Corporate Governance: N is for Nerve, NEDs


To the enchanted world of NEDs, you are welcome.

This role may not be the proverbial ‘walk in the park’, as much as a meandering journey that engages your senses.

It is also a journey you are best prepared for.

As a NED, be prepared for unexpected events, risks, new challenges, bends in the road and opportunities that need careful evaluation. Even the board agenda will have to be carefully crafted. You will need to adopt an inventive approach and be prepared to go the extra mile.

Let not the word non-executive mislead you, there is work to be done. As a NED, you are not responsible for day-to-day decision making or operational aspects of the business. Yet, you are very much responsible for directing the affairs of a company and leading it to success. As Larry Putterman puts it, ‘fingers out, eyes in’ principal; essentially reminding NEDs that their job is not to run the company but to set policy, appoint and manage the executive team.

The legal duties, responsibilities and liabilities for NEDs remain the same as those of the Executive directors. EDs and NEDs both have a fiduciary duty to the company/ shareholders and must act in their best interests.

Unmistakably, primary role of the non-exec is strategic. NEDs will need to provide constructive challenge, effective guidance and strategic direction to the management team. They will need to be aware of industry trends and board room themes, identify emerging trends and risks within the organisation, scrutinise management plans & performance, ensure appropriate metrics and risk measures are in place and that information on all aspects is adequately and transparently shared.

A vibrant, responsible board is important. With the right blend of energies and trust between the NEDs, the CEO, chair and other board members, there is no telling how far the organisation may go.

As you learn new skills, get insights into new industries, network and build relationships, you’re also making significant contributions and participating in an evolving organisational saga. You just might find yourself signposted in history, as a figure of excellence and a shining board room warrior.

As a trustee for charitable institutions, I have certainly found myself very fulfilled with the content of my role and have been able to enthusiastically engaged in constructive dialogue to build a future. Please remember, how you adapt to this role and make it work for you is completely up to you. As a NED, you will determine your own and the organisations success. Ultimately each NED forges an individual path.

This can turn out to one of the more rewarding and meaningful career paths for you; with a few careful actions from you. Organisations are looking for diverse, highly motivated board members who’re able to add value to the organisation and bring a great deal of personal integrity into the mix.

Here are a few tips for new / existing NEDs

  • Make sure you understand your motivation for wanting to be a NED and what you hope to achieve with the role. This will help to in weighing up opportunities and create a playbook for your role in the board room.
  • You might like to know the kind of industry or sector you would like to be involved in. These may be based on where your interests and /or experience lie. Even within the non profit domain, there is a lot to choose from: healthcare, education, design, housing, research etc.
  • Be prepared, as you embark on this journey. When you apply for new roles, do the research on the organisation and what skills the board needs at that point in time. This can help you in better presenting your candidature; highlighting specific skills and relevant experience when applying. Research, talk to existing board members, review the accounts and ask plenty of questions. Are there any on-going concerns that you need to know about?

Paul Munden of the IoD, UK recommends that you speak to the chairman of the board before you apply to a role so as to get a better understanding of the risks and  issues the board faces. This can enrich discussions and help you highlight specific items that you bring to the board.

  • Once you’re on the board, you would need to get an understanding of the organisation, its culture and its current realities. It makes sense to ask for minutes of past meetings, 3 year financials, articles and memorandum, audit reports, history of banking relationship, health and safety reports, shareholder agreement, insurances, service contracts of executive board.
  • Be prepared to demonstrate a high level of personal integrity, strong values and ethics.
  • As you go about board meetings, be prepared with your questions and keep your critical thinking handy. It will go a long way in delivering on your ‘duty of care’.
  • You may also like to invest time outside of board meetings to get a sense of what is going on within the organisation.
  • When you are in board meetings, don’t just focus on subjects that you feel comfortable with, such as finance. You need to be able to take a broad view of the company’s strategy and be willing to contribute to the debate in areas such as sales and marketing, HR and technology, as well as on financial matters.
  • At the same time, put your professional background to good use. Wear your financial hat and don’t be afraid to look at the organisation through a fresh pair of eyes.

As the nuances of corporate governance evolve, the role of the board, purpose of the organisation and its relationships with the wider stakeholder group are all under the microscope.

  • Independence is an important aspect of this role. ‘Independence from management’, is important so as to ensure you’re doing justice to this fiduciary role. You will need to complement and challenge the management team by providing an independent view of the issues that the organisation faces.
  • If you believe the board is doing something unethical, or there is a conflict of interest situation, you must be prepared to address it.
  • Invest in professional indemnity insurance so that you are covered in the event your company is subject to a joint and several liability legal claim.
  • New NEDs may benefit from raising their profile by speaking at industry events, business associations meetings, publishing / contributing to blogs.

Aptly summed-up by the Risk & Compliance journal, ‘the business environment is rapidly changing, and companies that continually innovate, stay ahead of the risk of disruption and take advantage of strategic risk—and the opportunities they can signal—may lead the way.’

As you set out as a NED, remind yourself of the virtues of being bold, deploy your creativity, be prepared to tell the truth and always keep your nerve.

© Anu Maakan 2018

(Disclaimer: all views published here are the personal views of the author and do not represent those of any organisation).


21Point Board Evaluation

governance_jigsawDo you have an effective board that enables success? Do you know your board workings are geared in the right direction?

Do you have the tools to assess your board?

It is often seen that if we can’t measure things, we can’t achieve them.  

In order to assist with board level assessments, we have launched a 21 point check to help you evaluate and improve your board.

Here is a sampling of some of the aspects included in the check:

  • Does your board have a common understanding of the mission?
  • Is the board involved in shaping strategic plans and in monitoring results?
  • Do board members have a view on CEO succession?
  • Is the board getting feedback from key stakeholders….?

As part of this exercise, we will arrive at a score for current level of board effectiveness and identify actions to improve board performance and its dynamics.

Sign up to work with us through the 21pointboardcheck.  

Email us on  or call us on 0044 77747 62838 for a free initial consultation.

Corporate governance: Of Cyber attacks, fateful drills and resourceful enemies


America has installed Trump as president, the UK has voted itself out of the EU, North Korea is testing nuclear launch capabilities, Elon Musk plans to colonise Mars and the NHS is amongst the latest victims of a large scale cyber attack.

None of this is a routine drill, none of it is imaginary. They are as real as the arctic wind in London, Googles’ search capability and the fall of the Greek empire.

Once immune, I can now feel the tremors from an earthquake in another land, the fear and heat from the bombings in Syria and visualise the power of information in the wrong hands. This is now more than mismanagement, bigger than negligence, worse than ignorance and definitely unacceptable.

But why do I care? Why has this prompted me to vocalise my indignation? Why can’t I simply ascribe this to ‘large- scale governance failure’, indulge in cynical finger waggin’, deliver the final ‘this was coming’ verdict and get away from it all?

Simply because, this time, I can feel the peril. My own vulnerability seems to tango to disconcerting music; flirt with the sorcerer and look me straight in the eye. The issue has now fallen out of the NHS board room, parliamentary debates and lies at my front door. Awaiting action!

I need to address this ….  as a citizen, as a taxpayer and as a fellow human. For who is to say that these attacks won’t be more serious next time and my personal security would not be affected. The size of the problem seems to grow. Friday’s cyber-attack affected more than 200,000 victims in 150 countries, as per Europol chief Rob Wainwright. He also said that another attack may be imminent.

As I look for additional clues, I discover that the weakness in NHS cyber security is a documented matter and was listed as one of the 3 principle risk facing the NHS in the security review, as per Defence Secretary Michael Fallon, in this interview. The report also states Labour leader Jeremy Corbyn, saying that an annual £5.5m deal with Microsoft to protect NHS devices has not been renewed since 2014.

Why has cyber security not been addressed at the NHS? Why has weak infrastructure not been upgraded? Why has this issue been allowed to linger when the threats were well-understood.

As per reports, 48 NHS trusts reported problems at hospitals in England; while 13 NHS organisations in Scotland were affected. Hospital trusts were repeatedly warned about cyber threats before the attack on computer systems on Friday, Defence Secretary Michael Fallon has said. He told said that the NHS was given “a large chunk” of money to improve its security.

Labour leader Jeremy Corbyn said on Saturday that an annual £5.5m deal with Microsoft to protect NHS devices had been renewed in 2014 but not since.

Surely, issues abound and need to be addressed. Our voices need to be heard, because we are at risk when institutions such as the NHS are taken down. We need to ask more questions, demand an explanation and expect a resolution. Corporate governance needs a prod here.

Isolation is now a myth. We are all now connected, for better or for worse and need to bear the consequences for a breach, such as this.

And the proof of the pudding lies in the fact the saviour was a fellow blogger, plugged into the world wide web while on holiday. He chanced upon the ‘disarm’ button on the malware and saved the day.

© Anu Maakan 2017

(Disclaimer: all views published here are the personal views of the author and do not represent those of any organization).

Organisational Governance: Nonprofit boards – Mean machines or Tactical crowbars


As I exhaled a lungful of corporate stiffness and took in the soothing vibes from the nonprofit world, a sense of wellbeing arose from within. I could sense more freedom; and the possibility of varied notes emanating from my core. I was now in the realm of do-gooders and philanthropists.

The new life beckoned and I got started. I asked for the governing document, financials, budgets, list of trustees. However, what precise role was I to play?

  • Watch from the sidelines?
  • Be a cheerleader?
  • Jump in head first and ask a lot of questions?
  • Drill into spending patterns? Or Revenues?
  • Focus on specific issues?
  • Raise funds or enable fund raising?
  • Review past performance patterns or peer into the future?
  • Play a strategic role or get a grip on the day-to-day?

It was important I find answers to these questions, to be meaningfully engaged. I started to explore and understand the intricacies of this big new world ‘with a socially conscious heart and soul’.

I found that multiple challenges exist for non-profits.  Starting with the resource crunch of the recessionary era, new technology, shifting trends in fund-raising, rise of social media, new regulation, insufficient financial incentive, outdated board practices, inability to measure outcomes, the rising threat of cyber-attacks, effective engagement with shareholders: in short there is enough to grab the attention of a new trustee.  Trustees are not always able to grasp the magnitude of the issues facing the executive team.

In my opinion, it is important to have a financially savvy board that contributes positively to financial and operating strategy. To take an example, in order to evaluate competing requests for funding or grants, a charity would also need to understand which of the options aligns best with its future course / strategic direction. Fund raising being at the heart of all non-profits, they should be able to measure the return on investment for the various fundraising options: finance and strategy are ultimately inextricably linked. Donors and shareholders are also beginning to ask for greater transparency into the way funds are spent; furthering the call to action.

“Boards need to be engaged with the major strategic options and must measure outcomes,” says Alnoor Ebrahim, in an interview with Forbes, ‘…….If we’re ever going to solve the most difficult problems facing our society, we need non-profit boards to be relentless in pushing their organizations to measure their progress, to be honest about failures, and to learn from them.’

CEOs of non-profits today also vocalise their need for an engaged, enlightened board that they can partner with. Non-profit boards often do not have a good understanding of the ever growing challenges facing them. “It is imperative non-profit organisations scale up to meet the current dynamics,” echoes Geoffrey Hand, UK based non-profit consultant. “Board education, focus on financials and measuring board performance are crucial.”

The UK Charities Commission has clearly laid it out about managing resources, acting with reasonable care and skill, in the Essential Trustee.

Given the growing demands placed on this sector, the more informed and strategically aware the board is the greater their chances of survival; and bigger benefits are likely to accrue to the communities they serve. This is especially true in current times when economies are struggling and loose change may not be as readily available as it used to be. Trustees will need to up their game and be ready to move at the pace expected of them.

While nonprofits don’t exist to make profits their mantra cannot be to make losses either!


© Anu Maakan 2016

(Disclaimer: all views published here are the personal views of the author and do not represent those of any organization).

Organisational Governance: The story of the Crimson Board


They met in the Crimson room, just as usual. Tim was there, so were Paul and James. Michael with his striped tie, angled for power with the CEO. Becky was in animated conversation in a corner of the room. Murakami had an urgent word for Terry.

King, designated to run the meeting, started to read out the agenda. Not everyone seemed to agree on the priorities. There were rumblings about missing topics. Paul did not seem to recognise item number 3. Well, he did have a lot going on with his responsibilities on 4 other corporate boards!

The closely-drawn, dark blinds in the background seemed sinister than usual. The banter was noticeably toned-down! The crimson room seemed tense.

There were 20 of them, the nerve centre of a mighty corporation. Between them, they had over 200 years of experience in Strategy & Sales, IT, Audit & Risk, Human Resources, Finance, Marketing and new ventures. They had valiantly steered the company for the first ten years. The company had grown and shown resilience to new challenges. However, in the last 2 years…there had been issues. The CEO was under serious pressure, the P&L red in places and large investors engaged in considerable ‘finger waggin’.

What went wrong?

While a few clues are hidden in the story of the Crimson board, it would help to understand what industry pundits have to say about Board best practices.


·         Is the board the right size, for the size of the company?

·         Does it have the right set of competencies/ skills?; i.e. suited to the size of the organisation and its peculiar issues.

·         Does it include an adequate number of independent directors?  Independent directors are likely to ask the harder questions, discipline managers & ensure shareholder interest is taken care of.

·         Does the board meet at regular intervals and have a clear agenda for every meeting? Does the agenda cover all matters of importance to the company?

·         How flexible is the agenda? Is it easy enough to call for special meetings or to include new issues?

·         Does the board receive the meeting pack in sufficient time, prior to the Board meeting?

·         Is the board able to allocate time across topics such as Strategy, Risk Management, Financial performance, Compliance, Compensation & Succession planning?  (Smaller boards may have fewer focus items.

As per Korn & Ferry’s 20 Best Practices to improve Board Performance, ‘boards can play a critical role in evaluating how well the business strategy of the organisation is being carried out’.

·         The board should carry sufficient diversity; provide sufficient coverage to minorities, foreign nationals and women. This can help avoid ‘group think’.

·         Do new and old members both contribute to the discussions and do board members have sufficient time to invest in their board duties?

·         Does the board have open, hi-quality debates leading to effective decisions? Do board members challenge decisions? As per the FRC UK, ‘An effective board should not necessarily be a comfortable place. Challenge, as well as teamwork, is an essential feature.’

·         Does the board have a good understanding of the core business and is able to use its own observations together with the data presented to it.

·         Is the board proactive in responding to external events?

·         Do the chairman & CEO work well together and does the CEO trusts the board enough to share information?  Or ‘Does he wait until the night before to dump on the directors a phone-book-size report that includes, buried in the thicket of sub-clauses and footnotes, the news that earnings are off for the second consecutive quarter?’, says Jeffrey A. Sonnenfeld in the Harvard Business Review article, ‘What makes great boards great’.

·         How effective is group dynamics & interpersonal relations between directors, between board and management and between chair & board?

·         How well are conflicts executives and shareholders managed? Members of the board, as trustees of shareholder rights, must play the role of owners as best as they can!

·         Are the board’s sub-committees properly constituted, perform their delegated roles and report back clearly and fully to the board?

·         Is the board place value on the reputation of the company as much as corporate performance?

·         Is the board representative of large and small shareholders to ensure balance of power and improved decision making?

·         Is there is appropriate succession planning for key board members?

The effectiveness of the lead independent director, the board’s relationship to management, elimination of information asymmetry and development of the board’s agenda are other important aspects. As per the Canadian Society of Corporate Secretaries, the Best Boards ‘have the right people, get the best information and make the best use of their time.’

Let the Crimson Board remember that when boards lose, not just shareholders but employees and all other stakeholders lose too!


© Anu Maakan 2016

(Disclaimer: all views published here are the personal views of the author and do not represent those of any  organization).


Organisational Governance & Change: Fishing for the right metric


‘Total fish biomass varies by twofold within three regions of the Atlantic, and 8-10 fold across regions in the Pacific’, as per findings from a paper titled ‘Measuring change in fish communities: from monitoring to metrics to management’. This is part of a study conducted for the National Coral Reef Monitoring Programme. In recent years, ‘Fish Biomass’ has been used as a key metric to describe the status and trends of fish communities.

Even so, scientists involved in this study are not completely happy with the use of this metric to represent the status of a complex ecosystem. They are evaluating other metrics.

Earlier this year, France banned use of dangerously thin models, i.e. models with a low BMI. Super-skinny models will be banned from catwalk shows and advertising in France under a new law aimed at ending end the ‘glorification of anorexia ’.

Under World Health Organisation guidelines, the median body mass index for an adult population should be in the range of 21 to 23 kg/m2, while the goal for individuals should be to maintain body mass index in the range 18.5 to 24.9 kg/m2.

As seen here, BMI and Fish Biomass tell us a lot about the health of an individual and that of an ecosystem. There exist several million metrics, depending on what we want to measure and act on/ improve. However, are we sure we are measuring things optimally and not wasting precious time ploughing through mounds of irrelevant and distracting information?

Factors to consider when selecting a metric:

  • What is the metric trying to measure? Is the metric representative of what you’re trying to measure? ‘Businesses tend to measure the wrong things’, says Becher of SAP in this article in Forbes.
  • How it will be used? For example, in the example where French MPs have identified BMI as a measure, their overall objective is to combat anorexia.
  • Do the key stakeholders buy-in to the metric (for that will determine its credibility)?
  • How accurately can the metric be measured? I.e. is there sufficient data available to compute the measure?
  • Does the metric condense a considerable amount of information into one number, potentially losing a great deal of information in the process?
  • How sensitive is the metric to methodology, i.e. can its value be affected by the process used to compile the metric?
  • What are the other inter-related measures that must be examined alongside.Eg – ‘Time taken to deliver a software package’, might be meaningless if not juxtaposed against ‘Quality of the package’.
  • How does the metric impact behaviour? For example, poorly constructed incentive schemes can distort sales behaviour and encourage miss-selling and misconduct.

‘Metrics are used to drive improvements and help businesses focus their people and resources on what’s important’, says George Forrest in an article titled, ‘The Importance of Implementing Effective Metrics’.

Having scientifically designed metrics helps organisations in making appropriate decisions, measure and drive performance, deliver to expected quality standards, benchmark to competitors, focus change and improvement efforts, provide direction and shape strategy.

Not only should metrics be well-designed, they should be evaluated for ‘appropriateness and relevance’ on an ongoing basis; so as to stay aligned with changing corporate goals.

Remember that choice of metrics such as oven temperature and seasoning are imperative to getting your ‘baked salmon delight’ just right.

(*Body Mass Index (BMI) is a person’s weight in kilograms divided by the square of height in meters. A high BMI can be an indicator of high body fatness).

© Anu Maakan 2016

(Disclaimer: all views published here are the personal views of the author and do not represent those of any organization).

Regulatory Change: Disclosures for investor protection under MIFID II


(Image courtesy:

 At the Battle of Tannenberg in August 1914, 30,000 Russian soldiers were killed or wounded and another 95,000 were captured. The Germans lost fewer than 20,000 soldiers and captured military supplies. After this defeat, the Russian army could not muster an offensive against the Germans until World War II.

‘German leaders had a thorough understanding of their adversary’s capabilities, schedules, and concept of operations, and this knowledge allowed them to exploit Russian vulnerabilities and defeat them in detail’, says Gregory Elder in a paper titled ‘Intelligence in War: It can be Decisive’, filed with the CIA library.

Clearly, access to ‘intelligence’ / disclosure of information can be powerful. It can affect outcomes.  ‘OUTCOMES’ determine the financial future and/or quality of life of the investors in the financial markets.

Investor protection is a large theme under MIFID II/ MIFIR which aim to enhance the efficiency, resilience and integrity of financial markets. On 25th April ’16, the Commission adopted a delegated regulation supplementing Directive 2014/65/EU. MIFID II/MIFIR provide an updated harmonised legal framework governing the requirements applicable to investment firms, regulated markets, data reporting services providers and third country firms providing investment services or activities in the Union.

MIFID II, which comes into force in January 2018, bolsters requirements regarding the “appropriate information” that an investment firm must provide in good time to the client. Here is a closer look at some of the key features of MIFID II/ MIFIR pertaining to ‘disclosure’ of information.

  • Investment firms should provide clients or potential clients with the necessary information on the nature of financial instruments and therisks associated with investing in them.
  • Investment firms’ should disclose information on allcosts and charges, in good time before the provision of services. These obligations extend to relationships with professional clients and eligible counterparties.
  • In case the firm offers ‘investment advice’, it must say whether the advice is provided on an independent basis or not and whether it is based on a broad or more restricted analysis of the financial instruments available on the market.
  • Such firms must conduct aSuitability test based on the clients’ investment objectives, financial situation and knowledge and experience. These must be repeated at a regular frequency. Appropriateness must be examined for non-advised services.
  • Clients should be informed of the performance of their portfolio and depreciation of their initial investments.
  • Investment firms must have a ‘Best Execution’ policy in place and must report to the clients the quality of their execution. They must also report the top five execution venues in terms of client orders.
  • Information requirements should be established which take account of the status of a client as   either retail, professional or eligible counterparty. To this end, it is appropriate to establish less stringent specific information requirements with respect to professional clients than to retail clients.

Finally, disclosures must be made in a clear, understandable, unencrypted manner, so as to be useful to investors; much as the intercepted Russian military intelligence was, in the Battle of Tannerberg, to the delight of the Germans!

It is upto investors to make best use of the disclosed information. To quote  Gregory Elder,  ‘Intelligence at Tannenberg did not win the battle, but it did play a decisive role in dictating the way Germans employed their units against a force that was larger than theirs’.


© Anu Maakan 2016

(Disclaimer: all views published here are the personal views of the author and do not represent those of any organization).