BOOK REVIEW / The blueprint for a better director: Creating excellence in the boardroom - Colin-Coulson Thomas (McGraw-Hill, pounds 24.95)

Click to follow
The Independent Online
The failings of boards of directors often hit the headlines. Whenever a corporate collapse is reported, the same old questions are asked: 'why were the directors so blind?'; 'how could they have been caught out so badly?'; and, increasingly frequently, 'how did such fraud go undetected?'. Recent scandals, such as BCCI, Polly Peck, Maxwell and Queens Moat, have presented a picture of almost unbelievable directorial failings.

If the first three are dismissed as special cases of fraud, it appears that Queens Moat cannot be. It is even more worrying for those who are concerned about the competence of directors of ordinary companies. So a book that aims to improve the performance of company boards is certainly timely.

The competitive challenges now confronting companies mean that boards as well as managers have to become more professional. Key elements are the selection and development of directors and the evaluation of board performance.

In Creating Excellence in the Boardroom Colin Coulson-Thomas devotes individual chapters to each of these topics.

A good director, chairmen report, is hard to find. This reflects the narrow group from which they are traditionally sought. To be considered a safe bet as a director you have to be one already - directorial experience was the criterion most commonly cited in the author's survey of what chairmen look for in board members.

This, as he points out, makes it even harder for women, with the necessary qualifications, to break into the 'boardroom circuit'.

One way of dealing with the shortage of directors is to widen the field for recruitment. Women and foreigners are almost untapped sources. Another, he suggests, is those below top management who could be considered as internal directors since they would bring the board closer to the realities of the business.

The presence of at least a token woman may increasingly be considered desirable, but an acceptance of a doctorate as a qualification seems most unlikely. In the survey, no one mentioned academic or professional qualifications as desirable. What a contrast to Germany, where in 1985 more than half the directors of the largest companies had doctorates.

Boards are all different, so a director who performs well in one may not do so in another. This is one of Mr Coulson-Thomas's most important themes.

The composition of the board is consequently vital, and in selecting a new member attention needs to be paid to the balance of existing characteristics of personality as well as background.

To help, Mr Coulson-Thomas provides a three-page list of directorial competences. These range from Olympian qualities such as wisdom, independence, morality, tenacity, decisiveness, courage, realism and sensitivity to more mundane attributes such as understanding the business and market environment.

If this heroic selection suggests an unlikely combination, some virtues can be left to others. The difference between a director and a manager is pointed out: 'A director needs to be level-headed and dispassionate' but 'A manager has to exude enthusiasm and commitment'.

The qualities that make for a good director may well be different from those that make a good manager. Mr Coulson-Thomas argues that a career as a company director should be regarded as distinct from that of a manager.

He also places great emphasis on the importance of director development. Usually little, if anything, is done to induct new members and help all members review their effectiveness and learn to work together more successfully.

So how to turn the fat cats into fit cats? His apparent ideal would be for the chairman to start by analysing the effectiveness of the board, with the help of the checklists he provides, and then produce a plan of development.

Individual directors may need highly tailored programmes and the board as a whole should review its effectiveness and improve the ways that it works together.

The book is best seen as a series of questions that chairmen should ask themselves about their board, with suggestions for some of the answers.

Chairmen or directors who want to know quickly whether they will find the book helpful can skim the six-page appendix, which summarises the issues that could be examined.

The underlying message that boards can and must improve is the right diagnosis for boardroom ills. Too many boards, he says, deal in generalisation and waffle. Good boards don't just happen.

Phrases like 'creating excellence' normally set alarm bells ringing. They generally signify a born-again sales pitch. But Mr Coulson-Thomas's approach could not be more different from the holy roller enthusiasm of most management gurus.

What his book offers is a lot of nitty-gritty advice about the management of boards. It will appeal to those who like lengthy checklists and reports or surveys. Its model is the laundry list and cookery book rather than the hyped guide to managerial fashion or the academic text. Those who like plain fare with little variety will approve of his recipes.

Mr Coulson-Thomas obviously approves of himself as an ingredient. More than one and a half pages of the bibliography consist of self references.