The assignment was commissioned by a large, privately owned international manufacturing and distribution business in the automotive sector. They had a very large Board in place, with complex stakeholder dynamics. There were significant business challenges and market consolidation leading to a changing competitor landscape and activity. Internal processes and structures were under pressure and needing updating and investment. There were also on-going changes in business leadership.
Following a detailed briefing and a review of business strategy the Board members were interviewed individually on core aspects of Board effectiveness. Recent Board packs and paper were reviewed and tracking on decision process and outcomes. A Board survey was conducted and silent observation of the main Board, Audit, Risk and Nominations committee carried out. The composition and tenure of the Board was conducted using industry benchmarks.
There was specific shortfall in automotive industry experience and of new/emerging markets where the business strategy identified opportunities for the business. Additionally, experience of manufacturing best practice was limited. Many Board members sat on multiple Boards within the Group and there was a lack of independence and external perspective. Additionally, processes around decision making were blurred and action planning delegated outside the Board. Some reporting from committees to Board was out of sequence. Data streams into the Board were unreliable and the agenda very heavily loaded, with a beaurocratic weighting, compressing debate on strategic issues.
It was decided to significantly change Board composition and greater industry expertise was recruited. These NED’s made different demands in terms of reporting, decision making and follow through which supported an improvement in overall effectiveness.
The agenda was further developed to allow closer alignment on strategic priorities and Board meetings extended through virtual calls and Skypes, bringing together what was now a very diverse and global group of NEDs.
Board packs were modernised and reduced in size and management encouraged to present on issues for Board consideration as well as retrospective performance.
The review was repeated twice in subsequent reviews with strong improvement in performance across all dimensions. The business has grown into two significant new markets and improved margin through manufacturing improvements.
