Amanda Mellor talks about her unique perspective from both sides of the board table and the evolution of corporate governance
Amanda is Group Secretary and Head of Corporate Governance at Marks & Spencer and Non-executive Director at Keir Group.
Why did you choose to pursue a career in corporate governance?
The honest answer is, I fell into it. When I started out, I did not know that corporate governance existed as a career. It was not a deliberate choice, but one more of experience and circumstance. I had worked in an investor relations role for a number of years and I was also involved in a lot of the CSR engagement with investors, which usually involved people from the governance teams.
I got far more involved with governance when M&S decided to combine the role of chairman and chief executive in 2007. I had many governance contacts so I supported the company secretary – we worked as a double act to manage the engagement following the decision.
So, it was circumstance and experience that led me to succeed my predecessor as the company secretary. Having got here, I am really glad and I would choose it again. It is so interesting, covers so many different issues and requires a different thought process, which I think I would have been attracted to, had I known the job existed.
What has been your biggest challenge or achievement to date?
Whatever you do, at any stage of your career, there are significant new things that seem to be the biggest challenge, and then you do something different and something more challenging comes along.
For me, moving from the investor relations role to group company secretary, when I was not a lawyer, chartered accountant or chartered secretary, was a big, bold step. Certainly, to have responsibility for legal, internal audit, insurance, the archive, pensions and the company secretariat, where the technical knowledge of all of the individuals who reported to me far exceeded mine was daunting.
I had to learn as fast as I could, not only to lead and manage a large team, but to develop an understanding of a really wide range of complex issues affecting the business, both internally and externally. As if that was not enough, I then had to learn all of the subtle skills of supporting a board.
My best professional achievement has been building and working with such a great professional team. I have worked with many of them for a number of years and I am proud that they are recognised consistently for the quality of their work – be that the reporting of governance, audit and remuneration or for the quality of legal support. A highlight was being made a Fellow of ICSA and then recently being appointed to the operating committee at M&S.
What do all effective company secretaries have in common?
You need a good sense of judgement, humour, discretion, integrity and tons of patience. You need to be comfortable operating behind the scenes with quiet efficiency and being often lonely! The role has changed hugely with the evolution of governance. It is no longer just about having good technical skills.
Company secretaries need to have the ability to think strategically about the long-term impact of any decision, engage with the board and be diplomatic, as well as offer pragmatic, common-sense solutions. Many of the issues you are dealing with do not have clear-cut, right or wrong answers.
You therefore need to develop a blend of commercial, human, legal and ethical acumen; you need to be empathetic and good at understanding people. Psychology is really important in the boardroom and you do not get taught that as part of the qualification.
What are the biggest governance challenges that companies face?
In a small team, it is keeping all the plates spinning in a practical way. We have got more regulation and legislation than ever, and staying on top of all the latest developments, and doing the day job with a small team is challenging.
At M&S, we believe that governance will only be effective if we move away from box-ticking and recognise the value it adds to the business, the checks and balances it provides and the confidence and trust it can communicate to all of our stakeholders. We can help support this by adopting a practical approach to not just the reporting, but in how we comply with the regulatory and legislative changes on a daily basis and try to make sure that people see the value that it is trying to bring to the organisation.
Are there any flaws in our current corporate governance system?
At some point it might be helpful to let the water settle, so we can really see what is going on and genuinely add value and change behaviours. The fact that we have yet more regulation every year means that we are always applying new principles. With so much change year on year, you cannot always see the benefit of all of the things that you are being asked to do.
It might be helpful to slow down the annual introduction of yet more measures and push companies to rise to the challenge in terms of how they are demonstrating compliance, better values, integrity, better reporting and transparency. Ultimately that is what will enable us all to build trust.
What do you think the long-term future holds for governance?
Following the EU referendum and the US election, the governance debate is absolutely focused on fairness, the responsibility of directors, business serving stakeholder interests and, of course, pay.
These issues are all going to remain in the spotlight so it is important for companies to consider how they can best respond. How can they ensure their agendas include the opportunity for proper feedback so that employees have a voice? How can they ensure their strategy, board discussions and papers take all stakeholders into account, and how can they really demonstrate what they are doing differently?
Are directors truly able to honour all of their duties, as listed in the Companies Act, equally?
Directors' duties form part of the induction process. As a retail business and with our value set, consideration of all our stakeholders is already ingrained in our debate on all areas of the business.
So, throughout our board meetings there are discussions about people, the environment, etc. It forms a natural part of our conversations. If you can keep that as your main objective, it does fall into place. But it does require the chairman and the board to ensure that they are talking about the right things regularly and in the right way.
Do you believe that the unitary board system is working? The Prime Minister recently suggested the idea of employee representatives on boards. What is your take on that?
The employee representative on board concept, while well intentioned, is fraught with complexity as to how this would work in practice, especially in any multi-unionised environment. At M&S the head of our employee representative group comes to our board meeting to represent the employee voice. It is definitely a positive giving this individual an opportunity to represent the employee voice in the organisation, unprepared by management or otherwise.
There are many other ways for board directors to ensure adequate time for discussion and insight with employee representatives, without having to elect them to the board. Whether that is dialogue at operational or executive committee level, or inviting several people into the boardroom at least once a year to meet with the non-executives.
You have a perspective from both sides of the board table, as a company secretary and a NED. What have these positions taught you about boardroom dynamics?
A huge amount. It is very different being a company secretary and sitting on one side of the table, to sitting on the other side as an NED. It gives you a different perspective and, hopefully, makes me much more empathetic to both parties.
It is important for directors to spend time connecting with the business to really understand the issues under debate. This understanding, as well as good quality board papers, make all the difference to your contribution. The internal networking part of my day job has always been important, but seeing it from a NED perspective has made it even more so.
It has highlighted the importance of being able to operate across a wide range of subject matters and not just being focused on your own area of expertise: a diverse combination of people and skills is necessary to generate the right level of challenge and avoid groupthink.
It has highlighted the skillsets a chairman and the committee chair need to have to be effective and just how much time they need to put in behind the scenes. I have seen how a really good chairman will encourage diversity of opinion and challenge to happen in a way that is robust without being divisive.
Are there any skills that company secretaries specifically need to develop to transition into NED roles? What skills can company secretaries bring to the board in this capacity?
Firstly, do not sell yourself as a company secretary – boards already have a company secretary so they do not need another one. Company secretaries wanting to transition to a NED role should therefore focus on the broader value they provide and the skills they can offer. They have experience of sitting at the boardroom table, the audit committee, remuneration committee and nominations committee: this is much more boardroom experience than many other people, so do not forget that.
The other thing to remember is that they need to be able to operate very differently between the day job and the NED role. For a company secretary, that is quite challenging because you will be behind the scenes in your day job, but you have to do the exact opposite as a NED. You have to be a lot more assertive and be able to challenge across the piece. You have to behave in a completely different way.
Is the NED recruitment pool wide enough? There has been suggestions that it is a 'boys club' and difficult for new entrants to get in – what is your take on that?
The pool is becoming wider each year – but we definitely need more company secretaries to put themselves into that pool. I would not define the current pool as a boys' club. I see lots of diversity and richness coming and definitely an increase of females being selected for NED roles which is absolutely right and timely.
The pool is now more about calibre than quantity and we need to develop enough women with the right level of executive experience to be able to add value to boardrooms.
What do you think that diversity of any kind brings to the board?
Diversity is hugely important but it is not just about gender. When the debate started we were always really clear at M&S that diversity was about so much more: background, skills, competency, life experience, professional experience, culture, etc. All of these diversity components will drive the strengths of the directors both individually and collectively as a board. Diversity means you get different perspectives of thinking, different experiences, different challenging styles and they all add value to the discussion.
Lord Davies' target of 25% women on boards was met earlier this year, however, mostly by women in NED roles. Do you think there is a blockage to women achieving executive positions?
Certainly in some industries, it has been more challenging – whether that is because of lifestyle choices and then finding it difficult to come back for family reasons. The pool of executive positions needs to be bigger, especially given the move towards smaller boards. The role of an executive committee has become more important and we are now beginning to see a lot more movement at this level.
Why do you think the company secretary profession is typically more diverse in terms of gender than many others?
It comes back to the range of skills you need to do the role – it is not just about technical expertise. The company secretary of today is being asked to deal with a wide range of issues and, often the ones no one else in the business knows what to do about. There is a lot of psychology in the boardroom and that requires EQ not just IQ. Diplomacy, pragmatism, empathy, patience, logic and technical knowledge are all qualities a company secretary has to acquire to do the role. It is this diversity of skills that has encouraged the profession to attract greater diversity today. It certainly makes the job more interesting!
Interview by Alexandra Jones, Editor, Governance and Compliance magazine
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