Written by Holtby Turner
In real estate, there appears to be an increasing trend of appointing to impress and receive industry recognition. But boards aren’t meant to be shiny; they’re meant to bring oversight and independent focus to long-term strategy, without personal bias. Leaving shine aside, at the other end of the spectrum, boards that ooze comfortable camaraderie with NEDs and executive management who offer ‘a bit of governance’ are often seen as better than none. Then again, how often does it swing the other way, when smaller companies are heavy on the corporate governance but far too light on experience being brought to a relevant corporate strategy?
Is this really the best we can do?
“Absolutely not!” said Toby Turner, our MD and strategic advisor in real estate succession planning. “It’s the board and the quality of it that often sets the bar for the quality of the strategy. So you’d be shooting yourself in the foot if you short-changed yourself with a hurried hire, or a move to keep up appearances, that doesn’t meet your particular company need.”
So with all this in mind, here’s what we believe at Holtby Turner are the best basic principles to consider when appointing a board, which have helped many of our clients as a handy litmus-test when they’re considering the process.
Appoint for competence, as well as chemistry.
Often a consequence of our natural inclination to avoid conflict at all costs, NEDs can get picked because they’re a comfortable fit with company culture. While there’s nothing wrong with this per se, you may end up with a cautious and conservative board with a ‘samey-samey’ set of opinions.
With real estate currently undergoing massive change, it’s never been more competitive. So here, the best NED might not necessarily be someone you’d choose to socialise with, but rather the kind of person who’ll be prepared to challenge the current strategy through their expertise, competence and insight. Nice is nice, but smart is nicer when the results of their efforts are felt.
Look forwards, not backwards.
What an NED has done is less important than what they are yet to do for you. A strong CV and a solid industry background are not the only things to look for. An exceptional NED will have a genuine passion for developing the company and work energetically to make sure the strategy is alive and kicking. That means understanding their personal motivational driver – something really important to get straight before appointing them
Ego is the enemy.
Whilst the kind of senior people normally appointed as board execs often have healthy self-confidence, you’ll want to avoid someone who enjoys others kow-towing to their savoir-faire at board meetings. Stories of past success that include too much focus on how things used to be done under their watch are amusing at first, but wane over time. Remember what they say: ‘all that glitters…’
Elasticity and humility.
A more active quality to try and secure is humility. As the board is ultimately responsible for company strategy, it needs to be sensitive to changes in the environment and prepared to ditch flawed assumptions when data or unexpected turns in results mean it no longer holds. Imagine a company is building a board for a sector of construction undergoing rapid transformation; the board needs to be prepared to continuously re-evaluate its strategy, scrapping what’s outdated, or may not work further down the line. Often what quietly defines great strategists is a collaborative and agile elasticity in their delivery.
Manage for mix.
Whilst not appearing to contradict what’s above, collaborative and agile mustn’t be perceived as wishy-washy. You’ll want NEDs who can challenge the status quo and be OK if this sometimes causes a rumble. So when choosing to appoint a really robust board, try thinking in wholes, not parts. For a forward-thinking company in property or construction, arguably the ‘best possible’ board blends industry veterans with younger executives – especially those who can develop tech, digital or marketing strategies for a rounded, up-to-date strategic outlook.
Ditto when it comes to expertise – balance is best, especially these days where the delivery of a truly great strategy is often driven by the speed of technological advancement. Therefore, the board demands diversity of opinion, specific experience and input. As Alan Froggatt said, “it’s an art rather than a science. We’re talking about people, and sometimes board synergy is hard to predict.”
And he’s right, but if you’ve done it as much as we have at Holtby Turner, it gets easier, especially as objectivity is often healthy to inject into the process. It can be tricky to assess and appoint an NED without a certain level of due diligence to include personality and fluid intelligence assessments – things often only an executive search firm can offer.
One thing over others to take away is this: being quick to appoint an NED or appointing under pressure is a bad plan, a bad plan full stop. Even if your organisation has a rock solid, and shiny, strategy.
