Business Leaders Series – Stephen Bolton
Stephen Bolton enjoyed a hugely successful executive career that included 24 years with Unilever and 13 years with Diageo, the last 8 of which as Group Controller of the worlds largest producer of spirits.
He is now enjoying a burgeoning career as a Non Executive Director with Clarks, the world’s largest casual and smart shoe company and the fourth largest footwear company on the planet and Sedex, a global membership organisation dedicated to driving ethical and sustainable improvements in global supply chains, where he also Chairs the Remuneration Committee.
Since January 2016 he has been a Non Executive Board Member at Southampton Solent University and is a Member of the Board Of Trustees of Founders for Schools, whose mission is to inspire students and prepare them for the rapidly changing world of work.
In the latest of the Business Leaders series, Stephen shares his experience and imparts invaluable advice for anyone thinking of developing a career as a Non Exec.
What was it about developing a plural career that appealed to you?
Having completed my executive career at both Diageo and Unilever, I wanted to continue to be active in the Business world but also to give myself more free time, to have a much more balanced life than had previously been the case.
I felt a portfolio career was the ideal way to transition from full on 24 / 7 to an experience that would keep engaging my brain, ensure I remained involved in business, which I love, but that would ultimately give me the spare time to enjoy those pursuits outside the workplace that had taken something of a back seat in the past.
I also felt there was a real opportunity for those businesses, who perhaps weren’t as established or evolved or indeed of the size and scale of Diageo, to benefit from the experience I had enjoyed.
Has it proved what you imagined it was going to be?
Very much so. I am thoroughly enjoying what I am doing, I have managed to sustain my level of engagement whilst at the same time I now have the time to engage in those pursuits that I am passionate about, namely travel, cars and golf.
How have you found the transition from executive to non – executive?
I have been thinking about making this switch for probably the last five to ten years, during which time I have been closely observing how the very best and indeed the very worst NED’s behave.
As an executive you get a sense of what a good and bad NED is and does. The least effective have a tendency to behave as if they were still an Executive and as a result will continue to try and run the company. Having been an Exec for 37 years, it is certainly true that you have to constantly remind yourself you are no longer in that seat. At the extreme end of the scale there are those who will barely even read the papers that are prepared for them.
The NED’s I have most admired and try to emulate are those who selectively intervene and bring their wealth of experience to provide both coaching to the board and a conscience to the business.
I have also made a conscious decision to pursue NED roles with those organisations with whom I have a real affinity, that I have a natural interest in, where I understand the business model, it’s complexities, challenges and opportunities.
For example, joining Clarks, ticks so many boxes for me, the brand is strong and has a great heritage, the product is tangible, the values are exemplary and there is a true sense of pride that exists amongst the employees. That for me is why Clarks was an obvious choice to be part of my portfolio. In much the same way as being passionate about the business is key to your executive success, it’s also in my view a key component to a successful portfolio career.
What in your opinion are the key attributes of a successful Non – Executive Director?
I’d start by saying being able to strike the balance between challenge and support. I think someone who brings a broad range of experience to the table, who understands governance and the role and responsibilities of a Director. The ability to coach Executives in the business is an essential skill. I also believe as a NED you must be prepared to invest the time to really get to understand the business, be passionate about the business and the people working in it.
It is also crucially important that you are able to retain your independence, that you have the strength of character to walk away in the event that anything should occur of which you are deeply uncomfortable. That is your ultimate sanction as a NED. Whilst you would hope never to have to resign, having the ability to do so is critical to retaining that independence. You must be prepared to stand up for what you believe in.
What are the biggest challenges facing the NED?
The increasing governance and legislative challenges are significant. All organisations, public or private, are under huge scrutiny from regulatory bodies whether that be in the UK or globally. Making sure that you, as the NED, are comfortable you have the right processes, the right checks and balances in the organisation in order that you can respond to that regulatory scrutiny is critical. Whether GDPR, IS Security, the Bribery Act, you must as the NED understand what this legislation means for the business and ensure the business is best prepared to deal with those issues.
The incredible pace of business change also creates significant challenges for the NED, in particular the impact of digital transformation disrupting and in many cases changing business models. Making sure the business is well prepared for what can be huge changes in the landscape is an incumbent feature of the responsibility.
You need to ensure you understand the business well enough to know when things are not right, in terms of the performance of the organisation, the culture and behaviours, you have to be able to understand that well enough to be comfortable the business is in good shape.
Lastly, remuneration, a feature that is incredibly topical in the current climate. In the past, perhaps Chair of the Remuneration Committee was one of the better seats on the board, now it’s arguably one of the toughest in terms of dealing with shareholder and public reaction to Executive pay.
Who have been the NED’s you have worked in your executive career have you most admired and why?
There are few features of the NEDS with whom I have worked, much of which I have already covered here, that would lead me to consider them to really stand out. In summary that they would be the ability to provide challenge and support in equal measure, broad business understanding, timely and selective intervention and a clear understanding of the role of a NED. But as important for me is those who have had a genuine passion for the business they represent. They have invested enough time in really getting to understand the business. You really should be looking to take on such a responsibility because it excites you. If you are looking to engage in a NED simply for the money then I would argue you are unlikely to deliver the value the business really needs.
With the level of engagement required of you to truly succeed as a NED, how do you ensure that you can switch off and enjoy the free time that you described earlier that was very much part of what you were looking to achieve?
You have to be committed enough to do the right thing by the organisation, but you have to give the space to the executive to run the organisation. That is the biggest transition for the executive who has held that level of responsibility for any length of time and therefore knows the 24/7 nature of it. You have to be able to strike that balance and that isn’t easy, particularly to start with. You need to ensure you have the right people around you who are prepared to tell you when you have gone too far, that you are too involved and you may need to take a step back.
The reason you can balance much better as a NED is because the immediacy of decision making is by and large much slower. They tend to be decisions that are by definition of a longer term nature, they are not the day to day operational decisions required to run the business. There will be times when there is something going on the business, perhaps for example an acquisition, which requires of you to have a more immediate involvement. However generally your involvement is over a longer time horizon which does allow you to balance a lot better than if you are in an Executive role whereby often times immediacy of action is critical.
What advice would you give to anyone thinking about developing a NED portfolio?
Be clear about what you want to achieve and how much time you want to commit. Secondly, make sure you don’t rush in and take the first opportunity that comes along. Very often it can take time to move this forward, so be prepared to take the time to make sure you get it right for you. It takes patience! Don’t be inclined to take the first thing that comes along just simply because you sense it might get you a foot on the ladder. You need to exercise sound judgement in ensuring that the first step you take is the right one. Choose the companies you are genuinely interested in and passionate about and build your network around those companies. That network will be a critical part of landing the right NED.
If you are not on a board already but you are wanting to pursue a NED career, give some consideration to taking on a Charity, Government or Education based advisory role can be of real value. If not directly a commercial entity, you still gain a lot of the experience of operating as a NED at a board table. A number of years ago I got involved on the board of Southampton Solent University, where I am just about to become Vice Chair. That has been great experience and as someone with a commercial background I have been able to provide significant insight and value to what is essentially a very large business.
I cannot over-emphasise enough just how crucial a part your own network will have to play in ensuring your success in developing your NED portfolio. Whilst the level of rigor applied to the recruitment process is extremely robust, having a strong network who can refer and recommend you to a Chair or search firm handling the shortlisting is essential. Think of not only those with whom you have worked, but also in the wider advisory community who may have clients who could benefit from your expertise – perhaps your Audit or Tax Partner, your Corporate Lawyer or Banker or Investment Director within Private Equity. It’s probably the person who might consider least likely who ends up being the person who opens a door to you when you least expect it, so cast your net wide.
Last but by no means least, I would certainly recommend investing time in really getting to understand the roles and responsibilities of a NED, learning the code, best practice, perhaps investing in an Institute of Directors course for example, to make sure you are in a position where you understand your legal requirements and obligations. This is a great way of preparing you for an portfolio career.