by Patrick Dunne
Kogan Page pounds 19.99
There can be no greater change in any manager's career than when he or she first joins a publicly accountable board. It is fair to say that this step is, for many, a visible sign of achievement, and I have long wondered at the value so many place on the designation 'company director'.
For the professional manager it signifies the emergence from the chrysalis of management to the butterfly world of the businessman.
Unfortunately, the title is all too seldom accompanied by any formal initiation, training or preparation for carrying out a job of almost unbelievable subtlety and complexity. Moreover, it is a job that carries immense legal and personal responsibilities. Few neophytes are even vouchsafed a proper legal briefing on the tasks involved, or the penalties that can be incurred for carelessness or errors. Indeed, the readiness to accept directorships, especially non-executive directorships, has always amazed me, particularly when the risk-reward ratio is so negatively balanced.
Not only is there little preparation but, except for rather legalistic manuals, there is little literature that describes what it is like to be a director and gives practical advice on how one should go about it.
In part, this is because few of us have extensive experience of the operations of more than one board and, apart from the legally proscribed parts of board work, there is no generally accepted pattern of board operation.
For most of us it is easier to think of boards whose work is poorly organised and ineffectual than to think of shining examples of effective, directed team effort.
Business failure tends to start at the top and a programme to rectify this failure can only be led by the board. Yet how many boards set themselves a defined programme of work and annual objectives? How many regularly review their procedural effectiveness and work patterns?
We are lucky that, with his new book Directors' Dilemmas, Patrick Dunne of 3i has made a major contribution to the thinking director's education.
Not only is 3i the largest venture capital organisation in Europe, with a vast background of experience over many years, it is also one of the most professional in its approach and its integrity. It has a background of research into board behaviour that has shed light into a lot of murky corners.
This book could only have been written from such a background. The ring of practical truth shines through the dilemmas chosen and each of us will recognise a number of them. The sad fact is that most such dilemmas are thought of by those involved as unique to their company, and each of us laboriously reinvents the wheel (not always in the round configuration) to solve the problem.
Apart from our legal advisers, and sometimes our auditors, we rely on our own judgment and experience. But even the oldest and most experienced could not hope to match 3i's portfolio. Not only are the dilemmas recognisable and well described but each is accompanied by a DIY guide as to how to approach the problem and a description of the ultimate action taken by those landed with it.
I have served on a fair number of boards and have learnt from each, but I dearly wish I had read this book 35 years ago. The advice, as well as having been derived from a wealth of observation of boards in and out of trouble, is also practical and pertinent. For example, the admonition carefully to examine how far you want to be involved and how much of your time you can spare is one I have consistently failed to heed. The advice to be clear where your mandate to intervene comes from is one most of us are aware of but do not always check out with the thoroughness it deserves.
I recommend this book to all those who are, or want to become, directors.
It is highly readable and highly practical, by a writer who has been there and done it. If it helps to improve the performance of our boards it is worth its weight in gold. If we are to improve the competitive performance of the UK the starting point has to be to improve the professionalism and effectiveness of our directors and our boards.
Sir John Harvey-Jones was chairman of ICI 1982-87.