Sir Stelios’ very public falling out with the easyJet board – a company he founded – is a salutary tale for any business with shareholders.
Boardrooms can be like a stormy marriage. One where the husband and wife are all having multiple affairs, one has considerably more assets than the other and they have hundreds, even thousands, of kids to worry about. When they split, the real winners are often their respective legal teams.
The Stelios and easyJet marriage always had the potential to end badly, and, while setting up his own rival airline hasn’t quite indicated the end of the feisty entrepreneurs’ relationship with the budget airline he founded, it’s a pretty big line in the sand.
Being the one with the most shares isn’t the same as being the majority shareholder and it can be a volatile table to sit at when a founder who no longer has overall control flexes their muscles.
This is why boardroom appointments are so important. Even though Stelios stepped down from the board of easyJet last year, his history, profile, character and 37.4 per cent shareholding make him an ever present factor in whatever decision it takes.
Egos are no bad thing at board level; they often come attached to a successful and charismatic individual who can bring expertise, experience and a higher profile to your business.
But are you inviting Eric Cantona or Carlos Tevez to your top table?
OK, it isn’t quite as red or blue as that, but a successful board does have to function as a team. If you appoint a collection of talented individuals how do you know they will gel? What are the flashpoints?
Firstly, do your homework. Your due diligence on any board member should be as rigorous as it would if you were acquiring a business.
Don’t just let an executive search consultant convince you that this candidate is right for your board, ask them why they are. What challenges have they overcome? Who have they fallen out with? Do they have experience of boards with family shareholders or founding members? Actually scrutinising their achievements at different types of companies can tell you a lot. Ask them where they felt most comfortable, where they experienced most conflict and how they dealt with it.
But you have to look at your own board when appointing as well. Division of power at the top is always a tricky equation. Responsibility doesn’t always relate to share ownership and the positions of CEO, chairman and finance director are key to get right. If this trio can’t work together you’re already flogging a dead horse.
Be honest with yourself. Do you have a troublemaker and what power and influence do they have? Specifically, who sides with them and do they have the ear of the wider shareholders? How will your latest appointment fit into this Lions’ Den? Don’t get me wrong, appointing the right candidate can actually pour oil on troubled waters and ease the friction which threatens boardroom harmony. No board really wants in-fighting, it attracts the wrong kind of media attention, diverts focus from the job in hand and delights competitors.
But finding someone willing to act as a boardroom consigliere and keep the egos in check and the battles well and truly under the radar of investors is a difficult brief.
If fate, or your trusted leadership adviser, brings you such a gem then hang on to them.
David Higgins is the founder of Inception Partners, a London-based leadership and advisory firm working with FTSE 100/Fortune 500 businesses and large privately owned companies.
He was also the co-founder and CEO of global executive search and professional IT services firm, Harvey Nash a company he floated with a full listing on the London Stock Exchange in 1997. He stood down as vice chairman in April 2009 and now is now advises a number of private SME companies.
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