| Bob Garratt, Profile Books, 2010, 320 pages, £9.99.
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| Allow me to declare a personal interest at the
start. Professor Bob Garratt was my immediate predecessor as Master of
the Worshipful Company of Management Consultants. He did that
brilliantly and has been a wise counsel to me since I have taken on the
duties of Master, while still managing to fly around the world helping
countries to strengthen their governance structures. So it is no
surprise to me that he writes so wisely about corporate governance and
the role of company directors. |
| This new, third edition of his book is very timely.
As Professor Garratt notes in his introduction, a lack of effective
corporate governance has been seen as one of the causes of the financial
crisis that plunged most of the world into recession in 2008 and 2009.
While Bob does not see more effective boards of directors as the
solution to all ills, he does believe, based on years of experience
working with companies, that improvement in corporate governance is one
of the necessary elements in preventing similar crises in the future.
The new edition also highlights some of the key features of the 2006
Companies Act and the additional responsibilities it placed on
directors. |
| The central concept in this book is that of the
Learning Board. The Board must not just be capable of exercising
oversight and giving direction; it must also develop systems for fast
feedback, assimilation of information and identification of critical
issues for the future of the business. Rigorous processes for the
selection and induction of directors need to underpin this. |
| Professor Garratt lays bare the demands of being a
company director today. It is an important role and effective
performance requires time, energy and intelligence (both cerebral and
emotional). Directors have to weigh up competing demands on the
business, balance the short and the long term, the demands of the owners
and other stakeholders, financial returns versus issues such as
reputation or impact on the environment. |
| This is a well-paced and extremely readable book. It
is also great entertainment: I didn’t know (but perhaps should have
suspected) that one of the origins of the term ‘management’ comes from
the old Italian word for the breaking of wild horses and their
domestication. As Bob notes, there are still many practitioners of this
style around! I would suggest that this will be of great interest to all
those, including the Financial Reporting Council following that Lord
Davies report, who are now rethinking the role that more diversity .
including more women . can do to enhance company performance. But in any
case this book should be essential reading for anyone who is a company
director or who aspires to be one. However, being so keenly priced, it
would be a good buy for anyone interested in learning more about
corporate governance, how it can go wrong and how it might be improved. |
Vicky Pryce
Senior Managing Director, FTI |
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