SMF Blog Spot

The world of the NED has been moving at a pace, the traditional view of a NED; ex-top executive, one or two board positions after retiring and aged in 'his' 60s, is still with us, but there is a marked trend towards, younger professionals, who are making a deliberate choice to abandon corporate life and pursue an NED portfolio and who have reached senior executive positions relatively early in their careers and want a change of lifestyle.

This trend has been articulated in the recently published IDDAS NEDs Perspective Report, which is the third in the IDDAS Board Dynamics series.  These Reports provide a unique insight into the Board world, with the previous two Reports giving the Chairman's Perspective and a Females FTSE 100 Perspective on Boards.

This powerful triangulation of Reports provides a real sense of how the Board works and what it is like to be on a Board; 'hearing' directly from NEDs, Chairman and FTSE 100 female Directors the reality of the Boardroom.  The most recent NED Perspective Report has given a number of insights and views, for example.

• The majority of NEDs are reluctant to have compulsory quotas introduced to increase the numbers of women on boards, but recognise the need for change
• A third think the level of remuneration for NEDs is too low given the increased workload and greater risk to corporate reputations now involved with the role.  However, most acknowledged they were well rewarded and that too much focus on financial reward could compromise independence
• NEDs see challenge in the boardroom as vital to their position, however they agree this should come with an equal measure of support - a balance they sometimes find difficult
• The lifestyle and practical changes between executive and NED roles are vast. As well as stepping back and accepting less control, NEDs commented on the lack of administrative support they were used to in their corporate careers
• NEDs have mixed views on whether those from outside the corporate world such as media, HR or academics should be considered for NED roles
• Many said that the board should not be a team, rather that they should learn to understand each other and work effectively, which should be done outside the boardroom

The full report consists of a wonderful array of quotes directly from the NEDs and we hear the 'real voices' of their motivation, frustration and excitement.  In particular, I was stuck by the sense of the 'Board' not being viewed as a team, but as a collection of individuals who meet in a common space, the inference being that being a 'Team' takes away objectivity and is too cosy.  This provided a fascinating insight which got me thinking of how we define this Boardroom space.  How can we start to provide the 'Board' with the sense of their own worth as a 'Team', based on the definition of a high performing team, as needing, a common vision, values and strategy; constructive, creative, challenge and debate, which surely is a prime function and description of an effective Board?

Potentially, this misunderstanding of what a team is, could well be at the core of how we develop effective challenge and behavioural frameworks for the 'Board Team' to become most effectively.  We may need to re-calibrate this space in a different way from traditional 'team working' and be more cognisant of the different perspectives that the constituent cohorts bring to the Board. Certainly the NEDs are coming to this 'team space' with a clear and increasingly demanding 'governance' perspective and a keen eye on their duties and responsibilities as a NED, which are increasingly in the spotlight.

The Executive Team, additionally brings a set of perspectives and energies which are closely linked to their central individual values and 'status', to which any 'threat' is likely to elicit a strong reaction.  One of the key developments emerging from neuroscience research is the impact that threats and anxiety can have on our power for rational deliberation and perspective.  As the brain is threatened it becomes overwhelmed and reverts to a short term protective mode, with a shortening of horizons and acute awareness of the immediate, at the expense of the longer term.

The Chairman's role is to 'orchestrate' this space and develop a coherent and robust atmosphere of Trust, Challenge, Vision and Coherence, which is quite a balancing act.   There are many artful Chairman who able to 'pull' this off, but one of the aspects of our Chairman's Research was how little Development and Support Chairman had received to achieve this level, most having got there through a process of previous experience, trial and error.

Some of the aspects of this balancing act have been identified by the Financial Reporting Council (FRC) in their 'Guidance on Board Effectiveness', which identifies the need for appropriate decision making frameworks and the creation of an atmosphere of effective challenge towards strategy and the risk model of the organisation.  The refining of this 'Board Team' space is overdue, the challenge is for Boards to more clearly understand their own interpersonal dynamics and create an open and recognised decision making framework which stands the test of tough times.  The FRC guidance describes the dangers of 'group think', and a casual and untested decision making process which can be overrun by events.

Additionally, the IDDAS Chairman's Report and the FTSE 100 Female Directors Report, along with other reports in this area have identified the 'female' approach to challenge and decision making, which is less directly confrontational, more systematic and less ego driven, as a positive influence on Board performance.

It is likely, that as we drive toward the achievement of the Lord Davies Report targets of 25% females on FSTE 100 Boards by 2015, there will be an updraft of females onto Public quoted Boards and also onto the organisation's Executive Committee, which the Davies Report rightly identifies as the feedstock for Board Directors of the future.

So, it is my hope, that as Boards review their performance and fitness for purpose for the future that we will see both the desire for; and increased capability, to deliver an open and interactive 'Team Space' environment which leads progressively to enhanced Board Effectiveness.

IDDAS

IDDAS is a leading boardroom consultancy firm, specialising in individual director and boardroom effectiveness.  Its work covers board assessment, experience-based coaching and mentoring, leadership facilitation and development, individual assessment and corporate governance services.  IDDAS also assists directors and senior executives with their business and personal career transitions.

IDDAS services are designed for chairs, CEOs, main board directors, subsidiary/divisional and functional leaders of FTSE, international and private companies, financial institutions, public, not-for-profit and charitable organisations, and for partners in professional services firms.

The IDDAS offering covers:

• Boardroom effectiveness and governance
• Board and leadership facilitation
• Executive coaching
• Business mentoring
• Executive assessment
• Career mentoring

The 3,000 redundancies planned by BAE come as a bitter blow to the firm's employees and to perhaps, the 6,000 subcontractors who supply the firm.  But what does it say about manufacturing in general in the UK?  As someone who trained as an Engineer but is now a Partner at a chartered accountancy firm I believe that unless some real action is taken to fundamentally shift the balance of our economy, these redundancies and more like them will change nothing.  Whether we are talking about BAE or Bombardier (1,400 jobs lost at the train manufacturer in July 2011) or numerous other examples down the years, what seems obvious is that as a nation we continue to lie back whilst our engineering and manufacturing skill-base is inexorably eroded.

For more than 30 years manufacturing has been written off as a mainstay of the economy.  We've blamed foreign competition, trade unionism, poor management and a lack of investment for the decline in our manufacturing fortunes but the truth is we haven't as a nation stepped up to the plate.  If the same care had been taken to protect and nurture manufacturing as has been put into promoting the UK as a major global financial centre we would have a strong and vibrant manufacturing base keeping people employed, paying valuable taxes and selling the products we are so good at inventing and developing for other nations.  Imagine the engineering equivalent of the redeveloped square mile and Canary Wharf and you start to understand the analogy. I'm not for a minutes suggesting that we abandon our banking and services industry, but what I am saying is that we should recognise that the balance has swung too far away from creating tangible wealth.  We've come to depend far too much on the intangible wealth associated with city.

In the words of George Osborne, wrapping up his last budget speech;

'We are only going to raise the living standards of families if we have an economy that can compete in the modern age. So this is our plan for growth.

We want the words: 'Made in Britain' 'Created in Britain' 'Designed in Britain' 'Invented in Britain' To drive our nation forward. A Britain carried aloft by the march of the makers. That is how we will create jobs and support families. We have put fuel into the tank of the British economy.'

Sadly the present government, despite its own words, has still not woken up to the fact that manufacturing should be the linchpin of the economy rather than the poor relation of the banking and the business service sector.  To put manufacturing back into centre stage will take billions in investment and a long term structural shift, but it has to be the future.  Now is the time for the government to stop talking and to start to take action.

Chris Coopey is a Partner with Carpenter Box LLP, Chartered Accountants and Chartered Tax Advisers.  He originally trained with a subsidiary of Simon Engineering in Gloucester, qualifying as a design draftsman.  In 1979 he moved to the telecommunications industry where he worked for 10 years.  Chris subsequently went to Exeter University before qualifying as a solicitor.  He joined Carpenter Box as Practice Director in 2005.

Our vision as an organisation is to promote and demonstrate the value of a combined business and engineering education to improve the performance of the UK economy.  I believe that SMF has taken another important step forward in the last twelve months in trying to make a real difference in this goal.

We have been outward looking, distributing our publication 'Re-engineering the board to manage risk' to a variety of HR directors in blue chip companies, challenging perceptions of how skill profiles that include an understanding of how things are designed, made, and successfully delivered add value to board room interactions.

We recently held an HR Directors roundtable to discuss best practice on recruiting directors for the management of risk and find ways to shape opinion in this key area.

The UK is still the 6^th largest manufacturer in the world and the sector contributes enormous value to the UK economy. Our Secretary James Raby and I attended the Future of UK Manufacturing Summit held at 1 Birdcage Walk in March What struck me was just how many of the critical success factors of manufacturing today lie in the arena of good commercial management rather than classical engineering areas. In other words, the importance of brand development, understanding the customer decision process, strategic development, good financial management, and sales and marketing. This topic is in the heartland of the SMF and I hope we will develop this theme over the next year.

Internally, I'm pleased to report that 70% of all SMFs participated in a variety of events this year.

The SMF Executive Director Mentoring Programme has progressed, all 6 executive mentors from FTSE350 companies remain committed to the programme, and we are grateful for their support. We are currently in the process of matching another group of SMFs with mentors, this time engaged in entrepreneurial and finance career paths with the much valued help of Peter Lever of Heidrick and Struggles.

We have also launched a new website and social networking platform to further promote our aims and help the exchange of ideas and information.

I would like all our SMFs as individuals to consider how they can contribute to furthering the improvement of the UK economy by participating in some of our outward reaching programmes such as our mentoring scheme to young engineers and our start-up business review panels.

And , I would just like to say a brief word of thanks to all of the people who made this year's achievements happen - Our Treasurer Alpesh Amin who has led the work into incorporation and becoming a self sustaining group, our Secretary James Raby - who has led the skills and HR pack initiative, Julian Fagandini - who continues to lead the Executive Board Mentoring Programme, John Moore - who took the initiative to organise a networking event in the Southwest region, and our other Committee members who have worked over the last 12 months with amazing energy, resourcefulness and creativity - Jo Hallas, Julian Morley, Ernie Poku and Paul Dolan.  Also, my sincere thanks to all the Sainsbury Management Fellows who have participated in events, interview panels and who have written articles or spoken to the media on our behalf, and to our Comms Director, Cathy Breeze, who works tirelessly, often in the background and skilfully enables everything else, corralling us from our day jobs.

My thanks also to the Gatsby Charitable Foundation and our friends from the Royal Academy of Engineering, EngineeringUK, and other institutions for their continued support and encouragement.  Finally, I would like to thank our Patron, Lord Sainsbury, without whom none of this would be possible.

I am delighted to introduce Lord Sainsbury, who has graciously agreed to say a few words.

LORD SAINSBURY ADDRESSES SMFs AT ANNUAL DINNER 2011

Over the last couple of years I have been writing a book about the political economy of economic growth.  This has involved me in looking at why at particular times countries have caught up with those at the technological frontier, and why other countries have forged ahead or fallen behind.

What emerges from all these different case studies is the overwhelming importance of the generation and diffusion of new technology. I think I have always known and believed this, but having seen the extent to which it explains the economic growth of different countries I have been thinking once again about how we can encourage young people to see engineering as an exciting and challenging career, and one that makes the world a better place.

As you know, this was one of my goals which I had in mind when I set up the Sainsbury Management Fellows Scheme.  It is also a goal that I have continued to pursue in a number of different ways and I thought that this evening I would say a word about some of the schemes I have initiated and supported, what has been achieved, and how you can help take this agenda forward.

There are three successful schemes that I would like to mention.  The first is the STEM Ambassador's Scheme which is a national scheme which I initiated when I was in Government and which involves people from STEM backgrounds going into schools to act as inspiring role models for young people.  This can take the form of contributing to regular lessons or participating in extra-curricular activities.  STEM ambassadors can open the door to a whole new world for young people, helping them to see STEM subjects and careers with a fresh perspective and engaging their interest and imagination in new ways.  The Scheme registers each Ambassador and also gives them training.  The Scheme was established in 2002.  By 2008 the number of Ambassadors had reached 18,000, and the number now stands at over 28,000 individuals drawn from over 3,000 employers.

The second Scheme I would like to mention is the Scheme for after-school STEM Clubs which allow children to explore and discover STEM subjects in a stimulating learning environment away from the constraints of the prescribed curriculum.  The aim is to complement the curriculum and they are designed so that they do not involve writing, tests or examinations. In this way they can motivate and build confidence in young people who struggle with STEM subjects and, at the same time, provide an extra outlet for children who already show aptitude and are interested in furthering their learning.

The programme was established in 2006 with 250 schools piloting the Scheme and has proved very successful.  The number of schools participating doubled to 500 in 2008.  By 2010 the number of schools in the STEM clubs network had reached 1,500 and by March 2011 there were over 2,000 state schools signed up, representing around 50% of all schools in the U.K.

The third initiative I want to mention is the Big Bang Fair.  This was launched in 2009 to bring together in a single fair the numerous science and engineering competitions aimed at young people. The first event in 2009 attracted around 8,000 people and by 2011 just three years later the number had risen to 29,000 people.  The expectation is that these numbers will continue to grow as word spreads throughout the schools network and more and more industrial partners come on board.

I mention these schemes because I think they demonstrate very clearly that one can enormously improve the effectiveness of all the schemes to encourage young people to see engineering as an exciting, rewarding career, by getting people to work together.

I also think that we have now turned the corner on the number of young people doing science and technology subjects at GCSE and A level, and that if we continue to enthusiastically push forward this agenda and co-ordinate all our efforts, we can significantly change young people's view of careers in science and technology.

Having mentioned these Schemes by way of background I would like to say how much I value the work of the Sainsbury Management Fellows in taking this agenda forward.  There is no better way to encourage young people to take up careers in science and technology than seeing young scientists and engineers doing exciting and socially valuable jobs which are also well rewarded.  So I am delighted that of the 275 Sainsbury Management Fellows who have graduated from business schools and the 10 who are studying for their degrees, 60 Fellows have started up or run their own businesses, spanning a wide range of industries.  100 Fellows are working in senior positions in FTSE Companies, and Sainsbury Management Fellows have acted as mentors to over 450 RAEng leadership award students over the past 15 years.  I am also delighted to see that so many Sainsbury Management Fellows are now leading green companies.

Chris Shelley - Green Power Corporation, Tom Delay - The Carbon Trust, Bill Sneyd - Homesun, Gordon Wylie - Free Green Electricity Corporation, to name but a few. And one of our newest Sainsbury Management Fellows graduates, Phil Westcott, has just been hired by IBM to work on the Smart Grid.

I am delighted to announce that a Sainsbury Management Fellow will be invited to take up the role of visiting Professor in Sustainable Wealth Creation at Nottingham University Business School.  This has been arranged by the RAEng and will be a fantastic opportunity to shape the thinking of the next generation and give them the incentive to take up careers in the extremely important area of sustainability.

The Visiting Professor will work with the University's International Centre for Corporate Social Responsibility and the Institute for Enterprise and Innovation to contribute to their research, teaching and business engagement work. This will involve working with undergraduates, post-graduates and research students as well as MBA students.  For example, the Visiting Professor will be expected to lecture to MSc entrepreneurship students as part of their innovation and technology transfer module.

I think this is a very exciting opportunity and could make a very useful contribution to the agenda of encouraging young people to see engineering as an exciting and challenging career and one which makes the world a better place.

Finally, I pleased that the Society is taking steps to evolve to a company limited by guarantee and registered charity and that a key result of the recent members' survey is that 70% of the Sainsbury Management Fellows interviewed said that they believed the Sainsbury Management Fellows could be both an alumni and an influencing organization.  That is the direction I hope the Sainsbury Management Fellows will continue to pursue in the coming years.

Now there is a critical mass of Sainsbury Management Fellows you have the ability to make a huge impact on the way that young people see engineers in business and I hope you will pursue this agenda with all the energy and enthusiasm that you have brought to your activities in the past.

Each time I look through the profile book it impresses me how unique a group the Fellows are. Although we work in a wide variety of industries and roles, we all share a common perspective and experience. We have also all participated in the vision of Lord Sainsbury.

The Society has in essence two broad aims. Firstly to add value to the UK and international economy by supporting the aims and vision that Lord Sainsbury expressed in setting up and supporting the scheme and associated bursaries that we have all benefited from. Secondly, to add value to each individual Fellow by organising and encouraging interaction, and otherwise supporting our careers.

We are entering a period where the future form and role of the society may well be decided. There are now almost 300 Fellows, representing a considerable network of talent covering all major sectors and functions, and many countries. The debate on what makes us unique, what aims we should have and how we can realise them is coming to a head.

Recently, a strategic review was initiated to better understand what role the Society should or could fulfil. To further understand the Fellows' profiles and their current views on the scheme we have asked Hall Associates to undertake a telephone review. You will therefore be contacted over the next few weeks and asked a range of questions. At one end of the spectrum we can be a mere alumni association, at the other, we can seek to positively influence views and attitudes across commerce. We are interested in your views on the Society's future role and how you would like to be involved.

HR Pack

You will have found enclosed our publication Re-engineering the Board to Manage Risk and Maximise Growth, or "HR Pack", targeted at key HR decision makers. This pack was designed by our Communications Group to challenge the view that accountancy and legal training are the best qualifications for effective boardroom directors, and to highlight the strengths of the engineering mindset. Most of our outward communications to date have been via Public Relations. The HR Pack is a deliberate break from this approach and provides a more direct channel. If the evaluation of this new approach is positive then we intend to look at additional opportunities for new publications and forums for challenging views and arguing for wider adoption of our values. Please give us your feedback on this pack.

If you would like extra copies to circulate to your HR Directors please let Cathy know.

Website & Improved Engagement

We will shortly be launching a new website and interaction platform. Many of you will already be members of the SMF group on LinkedIn but this new website has vastly increased functionality and a new social engine to allow for private communications between Fellows.

As Fellows are geographically dispersed, the website is also intended to provide a material forum for useful interaction on a variety of initiatives irrespective of geographic location.

How we support each other and add value as a community will no doubt dictate the future success of the Society. We hope that the website will enable a higher degree of interaction and engagement by delivering value to every Fellow that uses it.

Funding

As you know, the SMF bursaries are funded by Lord Sainsbury via his Gatsby Charitable Foundation. However, the Society itself has been funded to date almost entirely by Lord Sainsbury's private funds. Whilst we have been informed that the future of the scheme continues to be assured, and all recent feedback on our performance has been most positive, we have also been asked to take a hard look at whether there is a point at which the scheme becomes self funding.

We are currently reviewing whether to incorporate the Society and establish a registered charity to further pursue this question. A key benefit of this incorporation would be a tax efficient vehicle for those Fellows who have expressed an interest in investing back in to the scheme.

We also collect annual subscriptions from the Fellows. These subscriptions go directly to supporting the Society's aims. They are not a 'social fee' but, rather, they underline the identity and activities of the Society and point to the responsibilities of the individual recipient of the award. We continue to ask for your support in collecting these fees.

Mentoring & Other Activities

An outstanding success of last year was the launch of the mentoring scheme. Fellows have been partnered with mentors at the very highest levels of UK PLC. We intend to look not only at how we can extend the scheme in size, but also how to access new key sectors of Fellow involvement such as Finance and Entrepreneurship.

We also launched the successful Energy Roundtable. This is a forum - currently physical but soon also to be online too - to exchange latest ideas between those with a role or interest in the Energy arena. We would like to have additional roundtables in areas of key importance to the economy such as Finance and Manufacturing. Please let Cathy know if you would like to be involved in this.

Other activities where our involvement continues include supporting the next generation through the RAEng's BEST Programme and the Engineering Leadership Award scheme. If you feel you now have the time and would like to become further involved please do not hesitate to contact Cathy or myself.

There is no easy way to measure the sphere of influence that the Fellows have. However, by rising to the challenges we are set, and increasing our ability to collaborate, we can exert a positive influence of a disproportionate magnitude to our size.

Lastly, I would like to warmly thank outgoing President Ernie Poku for all of his hard work, initiatives, and achievements during his term of office.