NON-EXECUTIVE DIRECTORS - Fifty-five ways to end up in prison
The attractions of being a non-executive director fail to impress AnnBaldwin.
The attractions of being a non-executive director fail to impress AnnBaldwin.
The invitation came last week. So flattering to a woman of my age.
I was immediately tempted to say yes. I might never be asked again and I’d always wonder – what would it have been like? Would I have been any good?
Then, of course, there was the money. Thousands of pounds for a few days’ work. If I really got the hang of it, there is no limit to what people might pay for my services.
Status was another consideration. The role sounded grander than ‘management trainer’. It would have been a defence to the taunts of those who say that those who can’t do teach. I definitely shouldn’t shrug off the offer without giving it more thought.
The right experience
I have a great deal of experience. You don’t survive 27 years in partnerships without a deep understanding of business relationships and the skills required to win points and protect your rear. All those years I spent as a business adviser mean there’s very little that can go wrong that I haven’t seen; how to prevent it is always the difficult part.
I wasn’t so sure about working in an office. I thought I’d escaped. Did I really want to be boxed in again, worrying about the air conditioning and plagued by doubts about whether I have enough windows or a large enough desk, while in the background colleagues swear at the failing photocopier?
Even if I could help, people rarely take advice. I once asked a client who lost his business: ‘Why didn’t you listen to me when I said you must not borrow any more money?’ He replied: ‘Because I’d never seen a recession.
I always thought everything went up and you were being overcautious.’ So what use are advisers if business people have to learn each lesson by experience before they understand?
Could I really contribute? If I had wandered in to the monthly meeting at Barings would I have spotted, in the mound of reports, the millions of pounds being sent to Singapore? Might I have raised questions about why our man was doing so much better than everyone else or would I have had the courage to ask what exactly a derivative was? Or would I have been too busy counting my bonuses? Could I really be independent?
What would happen if I demanded more information? It would be presented in a way to suit the case being made – and by the truckload. I’d have to spend my free time trying to track down all the facts and eventually end up with a reward rate well below the minimum wage we keep hearing about.
Did I want a job with a negative in the title? Non-executive director.
Non-effective. Nonentity. If executive means taking responsibility and carrying out actions, does non-executive mean doing nothing at all? Should I just take the money and run – no stroll – running is too undignified for a member of the board.
Then I remembered that there’s no ‘non-executive’ in company law. Wasn’t there a case recently when the non-executive director was held responsible for some illegal inter-company transfers of which he was not aware and ended up disqualified.
Criminal offences
I picked up the book review about directors’ responsibilities sitting in my in-tray. It was terrifying. It listed 55 criminal offences for which directors may be convicted. Fifty-five.
Only last month there was the suggestion that directors might face major claims if their companies became insolvent for failing to deal with the Year 2000 computer problems. I could be innocently flicking through the financial reports, checking to see how much I was being paid that month, when whoosh, the whole company comes to a halt as all its systems crash – and I’m asked to empty my pockets and my bank accounts.
Responsibility is all very well when you know what’s going on. But so much could happen in my absence. Even when I was a full-time executive, it was an amazing day if I knew a fraction of what was happening. No, I couldn’t accept.
I’ll stick to training. It’s much more clear cut. What’s the problem?
How can I help? What outcome are we looking for? Here’s the limit of my responsibilities and here’s my invoice.
Pity though – ‘fat cat’ has a certain ring to it.
Ann Baldwin FCA is a management trainer and conference speaker.