Review: Serial director’s manual skims the surface

4 minute read

Economist and author Dambisa Moyo speaks during the Women In The World Summit in New York City, U.S., April 13, 2018.

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LONDON, May 14 (Reuters Breakingviews) - Dambisa Moyo has spent a decade in the boardroom of some of the world’s largest companies. She was a director of Barclays (BARC.L) when Bob Diamond resigned over a Libor-rigging scandal in 2012, and when his successor Antony Jenkins was pushed out in 2015. The same year she had a ringside seat when SABMiller was taken over by Anheuser-Busch InBev (ABI.BR) in a $100 billion deal that created the world’s biggest beer maker.

She’s a non-executive director of $206 billion oil giant Chevron (CVX.N), which is grappling with the transition to cleaner power sources and explored a merger with rival Exxon Mobil (XOM.N) last year. This has given her ample material for a book setting out what really happens at the very top of big companies. Sadly, “How Boards Work: And How They Can Work Better in a Chaotic World” is not that book.

To be fair to the Zambian economist, she delivers on the promise of her title. “How Boards Work” is a detailed explainer of how corporate boards at listed companies operate, describing how often they meet and how chief executives are selected. It also spells out how vital directors are in providing checks and balances, setting strategy, and creating a corporate culture.

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The former Goldman Sachs (GS.N) economist and author of books on foreign aid and the rise of China also offers a guide for how boards must adapt to a changing world. In the most interesting chapter, Moyo explores the issues directors should not ignore. Protecting companies from data breaches and learning to deal with increasingly active investors are sensible suggestions. The shortage of skilled labour and the impact of protectionism are other major risks.

The 52-year-old’s impressive résumé lends authority to her views. Aside from Barclays, Chevron and SABMiller, she also served on the board of Barrick Gold (ABX.TO), the $43 billion Canadian miner, which has come under repeated attacks from campaign groups over its human rights and environmental track record and in 2020 accepted the court-mandated closure of its Chile subsidiary.

Yet these companies fail to get an in-depth treatment. Moyo discusses Barrick in the context of decisions the board took to help stabilise the company’s share price following a gold price collapse, admitting the yellow metal’s recovery helped. She describes the run-up to the SABMiller deal to illustrate how companies targeted for takeover face a difficult decision, but fails to share what went well or badly. Early in the book, Moyo cites confidentiality agreements to explain why the book is not a whistle-blower’s memoir. But there’s surely a middle ground between divulging board secrets and not evaluating those situations at all.

In her introduction, Moyo argues that directors take on enormous personal and financial risk while having relatively limited impact. It’s a comment that readers may wish she had explored further, because the risks are rarely laid out in public. But Moyo’s discretion means her argument fails to convince. Nor does she delve into the sort of personal conflicts facing serial non-executive directors. On the one hand they must be robust enough to represent shareholders and create value by standing up to chief executives. On the other, directors who are a massive thorn in the side of a company’s management and the rest of the board may never get an invitation to join another one.

Board directors are individuals who face competing personal and corporate objectives. Moyo knows that better than most. Her experience informs her views, yet the reader largely must take that on trust. “How Boards Work” is an objective reflection of how modern corporate boardrooms function. Without her personal reflections, however, it fails to be a game changer.

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- “How Boards Work: And How They Can Work Better in a Chaotic World” by Dambisa Moyo was published by Bridge Street Press on May 6.

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