy, especially in a public company, but making those bold strategic decisions can be the difference between success and failure.
“Direct your energies towards the things you can control — your product, your people, and your business.”
Unfortunately, right now it’s about operating on the tightest cost base you possibly can and doing that boldly, sooner. What kills a company’s culture is a gradual shaving and shaving. I expect the cost base to bounce again over the next couple of years alongside even more uncertainty. Whilst we saw substantial restructuring in the tech sector last year, sadly I think there is more of that to come across other sectors.
What can we do to improve the information boards receive?
As a rule: less is more. Information overload is one way of befuddling the board. And, in larger companies, often a paper goes through too many layers and ends up saying something other than what the author wanted to convey — which means that the paper is no longer a representation of fact but a political document that can’t be taken at face value. To prevent this, I recommend speaking with report writers so you can have confidence that the paper you read still contains the message they felt you needed to hear.
“As a rule: less is more. Information overload is one way of befuddling the board.”
Beyond the amount of board information, the board’s meeting cadence also contributes to how happy the board is with said information. I remember coming onto a board where the CEO was spending more time managing the board than managing the business. I pushed for the number of meetings to be significantly reduced from monthly to quarterly; however, I soon realised board members were starting to feel out of the loop. That underlined for me the importance of striking a balance — and for that company, six meetings a year was about right.
How do you best go about embedding discipline for rigorous critical thinking and focus across an organisation?
I’ve rarely seen this done well, because it’s exceptionally hard to get it right. To instil that kind of discipline, you have to improve the flow of information and empower people to make decisions quickly. Ultimately, it’s down to the senior management team to design the right structure and environment to embed this across the company.
I was quite close to Google when they first started, and I would say they came nearest to it. Their wider purpose was to organise the world’s information, but they adopted a rigorous product-led approach to this which gave individual teams power to get on with their objectives. They were brutally focused on building the best search engine.