Publication Letters to a New Chair

The ‘Letters to a new Chairman’ (as they were then titled) were first developed by Hugh Parker and the IoD in 1990 and revisited by Tomorrow’s Company in 2014. We argued then, as we still do – that good governance is a cornerstone of good business, and that the chair’s role is pivotal in both.

Our first involvement with these letters was through our work leading the Good Governance Forum, which was established to develop practical tools and innovation, to help boards tackle behavioural and cultural challenges and open up new opportunities. Here, we have re-launched and refreshed them, in partnership with the KPMG Board Leadership Centre.

These letters look at how concepts such as culture, values, long-term sustainability and purpose have become key cornerstones of good governance. Similarly, board diversity in all its forms has become a necessity, not just the preserve of those forward thinking chairs. But how does the chair set the organisations purpose and character? What are the key relationships to work on? How do you exercise the right tone from the top? These are just some of the questions these letters seek to address.

The letters are not just for chairs. They celebrate and explore what makes for good governance; recognising that while the chair brings all of these people together, governance is a collaborative effort. This collaboration between executives and non-executives, supported by all members of the board, with all utilising the vital role of the company secretary, and through strong and effective engagement with and regard to the perspectives of investors and stakeholders. These themes come up time and time again in our conversations with directors about what makes good governance work for the organisation.

Governance is frequently held up as a solution to bad or unethical business. With every new scandal, we look to the boards of our largest companies and ask – how they could have let it happen? Barely a month goes by without outrage over an executive’s pay or bonus, and the requirements and responsibilities of boards continue to increase. Tis is only right, and boards must see these changes as an opportunity to demonstrate fully how seriously they take their responsibility, and strive for better, moral behaviour that refects their role as a vital part of the ecosystem. The companies that will do best are those that can see codes, regulations and reporting requirements as an opportunity, and think creatively about what governance is there to achieve and unlock, not that which it prevents.
The letters are also intended to spark debate. There has never been a one-size-fts-all model of governance and these aren’t either. Instead, they are a starting point for putting good governance into practice.