Sir Peter Gershon: “Beware the shadow you cast in a senior role.”

Chair of the board

6 min read

Sir Peter Gershon is a trustee of the Sutton Trust and of the Education Endowment Foundation. He was chair of National Grid, Tate & Lyle, and the Aircraft Carrier Alliance. Sir Peter also led the Gershon Review — an influential report on public sector efficiency commissioned by the UK government.

What qualities do you look for in directors — especially post pandemic?

I’m very keen on having as diverse a board as possible, but there’s one area where I want homogeneity across all board members — and that’s how they react when times get tough.

When looking for new NEDs, I only hire those I can tell with reasonable confidence won’t run for the hills at the first sound of a gunshot. Because panic is the worst possible thing in a boardroom when you’re going through a difficult period, and you can’t have members of the team going AWOL right when you need them most.

“There’s one area where I want homogeneity across all board members — and that’s how they react when times get tough.”

I usually just ask, “What’s the worst situation you’ve ever had to deal with?”, and their answer is often illuminating. Some will have gone through incredibly difficult circumstances, and you’ll learn a lot just by listening to them. Others get you thinking, “If that’s the worst thing you’ve faced in your career, either you haven’t learnt anything from the challenges you did encounter, or you’ve been suspiciously lucky!” They may very well be lucky, but that also means they’re untested — and why would I let my board take that risk?

What should all chairs do in their first 100 days?

You have to form a view as to whether the incumbent CEO is part of the solution or part of the problem. It’s either one or the other — and, as the chair, you’re not allowed to sit on the fence.

“You have to form a view as to whether the incumbent CEO is part of the solution or part of the problem. As the chair, you’re not allowed to sit on the fence.”

CEOs are horses for courses. Someone can be great for a certain situation, but when the business environment changes, that same person may not be right anymore.

It can be an especially difficult conversation to have when you’re joining a business that’s doing okay — as opposed to one in a crisis. But if the organisation is merely cruising along, firing on four of its six cylinders when the chief executive has been in post for a reasonable period, then it’s probably time for a change.

That doesn’t mean you should take action immediately. But you have to reach a conclusion in those first months and come to terms with the consequences.

From energy to aircraft carriers, you’ve chaired organisations the public feels strongly about. How should boards handle increasingly vocal opinions, especially on social media?

If it’s bad stuff on social media, you need to act very fast — which runs counter to how most large organisations function. If you don’t come out with a rebuttal or give more information very quickly, it’s not just that you won’t be able to control the narrative: you won’t even be heard.

Let me give you a real-life example of how things can go wrong. In August 2019, there was a serious power outage in the UK — which happened late on a Friday afternoon, just as commuters were heading to the station to travel home for the weekend. Two electricity generators had been hit by lightning, leading them to drop off the grid. Fortunately, the grid is designed to handle events like these, and it recovered to its normal operating parameters within 30 seconds.

Where things started going wrong was outside the grid: new electric trains had recently been deployed on some routes out of King’s Cross, the few seconds of fluctuation tripped their onboard computers, and they shut off. And because they couldn’t then be rebooted from the cab, train companies had to send technicians to each train — turning a 30-second grid hiccup into a several-hour-long crisis.

So, here we are, caught between two external events over which we have no control — lightning and trains that won’t restart — while everyone on social media blames National Grid. And, in hindsight, we should have been far more proactive to explain what was happening, even when we didn’t yet have all the details.

“As soon as you explain, most customers understand.”

Similar things happen when severe storms take the power lines out in the North East of the US where National Grid owns and operates a number of electricity distribution networks. Customers see National Grid trucks going past their houses and ask on social media, “What are you doing driving by instead of fixing the electricity on my street?” But as soon as you explain that you first need to restore hospitals and old people’s homes as a matter of priority and provide them with an estimated time of restoration, most customers understand and accept the situation.

If you could add an item to every board’s agenda in 2021 what would it be?

Net zero. Global warming is only going to get worse.

Was there a moment in your life that defines you?

Marrying my wife would be the main event! But career-wise, it was when I changed company for the first time.

My first employer was ICL, a computer firm, where I started as a graduate trainee in 1969. STC, a telecom firm, took us over in the 80s. A few years later, much of the original business of STC got into serious difficulty, and a lot of their top management were removed from their positions. The new CEO asked ICL to export some of its senior middle managers to run key STC businesses — and that’s how I ended up running STC’s land telecommunications equipment business.

I had been at ICL for 17 years. I didn’t know any other company, and I had serious self-doubt about how I was going to cope with a different business, in an industry in which I had no background.

That experience taught me that key business lessons and skills are transferrable. And that in turn helped define the rest of my career, including a big move from the private sector to the public sector.

What advice would you give yourself if you were starting out again?

“If you’re facing a difficult problem, consulting other people before deciding what to do isn’t an admission of weakness.” Seeking the counsel and input of others is a sign of maturity and a helpful way to reach a wise decision.

Also, “Beware the shadow you cast in a senior role.” As the chief executive or the chair, you can do something perfectly mundane, discover later that it caused shockwaves, and wonder, “How the hell did that happen?” Whether you like it or not, your words and actions have a lot of weight, even non-verbal signals have impact far beyond what you could have thought — and you need to be mindful of this

“As the chief executive or the chair, you can do something perfectly mundane, discover later that it caused shockwaves, and wonder, ‘How the hell did that happen?’”

During my career, I’ve worked in two companies where the top job came with the key to a private bathroom. Both times I made it clear on Day 1 that I intended to use the same facilities as everyone else — and this sent a very visible signal about my attitude to outdated hierarchical structures.

At one of these organisations, there was also a long tradition that everyone addressed the chair as “Chairman”, in and out of the boardroom. By making it known that I preferred to be called “Peter”, I hope I made it clear that a company with an exciting future doesn’t perpetuate customs from another age.

What book is on your bedside table?

How Churchill Waged War: The Most Challenging Decisions of the Second World War, by Allen George Packwood. I’m looking forward to seeing what I can learn, to apply to the boardroom!

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