PRAGMA CHAT.

 

8 key lessons for any Board (from the Coop Kelly review)

 

For 165 years, the Co-operative Group has prided itself on its ethical, inclusive & stable approach to business. But in March 2013, under the chairmanship of Rev.Paul Flowers, the Co-operative Bank announced losses of £600m. Moodys then downgraded its credit rating by a record six notches to 'junk' (Ba3) and the chief executive Barry Tootell resigned. 

In April 2014, Sir Christopher Kelly published his 158-page report titled "Failings in Management & Governance - the independent review into the events leading to the Co-operative Bank's capital shortfall".

If you have time, read The Kelly Review. It's a fascinating read, but it is lengthy.

If you don't have four hours, I invite you to read my key nuggets below. I've been through the entire document looking for the key lessons that are useful for any Executive or Non-Executive of any organisation. The points might seem obvious, but I experience that many Boards and Executive teams are not putting these basics into practice. 

I invite you to read, reflect and draw your own conclusions.  

1. Select your Board & Executives wisely
Make sure you have the right experience in key places. Recruit the best people for each role. Don't just recruit from within because it's easiest.  

2. Clarity of roles & accountability
Between Group Board (if you have one), Company Board and Executives, make sure you're crystal clear of roles, responsibilities and accountabilities. 

3. Make sure that you have good management information
Understand what's really going on in the business; information must enable you to clearly identify & track key issues.

4. Ambition with prudence
Being bold and ambitious is good, but make sure you understand the level of capability & amount of resource you have to deliver on your boldness. Also ensure that you have effective risk management. Ultimately, it's better to do a few things well, than take on way too much and execute poorly. Being 'over-initiatived' will prevent you from focussing on key issues. Be prepared to turn opportunity down in favour of focus.   

5. Clear strategy
Develop a clear and focused strategy. This provides direction to everyone in the business. It will also prevents 'kiddie in the sweetie shop' syndrome.

6. Listen to the signs
Where you engage with external advisers to provide advice, listen to them. They are impartial & have invaluable broad industry perspective.

7. Live your values
Make your values live and stick. Live them in all initiatives and embed them in behaviours. Translate your values into meaningful guidance. Make sure too that your espoused brand matches how you actually operate.   

8. A healthy culture 
Consciously and strategically develop your organisational & Board culture. The Coop had a culture that focused on good news, lacked accountability, tolerated underperformance, lacked transparency, discouraged challenge, and deferred problems.
Transparency, openness, debate, challenge, clarity & accountability are critical values needed in any successful Board or Executive team. These values will fundamentally impact how your Board works and how it makes decisions, which can be the difference between long-term sustainability & success and utter failure.  

Martin Palethorpe is an executive coach at The Pragma Group. For more details visit www.thepragmagroup.com or tweet @mpalethorpe

Martin Palethorpe works with CEO’s, senior managers and executive teams within some of the UK’s leading companies. For more details visit www.thepragmagroup.com or tweet @mpalethorpe