During a recent edition of the Better Boards Podcast series, Sir John Parker joined Dr Sabine Dembkowski. The topic of discussion was “What Really Matters in the Boardroom in 2020 and Beyond?”
Sir John has earned a reputation for his tough approach at the helm of some major turnarounds at some of the biggest UK Corporations. Currently, he serves as Chairman of Pennon PLC and the engineering and construction group, Laing O'Rourke. He is also a non-executive director with Carnival PLC and the Carnival Corporation. He was also President of the Royal Academy of Engineering, Chairman of Anglo American, Chairman of National Grid and a non-executive director at Airbus. With over 25 years' experience as a CEO, including stints with Harland and Wolff and Babcock International, it was great to have Sir John contributing to the Better Boards Podcast series and taking the time to pass his distinct expertise on to the future board generations.
During the discussion, Sir John identified several key traits that are important for Boards and Leaders as they make their way through 2020 and beyond.
The first point Sir John mentioned was the importance of building the right culture at the board level. For Sir John, this was focused on the values he represented as a leader and the values the Board collectively decide to pursue. The three-values Sir John believed himself to be most crucial were:
Good Governance Practices
Strong Financial control
Discussing them further, he commented:
“I mean, the proper processes, the proper approval processes. It's just how we do things in a disciplined way so that everyone knows what they've got to do to achieve a result. And that installing that those characteristics, if you like, of the operating philosophy is very important.”
Sir John believes that the most crucial relationship to get right is the one between the Chairman and the CEO as this relationship acts as the vital bridge between the strategic role of the Board and the management responsibilities of the Executives. Without a proper alignment on the cultural values, he identified there would be friction between the Board leadership and Executive management and those key values would not be aligned throughout the whole company.
Speaking on what advice he would give to the next generation of chairpeople, Sir John pointed to clarity as key, regardless of the size of the business. Having a clear strategy crafted at the board level that can be communicated to the CEO and their team is crucial as this empowers the CEO to act with confidence.
Being authentic is key for the boardrooms moving forward, according to Sir John. He emphasised that people must be able to trust the leadership at the top as that helps inspire them to deliver on the strategy laid out by the Board.
He is looking back on his time at Anglo American, where he was parachuted in during a time of crisis. Sir John points out that board leadership needs to be able to act with courage in the face of unexpected problems, whether from Global turmoil like the 2008 Financial Crisis or the Covid-19 Pandemic. This will mean “knuckling down” and making the tough decisions that need to be made.
As a member of the Davis committee and chair for the Parker Review investigating Ethnic diversity at boards. Sir John is a firm believer in the necessity of diversity on boards. This comes not just in the forms of gender and ethnicity diversity but also in terms of breadth of experience and knowledge. While the UK has made some progress in terms of Gender, Sir John is already recommending that a portion of boards include those of different ethnic backgrounds. By ensuring a diverse board, companies not only widen their experience and knowledge base but also increase the talent pool from which they can attract future leaders.
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