In this business growth show Alistair Brew discusses the financial industry supporting entrepreneurial businesses.

Business growth show - Finance support for entrepreneurs

There’s absolutely no shortage of entrepreneurial talent in the UK, lots of fantastic ideas, I think it’s been about those, those ideas, those businesses now being picked up by the financial community and supported on the journey through its the different levels of expansion.  It’s taking, I think it’s getting better and people are more joined-up and hopefully we can support some businesses from the very early stage right through to the giants.  The Americans have traditionally done this very well, we want to be able to do that in the UK as well now.

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Good governance means having great people at the top looking out for the company. But how much should a company pay for a good director? In this TV show Caroline Newsholme discusses pay vs performance.

Good governance comes at a price

You should certainly pay for talent.  And good directors come at a price.  But there’s a feeling that directors remuneration is slightly out of kilter with the real world.  It’s certainly being increasing, notwithstanding the fact that we are in a recession, there’s been a quite substantial upwards trend

And obviously a lot of companies have struggled and may not have performed as well.  So there there’s an inconsistency between actually the wellbeing of the company and what the directors are being paid.

But I think certainly directors are alive to the concerns that have been voiced by investors and the business world generally.  I don’t think they are blasé about the position, they recognise that there has to be a proper link between pay and performance and we can’t continue to see excess packages which are not really justified.  Whether we’ll get change at the rate we need change is another question.

But there’s a lot of impetus in the corporate world to increase transparency and to change what’s gone before.

If you are interested in discussions around good governance take a look at our briefings on director's remuneration and board effectiveness.

 

Corporate governance issues arising from boardroom structure includes how much each member should be paid for what they are expected to do, as Rob Wirszycz discusses in this TV show.

Corporate governance issues - Defining roles

Remuneration is a really sticky area in a sense.  Actually, if I’m a Non-Executive Director I don’t expect to own any shares.  My belief is that a Non-Executive Director is there to be completely objective.  And I’ve been in many Board meetings where effectively the Board meeting is a meeting of the shareholders.  Self-interest always wins in those meetings.  So if I’m a Non-Executive Director in a meeting and I’m there, my job, I’ll accept a retain, a relatively small retainer, depending on what they want me to do.  If they do anything away, outside of the brief, my belief is that that should be paid for separately.  But so just to be a Non-Executive Director, I would like to be paid for the very clear, clearly-defined, but I don’t want, expect any shares. As a Chairman it’s different.  Now the Chairman, I’m acting on behalf of the shareholders, so I actually have to have alignment with them, so what I always ask for when I’m Chairman is again a retainer, which is a small amount of money, relatively small amount of money, but I want to be able to earn shares based on the achievement of the plan.  So if we achieve the plan, which I’m owning, then I believe that I should be aligned with the shareholders’ interests and I should be able to earn in shares into the business.

If you are interested corporate governance issues take a look at our briefings on director's remuneration and board effectiveness.

 

Dynamic boards are now using expertise form generation y to inform their business development. In this TV show Peter Klauber discusses this change.

Modern thinking in dynamic boards

I think Y generation has a lot to answer for. I think it is fantastic. Ideas come from everywhere in an organisation not just the board. I think most switched on companies will enable everyone to add some opinion to the process of business development. We now have very dynamic boards with all ages, looking for expertise to help and there's no fear in using it.

If you want to hear more about dynamic boards, the role of directors and generation Y, keep browsing Inside Finance TV.

Business strategy development is the job of the board. In this TV show Rob Wirszycz discusses how they can get these decisions right.

Deciding on strategy development

Boards, I believe, are where decisions are made.  And, you know, while you want the Chief Executive and their team to make other decisions, you know, ask forgiveness rather than permission sometimes, but the decisions are in my view, what I call an irrevocable allocation of resources. So, if we make a decision at a Board, we don’t go back and relitigate, unless the facts materially change.  I mean I think there’s a quote from John Maynard-Kings, who sort of said, you know, “when the facts change I change my opinion” and that’s the truth, you know, you shouldn’t hold on to something when the facts are materially different.  But the Board makes those irrevocable decisions, they write them down, everybody has to agree, so you can’t come out of a Board meeting saying “Well, I know they said that then but I’m doing this”.  Decisions are really important in Boards, and that’s the role of the Non-Executives, be they Directors or Chairmen, is to ensure that the decision is taken in a proper context and it’s not because “We would think that way because we’re all in our 40s and 50s and male”.

Keep browsing Inside Finance TV for more expert insight into strategy development processes. Why not watch the full briefing From the top - Being an effective board director

Business disruption from absence is bigger than may leaders realise. In this TV show Matthew Haswell answers the question - Do business owners understand the cost of absence?

Awareness of business disruption

I don’t think they do, I mean that’s a broad brush answer, I don’t think they do because sickness absence costs, although in a couple of years, in the last year they have actually gone down slightly but as an overall cost it’s still pretty huge for UK industry particularly, well the private sector most research is done on. Now health and wellbeing and employee engagement and connection and holistic approaches to health and wellbeing is a subject that a lot of people, particularly HR consider, whether HR directors consider it from a cost perspective only or they actually think about holistic products is another question. I think what we’d like to do is encourage finance and HR to look at the question of sickness absence together and come up with a strategy to actually minimise the impact. It’s very difficult to get a finance director to sign off on a request from HR when the finance director can’t actually see why putting these procedures in place or even purchasing insurance or the health related products can actually help matters.

Inside Finance will continue bring you expert insight in to business disruption and related topics.

Business disruption can come from government legislative changes. In this TV show Pamela Sayers explains the impact of the Finance Bill 2014.

Finance Bill causes business distruption

The reaction I’m seeing at the moment is that partnerships, LLPs, are now waking up to the fact that this is going to affect them. Interestingly, we undertook a survey in the summer and of the respondents, of which there was just over 100, only half the respondents thought that the Partnership Consultation Document would affect them. I suspect if we asked the same question now it would be 100%. they have left firms with so little time to put their affairs and consider the quite stringent conditions to put things in place by 6th April. In fact one of the representations that we will be making is that actually all of this legislation should be deferred by 12 months. What we have is some draft proposals for the 2014 Finance Bill with some guidance notes attached. The guidance notes lack so much clarity that what we’re expecting, perhaps at the end of February, beginning of March, is much more detailed guidance, but I suspect that is still going to leave a lot of unanswered questions. Browse all TV shows on Inside Finance for more expert discussion on business disruption factors.  

Most good Board meetings, the preparation is done for a couple of days beforehand.  You make calls and you find out, you know, what’s on the agenda, so you should receive the agenda at least two days beforehand, you should be able to have read the pack as soon as you get it and you should get on the phone to ask questions if you don’t understand stuff.  I’ve seen too many people actually read Board packs actually in the meeting and then the meeting becomes a boring sort of thing of people literally reading and catching up.  So that to me is inexcusable. But in terms of new sort o, so the thing is about preparation, you’ve got to be prepped, so you’ve got to know your stuff, you should know your numbers, you should have your questions ready.