Why effective corporate governance is all about integrity: Natalie Sykes

To that end, it has been a great pleasure to be a contributor to the book Effective Directors - The Right Questions to Ask (QTA), on behalf of the inspirational Charlotte Valeur, editor alongside co-editor Claire Fargot.

I had the privilege of working alongside Charlotte at the Institute of Directors, where she was our second female chair in over 120 years to lead the board.

This book is no love story, so if you are looking for a Mills and Boons style novel you are totally on the wrong page.

What it is though, is great governance from several leading business specialists within their fields.

It is factual, useful, insightful - more than an operation manual. It is not quite the Da Vinci Code but more the UK Corporate Governance Code with character.

My chapter, as dry as it may sound, The Roles and Responsibilities of the Board, is often completely overlooked in the boardroom especially where self-interest is top of the agenda.

After all, when you are shareholder, chair and director it is quite easy to become conflicted.

It doesn’t feel like that long ago, although it was 2005, when there were significant Boardroom frictions at WM Morrisons Supermarkets. The supermarket chain’s meteoric rise from a market stall in Bradford from 1899 through to being a FSTE 100 company and fourth largest supermarket in the UK, really began in 1952 when Sir Ken Morrison, aged 21, took over the business from his father, William Morrison.

Within 15 years, the business was floated on the London Stock Exchange and by 2004, in a £3.3 billion purchase, it took over Safeway.

The acquisition of Safeway came with many challenges, in addition to a creating a fraught relationship with the one and only other NED, and Deputy Chair, David Jones, then 62, and the Chair and Chief Executive Officer, Sir Ken Morrison, then aged 73.

It was following five profit warnings in 2005 that the shareholders requested for more Non-Executive Directors, something which Sir Ken had always resisted.

After 50 years of being at the helm, in 2006 finally Sir Ken stepped down from being CEO and the role of Chair and CEO was separated out and not held by the same person, something which the UK Corporate Governance Code recommends.

This led to the board being broadened with greater diversity in thinking and experience.

More recently, I played an active role in broadening a private limited company board. This enabled it to act appropriately in addressing the strategic direction of the business.

The beauty of corporate governance is that it is global. Unlike our legal system which differs dramatically across the globe, governance is a code of conduct which aligns with integrity – doing the right thing. By doing more of the right thing, we can also self-regulate.

The challenge we have is that to do the right thing takes courage, clarity, and strength, therefore it is often avoided. Even if we know that something is not right, it is easier to take the line of least resistance, which sadly does not change the status quo and leads to the need for more regulation as things go wrong.

By being as clear, inclusive, transparent and truthful as we can, we can all play our part in positively transforming business, society and our relationships.

Natalie Sykes is managing director of James Wilby Logistics