Making a Difference

Leadership, Change and Giving Back the Independent Director Way

Gerry Brown

• Verlag: De Gruyter
• Jahr: 2020
• ISBN:
  9783110706222
• Auflage: 1
• Thema: Business
• Thema: Corporate Governance

Are you one of the many people in this world who want to make a difference? What if you could make a real lasting difference to your community and change the lives of thousands? The answer is to become an independent director (ID).

Independent directors play a vital role in governing health services, charities, sporting bodies and educational establishments and can be especially effective in times of great change and uncertainty. Not only do they play a crucial role in steering and developing strategy, and managing risk, they are also the key to ensuring accountability. They are the people who ensure these organisations properly serve all of their stakeholders, be it employees, customers or the wider society. They are the real long-term custodians of organisations. Now, more than ever, these organisations are crying out for diverse, committed and engaged independent directors. The demand for impartial input is greater than ever before. There is no better time to step up and make a difference.

Gerry Brown's Making a Difference is the essential guide to becoming an ID, what to expect in that position, and what you can achieve once you are one. This book will inspire you to put yourself forward, take a seat at the table and get involved in organisational change. Democratising independent directorship is a powerful way to help transform policies from within and change things for the better.

Chapter 1 Giving back is the best way forward

The decision to make a difference often stems from a deep-seated desire to right a wrong. People want to do their bit to improve something in society that is just not right, however small or incidental that action might seem. Frequently though, what seems like the smallest action to make a change can escalate into something very significant indeed. This is certainly the case with Patrick Dunne.

Take a look at Patrick’s LinkedIn page today and you will see a long list of board successes spanning Europe, Asia and North America, as well as details of an impressive career as a serial social entrepreneur. He spent nine years as the chair of Leap, an organisation that helps some of our most challenged young people manage conflict more easily. He also chaired the EY Foundation, which also helps disadvantaged youth; ESSA, a start-up focussed on transforming education and career prospects in Sub-Saharan Africa; and Boardelta, a consultancy focussed on making a difference to boards. His executive roles include 26 years at 3i, the international private equity and venture capital firm. What makes this all the more remarkable is that Patrick did not start out with the proverbial silver spoon in his mouth. This is, according to Patrick, just why he was compelled to follow the path he has and worked so diligently to put back in as much as he has been able to.

His story began with a childhood in a ‘difficult part’ of Liverpool and he freely admits there were a fair number of challenges growing up. Even so, his mother instilled a strong ethic of generosity into the family.

‘In her view, there was always someone who was worse off than we were,’ Patrick said. ‘It was our duty to help.’

This philosophy struck a deep note with Patrick who, against the odds, managed to get a place at university and then a well-paid job. He began volunteering when at school with residential care company Leonard Cheshire, alongside numerous part-time jobs to make ends meet. As his career progressed, he continued to volunteer, mostly through Rotaract. He eventually joined 3i after completing an MBA and began to wonder if he could do more. Specifically, he started to question how he could use all the skills he had gained in the pursuit of building businesses, and put them to work building charities. His thoughts kept coming back to his own experience. Although mildly dyslexic, after a tricky start, Patrick had done well at school. It was the classic scenario: an inspirational teacher spotted his potential, in this case in maths, and encouraged him to build upon his skills. There were, Patrick decided, clear signposts from his story that might be able to help him find a way to support and inspire other disadvantaged young people to realise their own potential through education.

By lucky coincidence, as Patrick was formulating his thoughts, he was given the opportunity to become responsible for 3i’s charity budget. He felt the spending wasn’t focussed and that there was an opportunity to have a lot more impact. He persuaded the 3i board to focus the activity on supporting young disadvantaged people through education.

‘It was about applying venture capital techniques to increase social impact,’ he says. ‘I wanted to do more than giving a little bit of money to a lot of different causes and then forgetting about it.’

The strategy proved to be successful and soon led to a new opportunity to make a difference for young people. By this stage, Patrick had done a great deal of training around board development. This was primarily to help him be more effective when working with 3i’s clients, but the unexpected consequence was that a number of charitable boards came knocking. Could Patrick help them? Naturally, the one offer that Patrick was particularly attracted to was Leap, because of its focus on helping young people. It was not the obvious choice though – at the time, the charity was quite small and didn’t even have a website. Once again, Patrick followed his business strategy of going all-in to make a big impact, and very soon after, he saw results.

Patrick’s next foray into making a difference struck right into the heart of the motivations that had been generated from his own upbringing. He received an approach from an academic at Warwick University who told him that applications for maths degrees had dried up from in and around Coventry. A little digging revealed that a number of schools had dropped further maths A’ Levels from the Curriculum, thanks to budgets cuts. Further maths is a prerequisite for a place on the Warwick University maths degree. Additional research into schools further afield revealed the same thing. Most poignantly, the school in Liverpool, where Patrick had studied and excelled at maths, could no longer afford to offer the further maths course either.

The Warwick University academic who alerted Patrick to the issue only wanted an investment of just £5000 to set up a scheme that would train teachers in the further maths curriculum. Patrick got involved and the initiative became a big success. In fact, it evolved into the Further Maths Network, a hugely successful nationwide scheme.

Once again, Patrick started to think about the crossover between his day job and his charitable work. Were there lessons from the maths network success story that could be used to help other people? In his 3i role, whenever something worked well, he’d always worked on ways of developing it elsewhere by, say, launching a similar version in another country, or format. Could the same be done with the further maths model? The thought process led to volunteers who had pioneered the scheme in Coventry being sent to Africa to teach kids from even less privileged backgrounds. Again, it has been a huge success. Starting in Johannesburg, South Africa, the scheme has now expanded into Tanzania and Kenya. More than 750,000 kids have benefited from the training, which has been shown to improve maths results by 30%.

‘I’m incredibly lucky that there was this crossover with the role at 3i, focusing on boards and portfolio companies,’ Patrick says. ‘These were skills that I could transfer to tackle the stuff that needs tackling. It enabled me to step up and make a real difference.’

–

Right now, it is still impossible to fully understand the long-term consequences of the Covid-19 pandemic. For the most part, we have had to talk in generalities: ‘large scale’ economic downturn, ‘significant’ pressure on the health, social care and education systems, and ‘widespread’ business closures. We probably won’t truly know the full impact for years to come. What is clear, however, is that things will not be the same again for a long time indeed, and millions and millions of people will require some sort of long-term help.

On the plus side, there are clear signs of an enduring willingness to step up and help. Support for those on the front line of the pandemic response continues and there is still an army of citizens who are ready and willing to help and keep their communities going through the testing times. In the pre-pandemic days, 17% of the population went out of their way to ‘put something back’ every year. If you were to put a monetary value on the total number of hours volunteered, it would be £22 billion, according to the ONS. In the past year, it seems safe to say that this number will have increased many times over.

In the pre-pandemic days, the quest to make a difference meant everything from public demonstrations, whether it was teenagers giving up school to highlight climate change, to anti-capitalist marches, to protests against government policy. Meanwhile, nine million people donned bibs and ran to raise money for charity every year. On a less exhausting but no less noble level, hundreds of thousands of people gave up hours of their free time every month to volunteer, or just generally help out in their communities, doing everything from driving the elderly to hospital appointments, to helping out at the many historic properties, churches and gardens around the country. Once Covid-19 appeared, the focus of activities moved toward helping the NHS and local social groups. A veritable army of hundreds of thousands of citizens stepped up to register in organised groups, pledging to do what was required to help others during testing times. Others sought to plug the gaps in services and supplies by making PPE equipment for health workers, or making and delivering food and other goods to the elderly and vulnerable. Everywhere you look, there is no shortage of goodwill. Millions are doing something of their own to improve these inequalities.

If this describes you, and you’re a regular and active volunteer or demonstrator, or even someone who is new to it, prompted into action at a time of great national need, that’s great. There is now an opportunity to take your actions to the next level and make the time you give up work even more powerfully to help your chosen cause. What I am about to suggest will put you right at the centre of things, into a position where you are empowered to make real, positive changes towards the future. I am talking about becoming a board member so you can help influence meaningful social change from within. By signing up to be an independent director (ID), you will be getting right to the heart of what you care about the most. You will be able to oversee what an organisation does, see who it helps and how, and play a crucial role in delivering its services. IDs serve a vital role in any institution. They straddle that critical area between the top tier of management of that organisation and the users of its products and services. This is the opportunity to really make a difference in the causes you care the most about.

By taking a board role and becoming an ID, you can make the best use of your experience and skills to make meaningful changes in areas that personally resonate with you. You will be able to get into the centre of the action to sort out the problems from within. Most important, you will be able to use your passion for meaningful change and transform it into action.

Right now, there is no better time to consider becoming an independent director. The scale of the wider impact of Covid-19 on the economy and society as a whole is only now starting to emerge. While the pandemic was a public health crisis, the necessity for social distancing restrictions has dealt an unprecedented shock to all areas of our lives. Thousands of businesses have closed, with a corresponding impact on household incomes. Even where organisations have managed to survive, the financial impact on the millions of furloughed employees will be enduring. It adds up to a large amount of pressure on our welfare, health and social care systems, at a time when the government is scrabbling to catch up. At the same time, previously underfunded organisations in charity, the arts and community groups are at a breaking point. This is why the demand for impartial input is greater than ever before, and this demand is coming from a broader range of organisations, too. While at one time, independent directors were mainly associated with the corporate world, sitting on the boards of blue chip companies, all sorts of non-business and non-profit organisations now see value in the role. Many organisations are crying out for committed, passionate and experienced people to help. There are, for example, 170,000 charities in England and Wales and a similar number of sports clubs across the UK, all of which have governing bodies. The number of NHS Trusts runs into the hundreds and there are 130 universities in the UK. There are also positions in prisons, police authorities, government departments and housing associations all looking to strengthen their boards with IDs. In local communities, there are countless numbers of organisations, charities and advocacy groups in urgent need of support. If you are minded to become an ID, there are many, many directions to take.

The organisations in every sector were already under unbearable strain as a result of funding cuts following years of austerity before the pandemic. Meanwhile, the communities that public services seek to help are also buckling under the strain of vastly increased demand for services.

To understand the urgency, let’s just look more closely at some of the challenges being faced by just some of the sectors mentioned here. I’ll start with universities, a sector I am very familiar with thanks to my position as a member of the Council of the University of Exeter. While the University of Exeter is in robust financial health, it is the exception rather than the rule.

Universities had to plan for a 40% to 100% drop in international students in the year following the pandemic.¹ This is a crucial source of income for UK universities, totalling £13bn per annum, which are second only to the US in the number of international students it educates. International students make up half a million, or 20% of its entire student body.² There were many other reasons why so many universities were already spiralling into debt even before Covid-19. Since 1998, when tuition fees were first introduced, the financial burden of education has been shifting to the students who receive it, rather than on support from the government. When the fees were first introduced, they were capped at £1000 a year. Today, they are up to £9,250, although, subject to how the government implements the Augar Review, they may well see a highly significant reduction. While student numbers are still rising steadily, the freezing of student fees means that the income is not enough to sustain universities. The loss of government support is having a devastating impact on their bottom line.

To add to the pressure, since 2016, there has been a marked drop in the number of students enrolling from the European Union, thanks to the ongoing uncertainties around Brexit. Meanwhile, against all the advice from academics and advisors, the UK government included students in the target numbers for reduced immigration. As a result, the UK is now missing out on the revenue from thousands of international students. International students are amongst the most lucrative sources of income for universities. Both developments are costing universities and their local communities tens of millions in revenue every year.

In the past, when debt was cheaper, many universities launched aggressive expansion plans as a key part of their strategy to attract extra students. This could involve adding new buildings to UK campuses, or adding on a new satellite campus abroad. Millions have been borrowed from investors, with repayment projections relying on an ambitious growth in student numbers. However, with the cost of credit rising and those increased student numbers often failing to materialise, many universities are having to borrow more money to expand further, or simply to keep up with their current commitments.

Meanwhile, as with so many other sectors, the educational sector is grappling with an enormous pension deficit. The Universities Superannuation Scheme (USS), whose members include academics and higher education workers, was running at a £3.6 billion deficit.³

The effect of the economic consequences of Covid-19 means that this deficit is much higher. Proposed cuts to pensions have been met with loud protests and industrial action.

Under sustained pressure, many institutions have been tightening their belts and reigning in their spending. This means less investment in the quality of teaching and the calibre of staff, less investment in research and less investment in resources across the board. The result: a less satisfying, useful and fulfilling experience for students who quite rightly feel they are paying a great deal for their education and therefore deserve five-star service, whether it is in teaching, the quality of accommodation or additional sports and social facilities. The institutions that fail to find the right balance see student numbers plummet. This means that they reap lower fees and therefore have to cut their resources still further and see more disaffected students turn away. Sooner or later, the momentum of the downward plunge into debt becomes almost unstoppable.

The challenges are not going to go away. In fact, all the signs indicate that tuition fees are going to gain an ever-more prominent focus in politics in the coming years. The conservative government is, as previously noted, investigating whether or not to reduce student fees. What this means to the university sector is almost impossible to say, since no firm proposals have been floated, but there has been estimates that such a move could leave a £20 billion black hole in university finances. This hole is set to be even larger once the absence of international students is added to the mix. Where the money will come to fill that hole is yet to be seen. Given the enormous increase in the national debt to an estimated £300 billion, obtaining financial support from the government will be difficult. Suffice to say, every potential option seems dead-set to put an already beleaguered sector under more financial pressure. The sheer scale of the issues means that action is required now. Careful thought needs to be given to the make up of University Council members, and the people who join need to become deeply involved in understanding what is going on with these institutions.

The people we need to come forward as IDs will hold the right values about the sector, whether it is a school or hospital or charity. They’ll want the very best for that sector and they’ll want to achieve it in a very transparent way.

Richard Atkins,Further Education Commissioner for England and Independent Member, Exeter University Council

That the NHS is in as much if not more trouble than the higher education sector will come as no surprise to anyone. While the service coped brilliantly...

Inhaltsverzeichnis

• Title Page
• Copyright
• Contents
• Advance praise for Making a Difference
• Acknowledgements
• Chapter 1 Giving back is the best way forward
• Chapter 2 Good for me and good for you
• Chapter 3 Making a difference starts with a new perspective
• Chapter 4 Stop the rot. Scandals start at the top. Always
• Chapter 5 Why me? Characteristics of an independent director
• Chapter 6 What will you be signing up for?
• Chapter 7 Finding the right independent director position
• Chapter 8 Interviews, contracts and fees
• Chapter 9 Advice for first-time independent directors
• Chapter 10 Troubleshooting
• Chapter 11 Finding your voice and growing your role
• Afterword
• Index