The Independent Director by Palgrave Macmillan Professional Business

© Tim Baker 2015 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identiﬁed as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndsmills, Basingstoke, Hampshire, RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978–1–137–47014–0 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. Typeset by MPS Limited, Chennai, India.

Copyrighted material – 978–1–137–48053–8

© Gerry Brown 2015 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identiﬁed as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndsmills, Basingstoke, Hampshire, RG21 6XS Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978–1–137–48053–8 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. Typeset by MPS Limited, Chennai, India.

Copyrighted material – 978–1–137–48053–8

Contents

Acknowledgments

xii

About the Author

xiv

1 Introduction Why This Book? 2 The Importance of Independence Structure of the Book 6 9 Executive Experience NFC 10 TDG and Tibbett & Britten Personal Experience 18 Lessons Learned 20

22 Case Studies Datrontech plc 22 Quintiles Transnational Corporation Vantec Corporation 37 Keller Group plc 46 CH Jones Ltd 56 Forth Ports plc 64 U-POL Ltd 73 Michael Gerson Ltd 82 Biocompatibles plc 89 NFT Ltd 99 NovaQuest Capital Management

107

Copyrighted material – 978–1–137–48053–8

vi i

List of Figures and Tables

vi ii

Copyrighted material – 978–1–137–48053–8

Contents

Themes 118 Boards 118 Ownership 142 Strategy 161 Globalization 179 Risk 196 Advisors 211 Executive Teams 222 Independent Directors

238

258 Conclusion Lessons Learned 260 Future Challenge 263 A Final Note 265

266 Building a Portfolio Getting Started 267 The End Game 269

Notes

272

Index

276

Copyrighted material – 978–1–137–48053–8

ch ap te r

Copyrighted material – 978–1–137–48053–8

Introduction

Do not hover always on the surface of things, nor take up suddenly with mere appearances; but penetrate into the depth of matters, as far as your time and circumstances allow, especially in those things which relate to your profession. — Isaac Watts

The independent director (and, by extension, the independent chairman) has one of the most important jobs in business today. Over the past twenty years, a series of government and industry reports in the United Kingdom (UK) and the United States of America (USA) have focused a great deal of attention on the role of the independent director. Those reports, and that attention, have come in response to a series of industry and corporate scandals, the latest being the banking crisis of 2008. Subsequent codes of corporate governance around the world have laid more duties and responsibilities on the shoulders of independent directors, who now bear frontline responsibility for ensuring good corporate governance and accountability. But that responsibility, important though it is, is only the beginning of the job. Independent directors and chairmen also have a crucial role to play in directly adding shareholder value. They do so through, for example, their involvement in the development of company strategy, especially international strategy, and by enabling more effective management of risks.

Copyrighted material – 978–1–137–48053–8

An independent director is both a coach and a referee. He or she acts as a guide, mentor, and wise counselor to the firm’s executives. Good

Copyrighted material – 978–1–137–48053–8 The Independent Director

independent directors bring with them a wealth of knowledge from their own executive careers. They provide examples of best practice they have seen elsewhere; they recommend trustworthy consultants and advisors; they bring experience of working in different sectors and global markets, which the existing team may not have. They help guide and shape strategic thinking, perceptions, and understanding of risk. The one thing they do not do is get involved in day-to-day management; that is the province of the executive, and the boundary between their separate roles must always be respected. At the same time, the independent director is just that: independent. He or she stands back from the firm and examines it with a critical eye. Through both the main board and various committees, he or she ensures that the company is managed in the best interest of its stakeholders; not just the shareholders (though that is the common perception), but employees, customers, and society at large. He or she oversees the company’s compliance with all relevant laws and regulations, and ensures that it is governed in a moral way. If the independent director detects failings of governance, then it is his or her duty to speak out and warn the board of what is happening, even if the board does not want to hear it. This takes courage, of course, and courage is one of the key attributes of any successful independent director. But the consequences of not speaking out can be dire. “What were the non-executives doing?” asked the Financial Times in the aftermath of the banking crashes.1 It can be argued that the answer in many cases is that they were not doing their jobs effectively. The same applies to companies caught up in scandals, like the rash of corruption and bribery allegations that has run through the pharmaceuticals industry in recent years. Independent directors should be watchful for incidents of malfeasance and use their powers to stop them.

Why This Book? I can calculate the motion of heavenly bodies, but not the madness of men. — Sir Isaac Newton

The job of an independent director has become much more important, and I would argue too that it has also become much more challenging and difficult. But what is the public perception of the role? Here is a summary of opinions:

Copyrighted material – 978–1–137–48053–8

Introduction

Copyrighted material – 978–1–137–48053–8

A task for which no one is qualified.2 — Financial Times

The list of attributes required of the non-executive director is so long, precise and contradictory that there cannot be a single board member in the world that fully fits the bill. They need to be supportive, intelligent, interesting, well-rounded and funny, entrepreneurial, objective yet passionate, independent, curious, challenging, and fit. They also need to have a financial background and real business experience, a strong moral compass, and be first-class all-rounders with specific industry skills.3 — Financial Times

Good governance and strong management have never been more important to the health of … capital markets. In this context, non-executive directors have a critical contribution to make to the efficient running of companies, which in turn impacts the performance of the UK economy as a whole.4 — Alastair Walmsley, London Stock Exchange

Murray Steele, a former non-executive director and now lecturer at Cranfield School of Management, comments on how ill-prepared most independent directors are. “Few new directors are trained in what it means to be a member of a board,” he says. “Many don’t even understand the basics.”5 Another observer comments that in times of crisis, many non-executive directors look after their own reputations first and foremost, rather than devoting themselves to helping the management team resolve the problems. There are thus many different opinions about the role of the independent, or non-executive, director, and much more media attention is now focused on these directors, especially whenever a corporate scandal comes to light. I therefore thought it was important to share some of my own very diverse experience as an independent director in order to shed some light on the problems and challenges faced by independent directors. The purpose of this book is to explain what independent directors do, how they do it, and why. It begins by showing, through a series of case studies, the variety and complexity of issues faced by independent directors. It goes on to explore key themes that are critical issues for boards. The book is aimed at people who are interested in becoming independent directors themselves one

Copyrighted material – 978–1–137–48053–8

Copyrighted material – 978–1–137–48053–8 The Independent Director

day, or who simply want to know more about the role and what it entails. It is my hope also that some serving independent directors will also find it useful. Importantly, too, the role of independent director is expanding into the non-profit sector and many institutions now have independent directors, or trustees, or governors; for example, my own most recent appointment was to the Council of the University of Exeter. Directors in these non-profit organizations are often even less well trained and prepared than those in the corporate sector, and I hope that many of them will also find this useful. My intention in writing this book is to fill what I perceive to be a gap in the market. There are already a number of handbooks in print that describe the function of the independent director, concentrating largely on legal frameworks and responsibilities under law and regulation. These are invaluable, and every serving or prospective independent director should read at least some of these to ensure they understand the regulations and boundaries of compliance. But none of these books, it seemed to me, describe what it is like to be an independent director. The role requires much more than mere compliance. Independent directors are members of a team, the board of directors. They have to learn their roles in that team—and to some extent, create a role that suits them—and learn how to manage complex relationships. Even more vital than learning the rules and regulations, they need to learn the importance of true independence of thought and spirit, and how to maintain that independence in the face of adversity. They need to learn how to create vision, drive change, mentor and support colleagues, assess risks, and monitor and audit performance. Of course, they may have had the experience of doing these things already in their executive roles; but they will find carrying out these tasks in their new role to be very different. The purpose of this book is to convey some of the knowledge and skills involved, and to discuss the issues that lie beneath the frameworks of rules and responsibilities. Ultimately, we will not only discuss what independent directors do, but also what they are. The foundation stone of this book is my own experience. I took on my first non-executive directorship in 1996, and over the subsequent two decades I have been an independent director or chairman of eleven different organizations. Some have been small family businesses, while others have been major global companies. Some were publicly owned, others owned by private equity houses or other private owners. Some were domiciled in the UK, some in the USA and one in Japan, but nearly all had an international dimension and my duties as an independent director have taken me to many corners of the world. I have worked across many sectors, too, including logistics, construction,

Copyrighted material – 978–1–137–48053–8

Introduction

Copyrighted material – 978–1–137–48053–8

biopharmaceuticals, manufacturing, medical devices, information technology, chilled foods, ports, property, financial services and higher education. In the course of those two decades, I have been involved in difficult and sometimes unpleasant situations. I have had to deal with underperforming executives and the announcement of trading downgrades to investors. I have reviewed health and safety in the aftermath of workplace fatalities. My very first independent directorship was of a company that had to be wound up—a very trying and difficult time for all concerned. But I have been fortunate in most cases to be a director of very successful companies, and I have seen and participated in many splendid examples of best practice. In the course of this book, I will describe these incidents and practices in more detail and then lay out the lessons to be learned. I should emphasize, however, that this is not an autobiography or a memoir. This is a book about the role of the independent director and, while it is underpinned by my own experience, I also use examples of other companies and directors, and refer to academic and journalistic books and articles for support. Importantly, many other people have contributed to this book. More than thirty of my colleagues and business associates—including independent directors, chairmen, chief executive officers (CEOs), consultants, investment bankers, lawyers, audit partners, coaches, head-hunters, private equity partners—came forward to provide their own views on the role of the independent director. Their contributions have been invaluable, and this book would not have been the same without them.

The Importance of Independence Throughout the book I have used the term “independent director,” only using “non-executive director” where specific UK usage is intended. In the USA, the official title of the role is “independent director”; other jurisdictions have different uses, and, as mentioned earlier, terms such as “trustee” and “governor” are often used in non-profit circles. I prefer the term “independent director” because, to me, the name reflects the true nature of the role. Independent directors are just that: they are independent. Yes, they work closely with the executives, sometimes mentoring and coaching them, but they are always aware of the line separating them from the executives, and they know that crossing that line would compromise their independence.

Copyrighted material – 978–1–137–48053–8

Copyrighted material – 978–1–137–48053–8 The Independent Director

Independence is important because it allows a detached, dispassionate view of the company and its actions. Executives are very close to the company; they have to be, it is part of their job. But, as some of the CEOs interviewed for this book are quick to point out, the executives are often too close. Consequently, they have difficulty seeing the forest for the trees. They need people around them who are able to step back and see the broader picture. Executives also need challenge and stretch. They need people who can critically analyze their ideas, point out risks and errors and help them see and understand more clearly. This is why even small private companies and non-profit organizations are appointing independent directors in ever-greater numbers. They realize that having independent, critical minds in the boardroom sharpens their own thinking and gives it more focus. The CEO’s job can be lonely, and having an independent chairman or senior independent director to share business problems with can be very helpful. Independence also means that directors don’t go along with everything the executives say. When they see something that they think is wrong, they say so. That is a very important part of their duty. Their loyalty is not to the executive team; it is to the company as a whole. This can result in some very tricky situations. Tact, negotiation skills and a good sense of humor are also part of the armory of any good independent director. Independent directors are often appointed by shareholders and, especially in private equity-owned companies, they may have quite a close relationship with the owner. This might be seen as a contradiction: how can someone who reports to the owners of the business be truly “independent”? It is true that independent directors are there to represent the interests of owners and shareholders. But it is equally true that it is in the best of interests of the owners and shareholders that the company is run well, efficiently, and in compliance with the law. Failure to do so rebounds on shareholders as well as the company (and, increasingly, on independent directors themselves, who can be prosecuted if the company breaches the law). If shareholders wish to do something that is not in the best interests of the company, then it is again the duty of the independent director to point this out and recommend an alternative course of action.

Structure of the Book Books of this type often start by discussing key themes and then provide case studies by way of illustration. In this book, I am doing it the other way around.

Copyrighted material – 978–1–137–48053–8

Introduction

Copyrighted material – 978–1–137–48053–8

I start by discussing the importance of executive experience and how my own experience shaped my role as an independent director. I then move directly on to case studies of eleven organizations, listed here alphabetically: Biocompatibles plc, a medical technology company CH Jones Ltd, a fuel wholesaler Datrontech plc, a computer memory distributor Forth Ports plc, an operator of seaports in Scotland and England Keller plc, the world’s largest ground engineering company Michael Gerson Ltd, a removals and relocation company NFT Ltd, a chilled food distribution company Novaquest Capital Management, a private equity fund specializing in life sciences Quintiles Transnational Corporation, the leading global biopharmaceuticals research firm U-POL Ltd, a manufacturer of automotive repair materials Vantec Corporation, a logistics firm and spinoff from Nissan Each case study is divided roughly into three parts. A profile of the company and its recent history is followed by a discussion of the key boardroom issues in which independent directors were involved. The third section of each case is a description of the “lessons learned”: takeaways that can be applied to other organizations. These eleven cases are my raw material. I use these to construct eight central themes. I start with the role of boards, discuss their purpose and function, what can go wrong and how problems can be solved, stressing the need for teamwork between executives and independents. I go on to discuss ownership and how different ownership types impact on the board, and affect the role of the independent director. I then move on to strategy, an issue of paramount importance for boards and therefore for independent directors. Not everyone agrees on the extent to which independent directors should get involved in strategy. I believe they should be fully involved, and will explain why in more detail. One of the most important aspects of strategy is globalization, and we shall go into this in detail too, showing how independent directors can help companies that intend to expand internationally. The fifth theme is risk. In this theme we shall see what independent directors should be doing, how they should get involved in risk management and the approaches to risk that they must take. I then discuss the role of external

Copyrighted material – 978–1–137–48053–8

Copyrighted material – 978–1–137–48053–8 The Independent Director

advisors and consultants and how independent directors are involved in their selection and management. I come next to the executive team, and here I discuss the critical relationship between independents and executives—and especially, that between chairmen and CEOs—and how independent directors can both support the executives and remain independent; as we said above, acting as both coaches and referees at the same time. The final theme is the role of the independent director itself, summing up learning from the case studies and the other themes to present a comprehensive picture of the role. I look at two important subsets too, the role of chairman and the role of the senior independent director, or SID. Finally, after summing up the main lessons of the book, I offer a short chapter on building a portfolio. This is intended specifically for those who are interested in becoming independent directors. There are many ways of doing so, but I suggest it is a good idea to have a plan, just as one might plan a career. What kind of independent director do you want to be? What sorts of companies do you want to work with? I offer a few tips based on my own experience and that of others, a list of dos and don’ts, and finally a description of “the good, the bad and the ugly” independent director. It is up to you to choose which kind you want to be!

Copyrighted material – 978–1–137–48053–8

Index

3i 31, 38–9, 42–5, 107, 112–13, 115, 144, 185 9/11 attacks 82–3, 181

Abbott Laboratories 91, 93, 95 Abel, Steve 13 Aberdovey Golf Society 10 ABM AMRO 77–8, 81–2, 229 accountability 1, 19, 36, 119, 138, 140, 151, 177, 208, 222, 239, 255–6, 259 accountants 141, 211–12, 215, 245, 261 accounting procedures 57, 129, 199, 207 acquisitions 15–17, 19, 22, 24, 26–7, 30–5, 38–9, 47, 55, 62–3, 93, 98, 115, 132, 160, 163–4, 169, 172–9, 181, 188–9, 245, 248 Ardrossan 67 advisors (see also consultants) 2, 8, 21, 42, 63, 81, 102, 105, 131, 153, 157, 163, 171, 173, 175, 200, 210, 211–22, 238, 246, 248–9, 261–2, 264, 267 Africa 31, 34, 48, 50, 74, 75, 80, 182, 180, 191 AIFM Regulation 158 Alvarez & Marsal 223 Amsterdam 47 Anderson Drilling 49 Andrews, Kenneth 162, 171 angiodynamics 89 anti-competitive behaviour 122, 196

AOL 175 Arcus Capital 69 Ardill, Ian 93 Arthur Andersen 31, 122 Asda 99–100, 115 ASEAN 180 Associated British Ports 65, 67 AstraZeneca 89, 95–6, 163 Atkinson, Justin 49, 53–4, 223–4, 229, 232, 255 audit committees 31, 73, 116, 132–5, 141, 204, 206, 215, 219, 221, 230, 243–5, 255, 262 auditors 31, 134–5, 197, 199, 210–14, 217, 219–21, 261–2, 267 Australia 13, 46, 48, 50, 52–4, 75, 111, 181, 189 Austria 50 Autrans Europe 39 Ayres, Andrew 230 Bahrain 50 Bain Capital 31, 107, 112–13, 115–16, 144, 159 Bank of Scotland 66, 83–6, 88–9, 122, 144, 146, 166, 258 Bank One 31 banking/financial crisis 1–2, 52, 66, 68, 72, 86, 113, 122, 126, 156, 161, 172, 198, 201, 223, 234–5, 254, 258–9

Copyrighted material – 978–1–137–48053–8

Index

banking, investment 5, 63, 97, 102, 211–12, 214–15, 219, 221, 249 banking, merchant 163, 261 bankruptcy 147, 270 banks 24, 26, 31, 39, 63, 66, 82, 83–6, 88–9, 97, 107, 109, 112, 122, 143, 147, 166, 196, 201, 205, 210–12, 214, 219, 225, 245, 258 barriers to entry 45, 101, 111, 115, 171 Bauer Group 51 Bayer HealthCare 89 Beckham, David 55 Belfast 47, 67, 68 Belgium 13, 34, 65 bio-pharmaceutical industry 5, 7, 29, 167, 193 Biocompatibles plc 7, 89–99, 105, 115–16, 121, 125, 128–9, 135–6, 141, 144, 151, 163, 165–7, 174, 178, 181, 187, 194, 198, 208–9, 212, 223, 225, 227, 231, 242, 248, 252, 256, 261, 266 Bland, Sir Christopher 17, 231 board composition 123–6, 137, 139, 142,160, 186, 194, 221, 251 board continuity 19–20, 26–7, 56, 61, 96, 131, 206, 265 board diversity 20, 36, 39, 70, 72, 116, 138–41, 159, 211, 223, 256, 262, 265–7, 270 board effectiveness 127, 134, 138, 147, 267 board evaluation 135–8, 142, 251 board meetings 28, 43, 53, 59–60, 63, 70, 72, 80, 107, 119, 130–1, 141, 225, 229, 241, 243, 247, 250, 268–9, 271 board objectives 133–4, 166, 167, 190, 207, 251 boards, conflict on/with 45, 124, 139, 143, 147, 227, 252, 264 boards, future of 118, 138, 263–4

27 7

Copyrighted material – 978–1–137–48053–8

boards, role of 1–2, 7, 99, 106, 118–42, 149, 151, 157, 162, 168, 172, 174–5, 179, 182, 185–6, 191–2, 204–5, 210, 212, 219–20, 237, 240, 247–8, 253, 256, 259–60, 261, 263 boards, size 125, 131, 137, 140 boards, tension on 138–9 boards, typologies 125–6 Boardsearch 246–7 BOS 16 Boyle, Ian 22 BrachySciences 91, 93–5 Bradley, John 112 branding 14, 18, 49, 58–9, 61, 74, 76–7, 82, 86, 88–9, 168, 175, 183, 188 Brazil 50, 52, 115 breadth of experience 18, 20, 21, 157, 164, 226, 255, 266–7 BRIC countries 109, 182 British Gas 10 British Museum 47 British Petroleum 10, 59, 73, 82 broad picture 6, 27, 148–9, 164, 166, 186, 204, 245, 247 brownfield investment 189 BRS (British Road Services) 11–15, 18, 169 BTG 93, 97–8, 144 Burns, B.K. ‘Robbie’ 14, 173, 235 Burntisland 65, 67 business environment 27, 55, 108, 111, 113–14, 116, 126, 130, 134–5, 137–8, 153, 176–7, 179, 181–2, 183, 185, 186, 202, 224, 226, 250, 256, 259–60 business model 16, 25, 49, 147, 168, 183, 209, 236 buy and build 81, 156, 158, 264 Cadbury Report 240 Cairnie, Ruth 242 Canada 13, 50

Copyrighted material – 978–1–137–48053–8

27 8

Copyrighted material – 978–1–137–48053–8 Index

Carr, Sir Roger 255 Cartwright, Cliff 59 Case Foundation 49 Cellmed 89, 91, 93–6, 115 Cemex 67 centralization 27, 33, 37, 53, 55, 163, 176, 182, 190, 192, 236, 249 CEO (chief executive officer) 5, 6, 8–10, 17, 24–5, 27–8, 35, 38–9, 44, 46, 49, 53, 55–6, 59, 61, 69–70, 71, 78–9, 95–6, 98–9, 103, 106–7, 115, 119, 124–5, 128–9, 130, 132, 133, 135, 139, 141, 148–51, 156, 174–6, 178–9, 195, 205, 212, 218, 221, 222–39, 245, 247–252, 254, 255, 260, 262, 264 CH Jones Ltd 7, 56–64, 115, 116, 121, 125, 144, 152–3, 163, 167, 174, 181, 198, 210, 212, 223, 225, 226–7, 229, 238, 241, 248, 252, 261 chairman/chairmen 1, 4, 6, 8, 15, 17, 18, 21, 24, 25–6, 31, 35–6, 38–9, 43, 46, 51–6, 61, 68–9, 70–3, 78, 80, 82–3, 86–8, 97, 99, 106–7, 112, 116, 124–6, 128, 130–7, 139, 141, 148–9, 152, 156, 159–60, 162, 165, 174, 205, 209, 212, 214, 222–4, 227–9, 231, 233–5, 237–9, 241, 244, 247–53, 255–6, 260, 262, 270 chairman, relationship with CEO 6, 46, 106–7, 132, 141, 148–9, 156, 174, 222–3, 228–9, 233–5, 238, 249–52, 262 chairman, relationship with other independent directors 21, 56, 69, 70, 162, 165, 223, 227–8, 238–9, 244, 247, 250–1, 253, 256, 260 chairman, responsibility of 78–9, 87,106–7, 124–6, 130–6, 141, 148–9, 152, 209, 228–9, 233–4, 237–8, 244, 247, 249–52, 260, 264, 270

chairman, role of 8, 46, 53, 54, 69, 70, 72–3, 78, 80, 82, 88, 106–7, 124–6, 128, 130–7, 139, 141, 148–9, 152, 159–60, 165, 209, 212, 222–3, 228–9, 233–5, 237–8, 241, 244, 247, 249–52, 253, 256, 260, 270 Chapman, Dennis 89–90 charities 43, 241, 259 Charles, Brian 83, 87 Chatham 65 chilled foods industry 5, 7, 16, 99–107, 145, 267 China 13, 45, 52, 77, 80, 108, 115, 149, 180–2, 190, 195 Christensen, Lawrence 105, 130, 141, 146, 161, 166 Clayton, Marie Louise 242 Clydeport 65, 67 Co-operative Bank 178 coaching 1, 5, 8, 19, 103, 127, 235, 243, 245, 254 Coca-Cola 39, 40 codes of corporate governance, see corporate goverance, codes of Cohen, Fred 116 Collins, Chris 69, 71, 73, 128, 130, 226, 249–50 communication, importance of 32, 36, 127, 129, 137, 151, 165, 167, 190, 199, 208, 218, 237, 244–6, 253, 265 communications 58–9, 127, 129, 177, 180, 190, 203, 208, 237, 244, 245 compensation, directors’ 132, 271 competitive advantage 21, 30, 38, 123–4, 128, 162, 167–8, 171 competitors 58, 68–9, 76–7, 101, 107, 149, 168, 180 compliance 2, 4, 6, 129, 138, 145, 148, 196–7, 198–200, 202–3, 208–9, 214, 228, 243 conflicts of interest 26, 120, 175, 221, 237, 264, 270

Copyrighted material – 978–1–137–48053–8

Index

conformity, excessive 131, 138–40 construction industry 51–2, 223–4 consultants 2, 5, 8, 24, 53, 133, 136, 142, 166, 208, 210–15, 220–1, 223–4, 226, 240, 248, 261–2, consultants, specialist 53, 133, 142, 166, 211–15, 221 Contract Research Organizations (CROs) 193–4 corporate finance 85, 88–9, 150, 214, 242, 267 corporate genetic code 169, 176 corporate governance 1–3, 24–5, 43, 55, 56, 63, 119–20, 122, 126–8, 138, 140, 143, 147–50, 152, 177, 184, 188, 190, 192–3, 196, 222, 226–8, 240, 243, 245, 248–9, 253–4, 258–9, 262–3, 269, 271 corporate governance, codes of 1, 124, 133, 138, 149–50, 240, 245, 253–4, 263 corporate governance, failings of 2, 6, 89, 119–22, 140, 147, 151, 196, 199–201, 234, 263 corporate removals 82–5 corruption 2, 119, 122, 184, 200, 259, 271 courage 2, 191, 226, 242, 257 Cranfield School of Management 3, 119 critical friend 2, 6, 235, 244, 255, 269 Crossrail 47, 54 cultural differences 18–19, 33, 42–6, 55, 114, 124, 143, 172, 176, 179–96, 233, 241, 254, 259 culture, board 125–8, 131, 137, 141, 164 culture, corporate 12, 16–17, 20, 26, 33, 36, 42–5, 46, 52, 55, 60, 72, 78, 80, 81–2, 86, 88–9, 105, 114, 125, 143, 156, 158, 164, 175–6, 192–3, 204, 207–8, 209, 213, 217, 228–9, 231, 237, 243, 250, 260, 264

27 9

Copyrighted material – 978–1–137–48053–8

culture, country 42–6, 172 Curnock Cook, Jeremy 90, 98, 256 customer base 76–7, 85, 115, 195 customer focus 16–17, 57, 59, 74–7, 87, 97, 102, 121, 167, 168, 175, 178, 194, 208 Czech Republic 13, 50 Dantsuka, Todd 116 data room 63, 157 Datrontech plc 7, 22–28, 35, 64, 116–17, 121, 140, 143–4, 151, 153, 161, 163, 165, 169, 170, 173–4, 176, 179, 181, 198, 209, 212, 224–5, 228, 231, 237, 248, 251–2, 260–1 Davis, Mark 105 Daw, Richard 102–4, 106–7, 145 de Vere, Andy 105 decentralization 35, 53, 55, 115, 176, 181, 190, 207, 232, 248 decision making 16, 35–7, 54–5, 70, 78–9, 82, 84, 89, 95, 108, 111, 123, 127–8, 132, 139–40, 145–6, 148, 166, 171–3, 175, 177, 185, 189, 192, 201, 202–4, 209, 211, 217–18, 222–3, 227, 233, 235–6, 237, 255–6, 262, 267 declining markets 52–3, 58, 66, 76, 86–8, 110, 171 Deutsche Post 38–9, 44 direct investment 154, 187 Directorbank 78 directors, executive, see executive directors directors, independent see independent directors directors, non-executive see nonexecutive directors directors, performance of see performance of directors directors, senior independent see senior independent directors disinvestment 115

Copyrighted material – 978–1–137–48053–8

28 0

Copyrighted material – 978–1–137–48053–8 Index

disposals 19, 32–3, 35, 163, 176–7 distribution, see logistics diversification 11–12, 30, 32, 41, 44–5, 47, 51–4, 66, 68–9, 71–2, 77, 93, 121, 163, 171, 205 diversity of thought 36, 70, 116, 138–41, 211, 223, 255, 262, 270 dividend policy 123, 151 DKV 62 Dodds Frank Act 158 dos and don’ts 8, 246–7, 268 Dover 67, 68 downsizing 17, 115 Dronfield Foods 99 Dubai 47 due diligence 32, 84, 157, 160, 175, 189, 198, 214, 226, 242, 245, 254, 267 Dundee 65, 67 East India Company 180 economic crisis (see also banking/ financial crisis) 50, 51–2, 69, 70, 71, 152, 172, 224, 258 Edge, Steve 197, 213, 217, 241, 255 Edinburgh 64–5, 67, 70–1 Egypt 50 Eisai 89, 91, 187, 195 Eli Lilly 33 emerging markets 158, 188–92, 195 employee ownership 10, 12, 16–17, 20, 124, 143, 231 employees 2, 10, 12, 14, 16–18, 20, 40–1, 43, 46, 120, 124, 128, 133–4, 143, 157, 186, 191, 196, 198–200, 207, 210, 223, 226, 231, 236, 238, 243, 247, 251, 263 engineering 46–56, 115, 177, 181, 207 Enron 31, 121, 135, 147–8, 199 environment and sustainability 19, 76, 121, 137–8, 177, 186, 263 Esso 59 Europe 13, 15–18, 22, 24, 25, 31, 33–6, 39, 45–9, 59, 69, 73, 77, 80,

84, 89, 91, 103, 111, 115, 124, 149, 163, 165, 178, 180–2, 187, 188–9, 192, 195, 200, 211, 240, 249, 267 evaluation 19, 172, 204, 226, 244 Evans, Hywel 33 executive directors 9, 17, 32, 44, 69, 70, 96, 107, 118, 124, 131, 133, 138–40, 142–3, 148, 164, 201, 226, 235, 241, 247 executive pay 120, 132 executive team characteristics 232 executive teams 6, 8, 20–1, 88, 124, 132, 143, 145–6, 156, 159, 195, 205, 211–12, 215, 221, 222–36, 238, 243, 245–6, 248–49, 256, 265 executives 1–2, 5–9, 24, 26–8, 33, 35, 36–8, 42, 43, 52–4, 56, 63, 70–2, 80, 82–4, 87–8, 105, 120, 126, 128, 132–3, 137, 140, 145–6, 147–8, 153, 157, 162, 164, 174, 178, 181, 192–3, 201, 212–13, 221–35, 238, 240, 245, 255, 259, 261, 262–4 Exel Logistics plc 13–16, 18, 20, 38–9, 42, 44, 45, 61, 105, 163, 169, 173, 195, 235, 249 experience, international see international experience experience of directors 9–21 exporting 40–1, 77–9, 115, 182, 187 Factor Service Group (FSG) 76 failure 6, 24, 27, 30, 43, 46, 85, 88–9, 119–22, 133, 138, 140, 146–7, 153, 157, 161, 169, 175–7, 179, 181–3, 185–7, 192, 196, 198–200, 203, 210, 224–5, 231–2, 234, 244, 251, 263, 269 Fairey, Anne 96, 98, 242 family of funds 108, 155, 160, 182, 185, 252 Family Mart 39 feedback 142, 235 Felixstowe 67–8

Copyrighted material – 978–1–137–48053–8

Index

Ferguson, Maria 105 Ferguson, Sir Alex 231 Fiddy, Dale 105 financial reporting 147–8 financial rewards 270 financial services 5, 86, 121–2, 203, 264, 267 Financial Times 2–3, 151, 196, 239, 243 Fine, Steven 239 Fisher, Alex 105 Fleetcor 61 Flowers, Paul 124 focus 6, 22, 25–7, 32–3, 35, 38, 49, 52, 54, 59, 62–3, 68, 87, 90, 103–8, 115, 121, 123, 125, 129, 148, 152, 156–7, 163, 167–8, 170, 176, 193–4, 207, 213, 235–6, 241, 243, 248–9, 261, 268 Food and Drug Administration (FDA) 98, 109–11, 181 Ford Motor Company 152 Forth Ports plc 7, 64–73, 97, 105, 115–16, 121, 125, 128–30, 135, 141, 144, 151–2, 161, 163, 165–7, 169–70, 177, 181, 198, 205, 206, 212, 225, 236, 242, 248–51, 252, 255, 260–1 France 13, 15, 50, 75, 78, 147, 233 franchising 188 Frankish, David 99, 107, 156, 228, 232 Franklin, Roy 51, 53–4, 56, 234 fraud 119, 199–200, 202, 259 FTSE 11, 92, 254 fuel market 56–62 Fulton, Thames 153 fund managers 144–5, 150, 156 GATT 180 General Motors 131 Germany 13, 16, 47, 50, 74–5, 89, 162 Ghosn, Carlos 38 Gillings, Dr Dennis 29–30, 32, 35–6, 107–8, 151, 153, 192–3, 211, 232, 235, 237, 256

28 1

Copyrighted material – 978–1–137–48053–8

Gillings, Mireille 108 GKN 47, 181, 228 Glading, Perry 67 Glasgow 67 Global Crossing 147 globalization 7, 33, 126, 160–1, 171, 177–8, 179–96, 238, 254, 259, 261, 263, 265 GOH Capital 108, 114, 155, 160, 185 Gordon, Chris 116 Gordon, Jeffrey N. 239–40 governance, see corporate governance Grangemouth 65, 67 Graphite Capital 74, 77, 89, 144, 167, 229 Greece 50 Greenbury Report 240 greenfield investment 188–9 Greenock 67 Grimsby 67–8 ground engineering, see engineering group dynamics 70, 138, 139–40, 222, 255 group polarization 140 groupthink, see conformity, excessive growth equity 108, 155 Gupta, Anil 182, 191 H.J. Foundation 49 habitual routines 139 Hammond, Charles 69–71, 129, 165, 255 Hanson Green 50, 69, 136, 141, 178, 217, 235, 257, 267 Harvard Business School 19 Harvey, John 18, 39, 162, 173, 237 Hawkpoint Partners 22, 63, 239, 256 Hayward Baker 47, 49, 56 head-hunters, see search consultants health and safety 5, 15, 19, 47, 54, 100–1, 116, 120, 129, 135, 137, 177, 197, 198, 202, 203, 207–8, 214, 225, 243 health and safety committees 54, 120, 135, 137, 207–8, 225, 243

Copyrighted material – 978–1–137–48053–8

28 2

Copyrighted material – 978–1–137–48053–8 Index

hedge funds 123, 143, 151, 259 Hewlett Packard (HP) 22 Higgs Report 240, 253 Hill, Andrew 196 Hong Kong 13 Hopkin, Paul 196–7, 202, 203–4, 206, 208 Hull 67–8 human resources management (HR) 10, 19, 20, 37, 46, 49, 105, 115, 132, 168, 176, 230, 245 Hungary 13, 50 Hunterson 67 Huse, Morten 118, 125–7, 131, 136, 147 Hutchison Whampoa 67–8 Huya 108 ICM Kungsholms 85 Ikeda 38 incentives 35, 63, 133 independence, nature of 4–6, 35–7, 126, 161, 227, 229, 243–4, 247, 253, 255, 259 independent directors, attributes of 2–4, 9, 46, 72, 142, 152, 153, 160–1, 163–4 171–3, 175–8, 194–5, 197, 200–1, 210, 219, 226, 228, 234–6, 239, 242–250, 254–7, 266 independent directors, career planning 2, 8–10, 13, 19–20, 21, 112, 266–71 independent directors, characteristics 4, 26, 36–7, 78–9, 118, 152–3, 161, 191–2, 197, 219, 239, 246, 254–7, 262–5, 271 independent directors, competencies 9, 126, 163, 175–80, 183–5, 191–2, 194–5, 221, 234–5, 243–50, 254–7, 261, 263 independent directors, need for 6–7, 20–1, 24, 28, 32, 42, 60, 86, 96, 98–9, 112, 140, 159–60, 163–4,

171–3, 179–80, 183–7, 212–13, 218, 220, 223–4, 228, 231, 238, 241, 255–7, 261, 265 independent directors, problems facing 3, 26–7, 28, 42–4, 82, 86, 123, 124–5, 129–30, 148, 152, 153, 157–8, 173, 175, 187, 198–9, 208–9, 211, 227–9, 233, 238, 246, 255–6, 259, 268–70 independent directors, training and education for 3–4, 137, 243, 261, 264 India 34, 50, 52, 77, 80, 149, 158, 180, 182–3, 190, 193–4, 207–8, 240 Indonesia 50 industry knowledge 3, 9, 18, 54, 70, 76, 95, 102, 111, 159, 172–3, 193, 207, 239, 243 information technology (IT) 5, 19, 22, 29, 34, 38, 40–1, 57, 59, 62, 68, 85, 101–2, 105, 115, 176, 178, 191, 194, 198, 203, 210, 267 initial public offering (IPO) 39, 42, 254 Innes, Mike 83–7, 89 insider dealing 120 Institute of Directors (IOD) 243, 253 insurance companies 40, 143, 146, 150, 154, 196, 200 intellectual property 93, 95, 186, 187 international experience 4, 9, 18–21, 25, 33, 37, 39, 44, 51, 78, 160, 179–80, 183, 186, 191, 195, 215, 225, 247, 251, 254, 259, 261, 263 International Computer Products (ICP) 24 Internationalization 20, 178–9, 183, 187, 195–6 investment bankers 5, 63, 97, 102, 211–12, 214–15, 219, 221, 249 investment in people 37, 55, 79–80, 89, 96–7, 105–6, 120, 128–9, 185, 191, 218, 220–1, 227, 237

Copyrighted material – 978–1–137–48053–8

Index

investor relations 5, 46, 83, 107, 111–14, 131, 146–7, 151, 159–60, 240–1, 245, 253, 263–4 investors 31, 43, 46, 55, 56, 71, 81–3, 89, 107, 111–14, 123, 131, 143–4, 146–7, 150–2, 154–60, 165–7, 181, 205, 240–1, 243–5, 248, 252, 254, 263–4, 269 Ireland 75–7 Irons, Ron 14 ISOPON 74 Italy 50, 147 Japan 4, 13, 37–9, 41–5, 89, 91, 107, 112, 114, 125, 144, 149, 172, 180–1, 183, 187, 191–2, 195, 225, 233, 248 JATCO 39–40 JH Whitney & Co 154 JIDECO 39–40 Jimenez, Pedro 55 Johnson, Peter 169 joint ventures 33, 188–9, 193, 202 Julien, Jean-Charles 75–6, 78–82, 224, 228–30, 232 Keller plc 7, 46–56, 63, 87, 115–16, 120–1, 123–5, 129, 131–2, 135–6, 141, 143–44, 151, 163–8, 170, 172–4, 176–7, 181, 189, 198, 206–8, 209, 212, 223–5, 227–9, 232, 234, 236–7, 242, 248, 252, 255, 261–62 Keyfuels 57–8, 61–2 Kilkaldy 67 King, Justin 107 King, Steve 22, 25 Kirkpatrick, Ian 25, 228 knowledge, of industry sectors, see industry knowledge knowledge, personal 2, 20–1, 35–6, 54–6, 106, 137, 139, 160, 166, 173, 179, 186, 191, 202, 209, 222–3, 241, 243–4 Korea 55, 187

28 3

Copyrighted material – 978–1–137–48053–8

KPMG 24, 132, 134, 204, 212, 217, 219 Kwik-Save 16 language 43, 185, 194, 207, 220 lawyers 5, 105, 210–12, 214, 219, 234, 249, 261–2 Lay, Kenneth 148 lead directors 124–5 leadership 14, 73, 88, 94, 127, 141, 183, 193, 208, 231–4, 246, 251, 265 Lehman Brothers 122, 146, 254, 258 Leith 64, 66–7, 70–1 LEK 53, 217 liabilities 186, 254, 263 licensing 89, 94, 96, 187, 195 Lidco 91–2 liquidation 26, 121, 163, 248, 251–2 Liverpool 65–8 logistics industry 4, 7, 13–18, 25, 32, 37–41, 44, 67, 69–72, 75, 99–100, 104, 106, 115, 162–3, 166, 169, 182, 195, 210, 224, 248–9, 266–7 London Business School (LBS) 19 London Stock Exchange 3, 47, 64, 144, 150 Lorsch, Jay 118, 138–9 Lowfield Distribution 99 Lowson, Brian 33 Luxembourg 13 Macdougall, Alan 149 Mackay, Alan 137, 158 Mackay, Niall 83 Malaysia 13, 50 management 2, 10, 12–13, 19–20, 27, 33, 35, 38, 41, 42, 46, 55, 57, 61–2, 64, 71–3, 76, 82, 87–9, 105–7, 115, 123–8, 131, 133–4, 137, 145, 149, 153, 157, 159, 175–8, 183, 190–4, 200, 220, 236, 241, 245, 249, 255–6, 262, 264, 266 management buy-out (MBO) 10–12, 17, 20, 31, 33, 38, 39, 43–4, 46, 74, 77–8, 80, 83–6, 99, 102–3, 105–8, 144, 157–8, 225, 228, 252

Copyrighted material – 978–1–137–48053–8

28 4

Copyrighted material – 978–1–137–48053–8 Index

management team 3, 21, 24, 26–7, 33, 59, 76, 80, 83, 86–7, 89, 97, 103–6, 113–15, 119, 122–3, 143, 156–7, 192–3, 216, 225–8, 230–1, 234, 245, 252, 265 Manchester United 55, 231 manufacturing 5, 22, 24, 41, 74, 78, 96, 99, 101–2, 115, 180, 182, 186, 198, 208, 267 marketing 62, 75–6, 105, 111, 151, 157, 182, 188, 192, 237, 245, 266 Marks & Spencer 149, 185 Marshall, Andrew 204, 212, 219–20 Massey, Simon 119, 213, 217–18 Mather, Jack 17 Mazda 38–9, 45, 163 McKinney Drilling 49 McKinsey & Company 69, 96, 119, 165, 180 McLachlan, Sandy 20 McPherson, Allan 13 medical devices industry 5, 93, 108, 115, 129, 267 Medtronic 89, 91, 115, 248 Melvin, Colin 150 mentoring 1, 4–5, 19, 128, 193, 235 Merchant Adventurers 147 Mergers 39, 172–9, 245 mergers and acquisitions (M&A) 15–16, 39, 115, 172, 173–9, 245 Merron, Ken 42, 44 Mersey Docks and Harbour 66–8 Merz Pharma 89, 96 Methil 65, 67 Mexico 13, 16 Michael Gerson Ltd 7, 64, 82–9, 115–16, 121, 125, 139, 143–4, 153, 163, 165, 171, 178, 181, 198, 212, 224, 225, 237, 248, 251–2, 256, 260, 270 Millennium Dome 47–8 Minoru, Itosaka 39

MINT countries 109, 182 Mintzberg, Henry 37, 162, 171 mis-selling 122, 196 Mitsui 107, 112, 116 Mizhuo Capital Partners 39, 43, 163, 167, 252 morality 2, 122, 185, 196, 237, 239 Mortimer, Mike 33 Moscow, Fran 103, 235 Motorola 152 Moyes, David 231 Mulford, Mark 24 Murphy, Gerry 17 NAFTA 180 NASDAQ 30–1, 135, 144, 240 National Freight Corporation (NFC) 10–17, 19, 20, 85, 128, 143, 211–12, 231, 250 National Health Service (NHS) 109 National Westminster Bank (Natwest) 24 negative group conflict 139 Netherlands 13, 16 New York Stock Exchange 31, 150, 212, 240 New Zealand 13 Newton, Sir Isaac 2, 222 NFT Ltd 7, 99–107, 115–16, 121, 124, 128, 130, 143–5, 154, 156–9, 163, 165–7, 170, 174, 177–8, 181, 198, 206, 208–9, 212, 215–16, 224–5, 230--3, 248–9, 252, 260–2 Nikko 67–8 Nissan Motor Company (RenaultNissan) 7, 37–42, 45–6, 115, 144, 163, 177, 182, 195, 198, 249 nomination committees 135, 244, 246–7 non-executive chairman 70, 78, 86, 99–100, 112 non-executive directors 2–5, 28, 70, 73, 119, 133, 141, 161, 173, 213, 226, 235, 239, 243, 247, 255–6, 258, 259–60, 266–7

Copyrighted material – 978–1–137–48053–8

Index

non-profit sector 4–6, 259–60 Nordic Group 65–6 Nortel 166 North America 13, 15, 17, 33, 35–6, 46, 48–9, 51, 73, 79–80, 180, 185, 190, 192, 224, 228, 233 Northern Foods 99, 105, 144, 177, 230 Northern Rock 122 NovaQuest Capital Management 7, 31, 37, 107–117, 121, 144, 155, 163, 167–8, 182, 198, 205, 212, 223, 225, 231, 249, 252, 255, 261–2 Novartis 91, 96 O’Brien, Jim 116 Ohata Yasutoshi 39 Okuno Shinsuke 38, 42–5, 229 O’Neill, John 78, 81 objectivity (see also outsiderinsider) 3, 35–6, 78, 132, 134, 220, 238–9, 244, 251 operational efficiency 24, 34, 42, 49, 115, 119, 210, 211 operations management 18, 25, 35–6, 61, 63, 82, 93, 96, 99–100, 105–6, 128, 139, 182, 188–9, 192, 198, 208, 235, 266 organic growth 15, 18, 32, 34–5, 115, 174, 181, 248 original equipment manufacturers (OEMs) 22, 24, 40 outsider-insider 35–7 outsourcing 14, 29, 30, 41, 62, 75, 170–2, 199, 203 ownership, family 4, 74, 78–9, 81, 115, 143, 144, 152–4, 163, 224, 249, 252, 260 ownership, private 4, 6, 31–3, 35, 51–2, 55, 119, 123, 125, 142, 143–6, 149, 151, 152–8, 163, 211, 214, 226, 240–1, 254, 260–1 ownership types 7, 10, 12, 16–17, 20, 123, 129, 142–7, 150, 152–8, 160, 231, 252, 261, 267

28 5

Copyrighted material – 978–1–137–48053–8

P&O 67 Parmalat 147 partnerships 16, 31, 45, 62, 66–7, 80, 93, 95–6, 108, 114, 167, 245, 262 patent cliff 29, 30, 109, 110 Peck, Francis 82, 83, 85–7, 89, 251–2, 256, 270 Peck, Ray 24 Pellew, Martyn 14 pension funds 143, 146–7, 150, 154 performance monitoring 4, 125–6, 128, 134–5, 145–7, 157, 164, 166, 171, 187, 200, 204, 206–7, 222, 225, 230, 240, 245 performance of directors 4, 37, 133–4, 169–70, 215, 222, 227, 233, 243, 247, 250–1, 253, personal reputation, see reputation, personal personal responsibility, see responsibility, personal personality 36, 127, 139, 195 PharmaBio 108 Phoenix Equity Partners 99, 102–3, 105–7, 124, 144–5, 156, 158–9, 167 pluralistic ignorance 139 Poland 13, 50, 54 politicking 139 Polly Peck 240 portfolios of directorships 8, 21, 78, 81, 159, 179, 229, 266–71 ports 5, 64–8, 70–2, 167 Portugal 50, 75 PPMV 38, 43–5 Preece, Steve 33 private companies see ownership, private private equity (PE) 4–7, 21, 31–3, 39, 43, 46, 74, 78, 80–2, 83, 85, 88–9, 103, 107–17, 119, 123–5, 129, 143–4, 146, 152–61, 163, 166, 167–8, 182, 185, 195, 216, 224, 225–6, 229, 240, 249, 252, 260–1, 264, 266

Copyrighted material – 978–1–137–48053–8

28 6

Copyrighted material – 978–1–137–48053–8 Index

private equity funds 7, 103, 108, 112–14, 144, 153, 154–7, 185, 240 private equity houses and groups 4, 21, 31–3, 39, 43, 46, 74, 89, 99, 107–8, 107–17, 123, 129, 143–5, 153, 155–61, 167, 224, 226, 229, 249, 260–1, 264, 266 private equity partners 5–6, 21, 78, 80–1, 88–9, 103, 109, 119, 124–5, 144, 146, 156–8, 163, 195, 216, 240, 252, 264 problem companies 25, 27–8, 37, 54–5, 70, 79–80, 123, 147, 152, 169, 175–6, 178, 198, 213, 228–9, 270 Procter & Gamble 16, 82 property 5, 17, 66, 68, 71–3, 115, 121, 130, 165, 177, 192, 194, 221, 236, 248, 267 property management 19, 71, 163, 225, 236 Proskauer 113 public companies 31, 51, 55, 90, 119, 123, 125, 129, 136, 142, 143–52, 158–9, 162–4, 213, 234, 237, 240, 252, 260–1, 263–4 public concerns 3–4, 120, 122–3, 177, 200–1, 239, 251, 259 purchasing 17, 53 Qatar 55 quality committees 96, 116, 135, 208–9, 248 Quintiles Transnational Corporation 7, 29–37, 42, 53, 63, 93, 96–7, 107–8, 111–12, 114–116, 121, 125, 131, 135, 138–9, 141, 143–5, 151–4, 156–7, 163, 165, 167–8, 170, 173–4, 176, 178, 182, 188–94, 198–9, 206, 209, 211–12, 225, 231–2, 234, 236–7, 248, 249, 252, 256, 260–1, 266 Quintiles EMEA 31, 33–6, 190, 234

Ratcliff, John 33 Real Madrid 55 recycling business 68–9, 72, 115 regulation, see regulatory environment regulatory environment 4, 29, 43, 96, 100, 109–10, 113–14, 121–2, 126, 131, 143, 148, 150, 158, 160, 184, 186, 188, 193, 199–200, 202–3, 207, 213, 219, 239–40, 243, 251, 263–5 relationships, customer 80, 83, 93, 97, 102–3, 105–7, 122, 217 relationships, personal 8–9, 28, 31, 36, 44–6, 59–60, 80, 82, 96–7, 106–7, 125, 136, 138–9, 143, 153, 178, 222–3, 226–230, 232, 235, 238, 245, 250–1, 254, 260, 262, 265, 268 remuneration committees (Remcos) 55, 123, 129, 131–4, 137, 138, 141, 148, 201, 209, 212, 218, 221, 245–6 reputation, corporate 74, 76–7, 121–2, 168, 174, 196, 199, 202–3, 207, 223, 225, 244 reputation, personal 28, 233, 242, 244, 251, 254, 267, 269 research and development (R&D) 30, 79, 89, 93–7, 109, 111, 114–5, 151, 167, 237, 261 Research and Development Corporation 154 resignation 17, 25, 28, 228 resource allocation 19, 64, 130 responsibility, corporate 118–24, 128–9, 133–4, 138, 141–2, 151, 177, 193, 197, 200, 204, 205–7, 244, 258, 261–2, 264 responsibility, personal 1, 4, 9, 26, 28, 34, 43, 46, 88, 132, 145–6, 178, 215, 220, 232–3, 242, 246, 250, 253, 263, 267, 269 Richardson, David 68–71, 73

Copyrighted material – 978–1–137–48053–8

Index

risk management 7, 19, 115, 129, 134, 151, 170, 196–7, 201–4, 205–10, 262–3 risk strategy 52, 109–11, 157, 170–1, 173, 186, 196–211 risk types 201–4 risk, personal 200, 233, 254 Robb, Will 112 Robertson, Struan 71, 73 Romania 13 Rose, Sir Stuart 149 Rosyth 65, 67 Rothschild 96, 102, 163, 214, 217, 242, 249, 267 Rothschild Bioscience Unit 90 Royal Ahold 122, 147, 166 Russia 55–6, 65, 71, 149, 181 Ryoshoku 39, 40 Sadema 16 Safeway 16 Sainsbury’s 15–6, 99, 100, 105–7, 115, 248 Sarbanes-Oxley Act 148–9 Saudi Arabia 50 scandals 1–3, 31, 122–3, 196, 240, 254, 259 Scotland 64–5, 68 search consultants 5, 60, 69, 140, 211–12, 214, 221, 243–4, 247, 267 sector expertise 2, 4, 9, 21, 99, 114, 124, 134–5, 140–1, 164, 169, 173, 201, 215, 225–6, 243, 252, 266, 268, 270 selection 8, 19, 133, 214, 230–1, 238, 245, 247, 262, 264 selling a company 16–17, 39, 63, 81, 91, 97–8, 102–3, 106, 156–7, 158–9, 169, 176–77, 214, 217, 221 senior independent directors (SIDs) 6, 8, 39, 45, 51, 73, 116, 138, 192, 234, 239, 244, 253 separation between executives and independent directors 2, 5, 107,

28 7

Copyrighted material – 978–1–137–48053–8

126, 145–6, 153, 228, 236–8, 244, 262 Serious Fraud Office 200, 259 Shanghai 45 share price movements 16, 30–1, 33, 53, 91–2, 95, 135 shared information bias 138–9 shareholder activism 16, 46, 70, 123, 129, 132, 148–52, 162–4, 228, 252, 254, 259, 263–4 shareholder value 1, 16, 30, 33, 39, 61, 97–8, 120, 156, 175, 240, 244, 260–1, 263 shareholders 2, 6, 16–17, 26, 28, 36, 39, 43, 45, 70, 72, 93, 95, 97–8, 103, 108, 119–21, 123, 129, 132–4, 137, 142–52, 175–6, 218, 222, 226, 228, 238, 240, 245, 247, 250–5, 259, 263, 265, 271 Shell 59 Sherlock, Peter 17 Simon, Crispin 96, 129, 141, 167, 223, 227–8 Singapore 13, 47, 50, 56 Slaughter & May 119, 197, 213, 217–19, 241, 255–6 Sloan, Alfred P. 131 Slovakia 50 social cohesion 138 social loafing 138–9 Société Générale 199 South Africa 73, 75 South America 188 Southampton 67–8 Spain 13, 15, 50, 55, 56, 75, 211, 233 Spencer Stuart 136, 242, 267 spin-offs/spin-offs 38, 72, 107, 112, 143–4, 224, 230 St Petersburg 65, 163 Starkey, Tom 105 Steele, Murray 3 Stephens, Charles 103

Copyrighted material – 978–1–137–48053–8

28 8

Copyrighted material – 978–1–137–48053–8 Index

stock market 109, 144, 206, 214, 254, 259 strategic thinking 2, 19, 72, 93, 251–2 strategic tools 171–2 strategy 1, 7, 9, 10, 15, 19–20, 24, 27, 32–5, 42, 44, 48–9, 53–4, 62–4, 69–70, 72, 77, 80–2, 84, 86–8, 93–5, 101, 102–6, 108, 114–15, 119, 123, 127–9, 130, 137, 141, 146–7, 151, 156–7, 159–82, 185–9, 191, 203, 205–6, 208, 212, 216, 230–1, 235–7, 245–6, 248–9, 251–2, 258, 261, 263 Stratford, Peter 96 Straycat 105 succession planning 20, 137, 233, 250, 253 Suncoast 49, 52–3 supervisory boards 124, 240 supply chains 24, 38, 67, 71–2, 78, 96, 100–1, 105, 115, 130, 187–8, 192, 194, 202 SwissAir 122 SWOT 38, 41, 171 Sylvester, John 96 systems 19, 23, 34, 57, 61–2, 68, 74, 85, 101, 105, 115, 134, 149, 156, 175–6, 183–4, 189–91, 198, 203, 208, 210, 240 Szikora, Stephen 105 takeovers 69, 73, 163, 212, 214, 223, 248 Tata Group 174, 180, 194 tax avoidance 120, 122 TDG 17 team strengthening 26, 59, 72, 103, 114–15, 152, 156, 212, 247 teams, executive see executive teams technological change 49, 56–7, 126, 198–9, 265 Temasek 31, 107, 112–13 Terratest 55 terrorist attacks 82–4 Terumo 89

Tesco 16, 100, 185, 259 Thailand 149 Thatcher, Margaret 82, 88 Thomis, Jeff 33 Thompson, Sir Peter 10–12, 16–17 Tibbett & Britten 17–18, 39, 162, 169, 237 Tilbury 65–8, 71–2, 115, 162–3 Time Warner 175 TNT 38, 195 Tokyu Air Cargo 39 Toshiba 22 TPG 31, 107, 112–13, 115–16, 144 training 19, 22, 37, 57, 75, 85, 137, 162, 193, 208, 243, 245, 261, 264 trust 2, 59–60, 82, 106, 125–7, 196, 215, 217–18, 220–1, 223, 231, 235, 241, 259, 265 Tuckey, James 72–3 Tunnicliffe, Jonathan 112 U-POL Ltd 7, 73–82, 102, 115–16, 121, 125, 144–5, 154, 156–7, 160, 163, 165–7, 170, 174, 178, 182, 187, 198, 209, 212, 224–5, 229–30, 232, 249, 252, 260–1 UCC Ueshima Coffee 39, 40 Ukraine 50 Underhill, William 119, 217–18, 219, 256 unethical behaviour 120, 122, 196, 200 Unilever 14, 82 unitary boards 124, 162, 240 United Arab Emirates (UAE) 13, 50 Universities 4, 91, 241, 243, 259–60 University of Exeter 4, 10, 31 University of North Carolina 29 University of Reading 10 USA 1, 4–5, 13–14, 18, 24, 29, 45, 47, 53, 75, 77, 82, 89, 91, 96, 108–9, 114–15, 122, 124–5, 128, 132, 144–5, 147–51, 154, 158, 162–63, 165, 181–2, 187, 189, 195, 197, 199–200, 206, 239, 242, 249–50, 259, 262, 267

Copyrighted material – 978–1–137–48053–8

Index

Vallance, Peter 152 Vallis, Peter 56–7, 61 valuation of companies 97–8, 108, 158, 163, 204, 211, 216, 221, 245, 248 Vantec Corporation 7, 37–46, 52, 99, 102, 115–16, 121, 125, 143–4, 154, 156–9, 163, 167, 177, 182–3, 195–6, 198, 212, 224–5, 229, 231, 249, 252, 261–2 Vaughan, Ron 21 venture capital 108–9, 154–5, 159 Vietnam 50 Vincent, Stuart 214, 217, 219–20, 242, 267, 269–70 vision 4, 16, 102, 153, 159, 166, 193, 246, 250, 256 visits to companies 53, 194, 228, 268, 271 Volkswagen 188

28 9

Copyrighted material – 978–1–137–48053–8

Waine, Peter 50, 140–41, 178, 235, 257 Wal-Mart 152 Walmsley, Alastair 3 Washington 47 Watson, James 17 Way, Raymond 24, 26, 251 Webster, Martin 242 Wellingborough 74, 80 Welsh, Chris 59–61, 210, 223, 226–7, 229, 238, 241 West, Mike 47, 51, 53, 228, 237 Wilson, Patrick 22, 24–5, 26, 28, 239, 256 Wilson, Richard 243 Winstanley, Derek 33 Wood, John 153 Wooten, Ron 111–14, 223 WorldCom 147, 199 Yamada Toshi

44, 46, 195, 229