QCA Building Better Boards Forum: Session 2 – Board Evolution
As part of our Building Better Boards theme for 2019, we held our Annual Forum on Tuesday 11 June 2019 at Haberdashers’ Hall in London, with over 70 guests from across the small and mid-size quoted company community in attendance.
This year’s forum builds upon our work on corporate governance and is aimed at helping smaller quoted companies build effective boards and develop good practices and behaviours that will drive improved performance and help stimulate their growth.
Please see below highlights from our second panel session, featuring:
- Tracy Brady, Managing Director, Company Matters, Link Asset Services
- Annette Nabavi, Non-Executive Director, Maintel Holdings PLC
- Hugh Cawley, Chief Executive Officer, Real Good Food PLC
- Chris Hodge, Policy Advisor, ICSA: The Governance Institute
Tracy Brady, Managing Director at Company Matters, Link Asset Services, chaired the second panel session at the QCA Building Better Boards Forum, which examined the evolution of the board in a company’s lifecycle in order to build trust between small and mid-size quoted companies and their shareholders.
Annette Nabavi, Non-Executive Director of Maintel Holdings PLC, spoke about the role of the Remuneration Committee Chair within the board. Annette stated that a one size fits all approach is not appropriate when it comes to setting remuneration policy. She outlined that the key areas of a Remuneration Committee Chairs focus all had the potential to be contentious issues, such as the remuneration packages for the Chief Executive, the board, as well as the overall remuneration policy for the wider company. She also mentioned other difficulties that Remuneration Committee Chairs often encounter, such as the difficulties that arise as a result of Long-Term Incentive Plans and the question over whether bonuses should be paid if the company is not making profit.
Hugh Cawley, Chief Executive Officer of Real Good Food PLC, gave an overview of what to expect from a board undergoing a transition. Hugh noted that the key first step in a board turnaround is to establish what it is that is need to be put right. In reflecting on Real Good Food PLCs historic poor corporate governance practices, he explained that this not only sanctions very high fines, but also leads to poor performance.
Chris Hodge, Policy Advisor at ICSA: The Governance Institute, spoke about the role that having an effective board evaluation can play in improving performance and initiating better practice. Chris outlined some of the aspects where evaluation should take place, such as the board’s composition, dynamics and support. He stressed the importance of not viewing board evaluations as a compliance exercise due to the limited value it adds, emphasising that it is fundamentally important to ask questions and make challenges.
On external board evaluations, Chris highlighted two reasons why it is beneficial for a company to consider external evaluations, underlining that they are there to assist with the evaluation rather than lead on it. The two points were:
· Peer review – it is useful to receive information on how or what other companies do to make adjustments; and
· Board dynamics – the use of anonymised issue raising helps bring issues to the fore that may not otherwise be addressed.
Finally, Chris explained that ICSA had recently published a consultation on the effectiveness of independent board evaluation in the UK listed sector. The consultation will determine whether there is need for further change, and specifically, whether there is the need for a code of practice.
For more from the QCA Building Better Boards Forum 2019, see also:
- Highlights from keynote speaker, Andrew Kakabadse of Henley Business School
- Highlights from the first panel session on creating the right board