00:00:00
300 million pounds is a lot of money,
00:00:02
even for a bank. People are dying as a
00:00:04
result of boards making bad decisions.
00:00:07
Don't think about the money, think about
00:00:08
people losing their lives.
00:00:10
Workplaces, organizations are systems.
00:00:14
They're complex human social groups. No
00:00:17
one person is responsible on their own.
00:00:20
Lots of people knew what was going on,
00:00:22
but couldn't be heard. And my goodness,
00:00:25
I hadn't thought about it like that. Is
00:00:27
that how it's going to play out? The
00:00:28
letter of last resort is written by
00:00:31
every British Prime Minister [music]
00:00:32
the moment after they enter 10 Downing
00:00:34
Street. It is only opened in the event
00:00:38
that Britain's been attacked by nuclear
00:00:39
weapons and there are there is no
00:00:41
communication from
00:00:43
government. What do you do? And you
00:00:45
can't think of a bigger question because
00:00:48
we're in the middle of a nuclear
00:00:49
exchange.
00:00:52
Welcome to Grit in the Boardroom, the
00:00:54
podcast that takes you behind closed
00:00:56
doors to unpack the pivotal decisions
00:00:59
that shaped organizations for better or
00:01:01
worse.
00:01:02
I'm Erica Elias and Norris and each week
00:01:05
[music] I sit down with a senior leader
00:01:07
who stood at the edge of a defining
00:01:09
moment. A crisis, a turning point, a
00:01:12
challenge where the stakes were high and
00:01:14
the outcomes uncertain.
00:01:16
These are the conversations you won't
00:01:18
find in annual reports. Honest,
00:01:21
strategic, and grounded in lived
00:01:23
experience.
00:01:24
Because governance isn't about theory,
00:01:27
it's about pressure, people, and making
00:01:29
the call.
00:01:30
My guest today is Professor Roger Steer,
00:01:33
known internationally as the corporate
00:01:35
philosopher.
00:01:37
His journey began in unexpected places.
00:01:39
The son of a preacher man, he studied
00:01:42
Western philosophy under Conrad Russell
00:01:44
and chose a safe career as a banker in
00:01:46
1979.
00:01:48
In 1981, he became a residential social
00:01:51
worker with children in care from inner
00:01:53
London boroughs where he learned a lot
00:01:55
about the best and worst of humanity.
00:01:59
Since then, Roger has advised some of
00:02:01
the world's largest corporations: BP,
00:02:04
HSBC, [music]
00:02:05
Barclays, and Nationwide.
00:02:07
He brings deep experience working with
00:02:09
CEOs and their teams, boards, and
00:02:11
executives.
00:02:13
Welcome to Grit in the Boardroom, Roger.
00:02:16
Let's get into it. It's lovely to be
00:02:17
here.
00:02:18
What's one moment you've seen where
00:02:22
moral clarity made all the difference in
00:02:25
a boardroom decision? Yeah, it's a
00:02:27
question of which one, I guess, but um I
00:02:30
think the one one of the early ones I
00:02:32
was involved in supporting.
00:02:36
And it was one of those things where a
00:02:37
lot of people had to be involved in the
00:02:39
decision.
00:02:41
Was one that actually had a big price
00:02:44
ticket on it. So, I was working with one
00:02:45
of the major UK banks
00:02:48
at around the time of the financial
00:02:50
crisis. And
00:02:52
they had a big moral issue around some
00:02:57
employees enjoying a direct benefit
00:03:01
pension scheme,
00:03:02
which was expensive to the employer and
00:03:05
very lucrative for the people who were
00:03:07
retiring.
00:03:09
And others, all the new employees, as
00:03:11
you know, would have come in on a direct
00:03:13
contribution pension scheme.
00:03:15
So, people Some people doing the same
00:03:17
job on the same salary were going to get
00:03:20
very different pensions.
00:03:22
And the CEO, in particular, was very
00:03:24
concerned that this was not fair.
00:03:27
And the board agreed. The board was also
00:03:29
interested in the fact that there was a
00:03:31
lot of money at stake, and 300 million
00:03:34
pounds is a lot of money,
00:03:36
even for a bank. So, my intervention was
00:03:39
to uh not only to talk to them about a
00:03:42
moral reasoning framework,
00:03:45
uh which I wrote written up it in the
00:03:47
book Ethicability,
00:03:49
but more crucially, to help them create
00:03:51
an environment where all the people
00:03:54
involved
00:03:55
who had to be involved felt that they
00:03:57
were going to be part of that decision
00:03:59
and became part of that decision.
00:04:02
So, we're talking about a workforce of I
00:04:05
think at the time
00:04:06
70,000, something like that. So, my
00:04:10
crazy idea
00:04:11
was to involve the trade unions and
00:04:14
other employee groups, staff groups
00:04:18
in an open negotiation and discovery
00:04:21
with
00:04:22
the board and the CEO and the finance
00:04:27
team.
00:04:28
And for some reason they trusted me and
00:04:31
and went with this.
00:04:33
And they had an open book conversation
00:04:36
where they laid out all the numbers.
00:04:39
And then laid out this
00:04:42
unfair moral dilemma with people doing
00:04:46
the same job, getting the same salary
00:04:48
going to benefit from very different
00:04:50
pension schemes. Is that approach
00:04:52
something that you
00:04:54
felt that they would have done without
00:04:56
you being there? No.
00:04:59
It was very clear that that was unlikely
00:05:01
because the history of those
00:05:04
negotiations was one of confrontation
00:05:06
with employee groups.
00:05:08
We're not very good at that in this
00:05:09
country. They're much better in Germany
00:05:11
where of course they have works councils
00:05:14
by law,
00:05:15
uh but we do not have in the UK a legal
00:05:18
requirement for employees to be
00:05:20
represented
00:05:22
at board level. So, in order to do this
00:05:24
we had to make something up, which was
00:05:26
create this informal process.
00:05:28
>> Mhm.
00:05:29
And behind the scenes I was
00:05:32
uh you know, coaching the senior leaders
00:05:34
around
00:05:36
you know, how to be open, how to be talk
00:05:38
how to talk about the moral values
00:05:41
that were critical here. And the core
00:05:43
moral value here was one of fairness,
00:05:45
justice as fairness.
00:05:47
And after 6 months
00:05:50
they came with an agreed recommendation
00:05:53
to all the employees. It was put to a
00:05:55
vote. There was an overwhelming
00:05:57
majority, a super majority in favor of
00:06:00
the adjustments to the pension scheme so
00:06:02
there was greater fairness
00:06:04
and obviously the bank and the
00:06:05
shareholders were able to continue to
00:06:08
fund both pension schemes in a way that
00:06:10
was economically sustainable.
00:06:13
And that I think is the one that's
00:06:15
always stuck in my mind and the CEO
00:06:17
still talks about it today even though
00:06:19
he's not no longer leading that company.
00:06:22
And what sort of things does he talk
00:06:25
about with you when he recalls that? I
00:06:27
think really it's a combination of
00:06:29
having a moral reasoning framework.
00:06:32
Having clarity and a discussion about
00:06:35
what values like fairness actually
00:06:36
means. So fairness for example is not
00:06:40
about equality, it's about equity.
00:06:43
So fairness means
00:06:45
um at a moral level
00:06:48
each according to their needs, not each
00:06:50
according to their wants and not each
00:06:52
everybody, you know, it's not about
00:06:53
everybody getting the same.
00:06:56
Um and we live in a society where, you
00:06:59
know, families have children, some of
00:07:01
those children are perfectly healthy
00:07:04
mentally and physically, others not.
00:07:07
But our society currently
00:07:10
although it's difficult, does decide to
00:07:12
spend more money supporting those
00:07:15
children with greater needs.
00:07:17
Hm. Do you think that some of your
00:07:20
values come from your earlier career
00:07:23
around being a social worker? Yes. And
00:07:26
also from my father
00:07:28
who was a builder during the week
00:07:30
um but on a Sunday he was a Methodist
00:07:33
preacher in the pulpit. So, you know,
00:07:36
literally a Protestant work ethic
00:07:39
from him but also from Bertrand Russell
00:07:42
Um the great British philosopher, his
00:07:44
son. So, I'm not that old that I studied
00:07:47
history of Western philosophy with
00:07:49
Bertrand Russell, although I had to
00:07:50
critique his book.
00:07:52
But I studied it with his son Conrad
00:07:54
Russell. And then, after a couple of
00:07:56
years in banking, I decided I wanted to
00:07:59
do something with more meaning in life
00:08:01
for me.
00:08:03
That's not to say that many bankers
00:08:05
don't find meaning in their work.
00:08:07
But for me, it was really working with
00:08:10
uh children in care from inner London
00:08:12
boroughs who were too challenging for
00:08:15
children's homes to handle.
00:08:17
So, I worked in a community home with
00:08:19
education
00:08:20
in Sussex. So, we took the kids out of
00:08:23
London and put them in the country.
00:08:25
And uh helped to instill in them a sense
00:08:29
of decency and a sense of safety
00:08:33
that they could then grow and develop
00:08:35
and try and get over all the traumas
00:08:37
that they they had experienced. So,
00:08:39
those, yes, from a personal point of
00:08:41
view,
00:08:42
I think that combination of
00:08:46
uh deep thought about what it means to
00:08:48
be human
00:08:50
plus the experience of moving from a
00:08:54
um
00:08:55
what I would call as a reasonably
00:08:56
privileged privileged middle-class
00:08:58
background, but to then do what I call
00:09:01
my practical MBA in life
00:09:03
with kids who had very little and had
00:09:05
been traumatized
00:09:07
were very shaping experiences for me.
00:09:10
And
00:09:11
uh when people say to me, and I'm sure
00:09:13
they say to you, I've had a bad day at
00:09:15
work,
00:09:17
um they may have done, but when you're
00:09:19
dealing with a child who's high on drugs
00:09:21
and is smashing the place up and is
00:09:24
deeply, deeply traumatized, and you try
00:09:27
and keep them safe and at the same time
00:09:30
protect them, but also protect others
00:09:33
from them,
00:09:34
that's a bad day at work or a tough day
00:09:37
at work. Mhm.
00:09:39
And bringing that back to the the kind
00:09:43
of boardroom decisions and the kind of
00:09:45
crises,
00:09:46
those sorts of moments, no doubt, play
00:09:51
play on kind of your experiences, your
00:09:53
values.
00:09:55
And have there been times where you've
00:09:58
felt that boards have been tested and
00:10:00
pushed? And what what does that look
00:10:02
like? And how do you see that coming out
00:10:04
in the behaviors and the way that people
00:10:06
act in those situations?
00:10:07
>> I think that's a really important
00:10:09
question. And
00:10:12
the my answer, and it's always my
00:10:14
answer, and it's the technique that I
00:10:17
ask them to practice,
00:10:19
which philosophers call the golden rule.
00:10:22
Put yourself in their shoes.
00:10:25
Role-play
00:10:27
if necessary. So, let's say first of
00:10:29
all,
00:10:30
you know, most people, certainly on
00:10:32
corporate boards, are privileged.
00:10:35
They've got enough money, more than
00:10:37
enough money.
00:10:39
They don't need to go to a food bank to
00:10:40
feed themselves.
00:10:43
Um
00:10:44
but many of their customers are
00:10:46
struggling.
00:10:48
So, in order to get some clarity,
00:10:52
I
00:10:53
invite them to get their head off their
00:10:55
iPad, out of their
00:10:57
100, 200, 300 page decks,
00:11:01
and stop and think about what it must be
00:11:03
like
00:11:05
to be living hand to mouth as a customer
00:11:08
or often as a colleague, an employee,
00:11:11
and say, "Right,
00:11:13
when you're making this decision, put
00:11:15
yourself in those people's shoes.
00:11:17
And decide what is right, not for you,
00:11:21
but for them.
00:11:22
Because they ultimately are your
00:11:24
shareholders.
00:11:26
It may not look like it, but they are.
00:11:28
And they're the key stakeholders in your
00:11:30
business. And there are,
00:11:31
you know, in the UK
00:11:33
60 million of them, 70 million nearly.
00:11:36
Worldwide, approaching 9 billion
00:11:39
fellow human beings.
00:11:41
We need to get real when we're making
00:11:43
these decisions and remember that
00:11:45
outside of this bubble
00:11:48
called the board meeting in a boardroom
00:11:51
with fine food and wine before or after
00:11:55
you know, life isn't like this.
00:11:57
Mhm.
00:11:59
Do you think that it comes from people's
00:12:01
lived experiences that they
00:12:04
behave and understand the world like
00:12:05
this? Or do you think that it comes from
00:12:07
something else?
00:12:12
Partly from their lived experience.
00:12:15
And a lot of the people that we've
00:12:16
worked with, you and I have worked with
00:12:19
have have striven to um
00:12:22
uh improve themselves and to
00:12:25
perhaps, you know, move from, you know,
00:12:27
my own background which was lower middle
00:12:29
class.
00:12:30
Um to something different. I like to
00:12:33
think of it as a sideways move.
00:12:35
So, yes, I it's nice to have enough
00:12:38
money.
00:12:40
But I think people
00:12:41
and this is true for individuals and for
00:12:44
organizations, if we can
00:12:46
anthropomorphize them for a second
00:12:49
to answer the question, you know, how
00:12:51
much is enough?
00:12:53
And a wise person once said,
00:12:56
um you only know that you're
00:12:59
we're that you're truly wealthy when you
00:13:01
know you've had enough. And
00:13:03
unfortunately, many people
00:13:05
in boardrooms, many of the people we
00:13:07
work with
00:13:08
and many of the organizations do not
00:13:10
know the answer to that question. It's
00:13:12
always J. D. Rockefeller's answer, just
00:13:15
a little more.
00:13:17
And that creates, I think, a real
00:13:19
challenge, a fundamental moral purpose
00:13:22
challenge for all boards. Doesn't matter
00:13:24
what sector, private
00:13:26
public, third sector, social
00:13:28
enterprises.
00:13:30
We are facing poly crises as
00:13:34
um as a species because we are hooked on
00:13:38
we're we're off our faces on more.
00:13:41
And we have a philosophy of want not
00:13:43
need. And wants are by definition
00:13:46
infinite.
00:13:47
So, I think it's a a very complex
00:13:50
answer. So, partly lived experience.
00:13:52
Uh so, that's the past. I think people
00:13:55
in the present actually need to look to
00:13:57
the future and ask themselves the
00:13:58
questions. I mean, most board members
00:14:01
that you and I work with
00:14:03
are parents of teenagers, sometimes
00:14:05
grandparents. I often ask them the
00:14:07
questions, "What sort of world do you
00:14:08
want your
00:14:09
your teenage children and if they're
00:14:11
older
00:14:12
your grandchildren to grow up in?"
00:14:14
Because if we carry on like this,
00:14:16
if we're not asking fundamental purpose
00:14:19
questions about how are we actually how
00:14:22
we how are we and our organization
00:14:25
helping to create a sustainable
00:14:26
environment for Homo sapiens on Earth,
00:14:29
then um
00:14:31
it doesn't matter what decision you
00:14:32
make, you're going to get it wrong if
00:14:35
you haven't asked that fundamental
00:14:36
purpose question.
00:14:38
What role
00:14:40
did fear or politics kind of play in the
00:14:44
experiences that you had of boardrooms
00:14:46
and those gritty decisions that CEOs and
00:14:50
teams have had to make? So, I think
00:14:52
that's a that's a great question and I
00:14:55
have to answer it in two parts. So, fear
00:14:57
first of all, fear is a really important
00:15:00
driver for us. It enables us to survive
00:15:03
in a hostile world.
00:15:06
But unfortunately, the workplace and
00:15:09
includes boardrooms
00:15:11
is primarily driven by fear.
00:15:14
And that that fear comes in various
00:15:16
guises.
00:15:17
Um the principal one in business for
00:15:20
leaders and managers and directors and
00:15:23
NEDs and SEDs and chairs and CEOs is
00:15:27
status anxiety.
00:15:30
How am I going to be remembered? Am I
00:15:31
going to make such a catastrophic
00:15:33
mistake
00:15:35
that I might lose my knighthood
00:15:37
or I'll lose all self-respect.
00:15:41
Um another fear is
00:15:43
um
00:15:45
perhaps
00:15:46
uh you know, not having enough.
00:15:48
Another fear is being shown perhaps
00:15:51
asking stupid questions which are not
00:15:53
stupid. They're really smart,
00:15:55
but they sound stupid because they're
00:15:57
not often asked in the boardroom.
00:15:59
And one of the things that boards I
00:16:01
still think need to engage in is much
00:16:04
greater um diversity of thought.
00:16:08
So there's a lot of work done on gender
00:16:10
and
00:16:11
diversity, ethnic diversity, and so on.
00:16:15
But where are the people who like me are
00:16:18
neurodivergent?
00:16:20
Um and see things differently and
00:16:22
experience things differently.
00:16:25
Um and so there's a real fear of
00:16:27
speaking up. There's a real fear of
00:16:29
speaking the truth.
00:16:31
Um
00:16:32
you and I have both experienced board
00:16:34
papers being prepared
00:16:36
and they go through umpteen committees
00:16:38
in the organizations and they're
00:16:39
sanitized
00:16:41
by the time they get to the board
00:16:42
because no one wants to ask the real
00:16:46
question. No one wants to dis- declare
00:16:49
the real truths behind
00:16:52
uh the question, the decision that needs
00:16:54
to be made
00:16:56
because no one people, you know, don't
00:16:59
like to bring bad news.
00:17:02
People don't like to bring real options
00:17:04
to the board. They like to bring a
00:17:06
recommendation.
00:17:08
And that's already closed down at least
00:17:10
half the discussion
00:17:12
that needs to be had.
00:17:15
So fear operates in a number of ways.
00:17:17
Politics is deeply linked to that. And
00:17:20
politics is is a real challenge because
00:17:24
it's about the use and abuse of power.
00:17:28
Um
00:17:30
one of the things I've said
00:17:32
uh is that
00:17:35
compliance is a false god.
00:17:39
Because compliance only works because
00:17:42
people are afraid of consequences. So,
00:17:44
they're afraid of
00:17:46
um if you like, those in power saying,
00:17:49
"You broke the rules. You didn't follow
00:17:50
process. Therefore, you're at fault."
00:17:53
And compliance has now become
00:17:58
a
00:17:59
an inadequate substitute for conscience.
00:18:03
So, politics and the use and abuse of
00:18:06
power in the boardroom and throughout
00:18:09
organizations
00:18:11
is quite toxic and really dangerous.
00:18:15
And so, by having people who are willing
00:18:18
to stand up and say, and there's a a
00:18:21
technique that I teach them for this, so
00:18:22
it's safer.
00:18:25
Um I really don't think that's right
00:18:27
because of X, Y, and Z.
00:18:29
Now, if they're coming outside of this
00:18:32
socioeconomic
00:18:34
educated class of
00:18:36
of a board of executive non-executive
00:18:39
directors
00:18:40
um that's really hard to say, but
00:18:44
when they put themselves in the shoes of
00:18:48
a customer
00:18:49
or a colleague or a regulator or the
00:18:52
taxman
00:18:54
it's amazing. That gives you a suit of
00:18:56
armor, so you can actually challenge
00:18:59
um you know, with with impunity, if you
00:19:02
like. And and the technique is very
00:19:04
simple. You just say as a NED
00:19:07
um
00:19:08
"If I was a customer, I might be
00:19:11
thinking this about this discussion or
00:19:13
um you know, if I was a shareholder and
00:19:16
I I'm not saying a big institutional
00:19:18
shareholder, I'm talking about grannies
00:19:21
and granddads who rely on us. The retail
00:19:24
shareholders who are ultimately behind
00:19:25
all this.
00:19:27
Who are looking at their their pension,
00:19:30
their occupational pension and it's
00:19:32
shrinking in value
00:19:34
as inflation rises and so on.
00:19:37
Um are we thinking of them? Who's
00:19:39
speaking up for them?
00:19:41
And so you don't have to say it's me
00:19:43
saying this. What you say is and
00:19:45
obviously that's where the devil's
00:19:46
advocate comes from. And um
00:19:49
I often have had to play that part.
00:19:51
Unfortunately, sometimes it means that
00:19:53
my consulting contract has not been
00:19:55
renewed or terminated because I've been
00:19:57
too awkward.
00:19:58
But I'm always glad I've done it. I've
00:20:00
never regretted speaking the truth from
00:20:05
another
00:20:06
person's perspective.
00:20:08
And if that means that my work with that
00:20:11
board or with that organization
00:20:13
terminates, then so be it. There are
00:20:16
others.
00:20:17
Yeah. Do you think that that fear and
00:20:19
politics then, if we're saying that it's
00:20:21
it happens at all kind of
00:20:23
decision-making stages, by the time it
00:20:25
gets to the board, things could easily
00:20:27
have been sanitized to such an extent
00:20:29
because if the person at the let's say
00:20:31
the bottom of the food chain is
00:20:34
sanitizing what they are saying to the
00:20:35
next person up, fear of or politics of,
00:20:38
and then by the time it gets to the
00:20:39
board, there could be a a lot of
00:20:42
information missing for one or a lot of
00:20:45
misinformation or sanitized reports.
00:20:47
What sort of impact does that have
00:20:49
because we've seen that in we've seen
00:20:51
that in corporate scandals right in
00:20:52
collapse and that's the we didn't know,
00:20:54
the board were not aware.
00:20:56
How do we how do we address that sort of
00:20:58
thing?
00:20:59
>> [clears throat]
00:20:59
>> So you're absolutely right and it's so
00:21:01
sanitized by the time it gets to board
00:21:04
because everybody's scared of their boss
00:21:08
um thing. You you can't say that.
00:21:11
They'll freak out.
00:21:13
Um
00:21:14
>> that's true? I do. I know I've seen it.
00:21:17
Okay. I've seen it. And I And I've often
00:21:18
said, "I'll take it."
00:21:20
I'll take it. They can shoot me. I don't
00:21:22
care.
00:21:23
Because it's too important.
00:21:25
And what reaction did did those sorts of
00:21:28
things have in the boardroom?
00:21:30
Ultimately, they were grateful. But too
00:21:31
often, um
00:21:34
as you'll know from my background, I've
00:21:35
been pulled in after it's after the bad
00:21:37
things have happened.
00:21:39
So, financial scandals. So, yes, it does
00:21:43
get sanitized.
00:21:45
And the solution is boards need to get
00:21:48
out of the boardroom.
00:21:50
Get out of their board packs. Get out
00:21:52
off diligent.
00:21:53
Get out of their board packs and
00:21:55
actually go around the business.
00:21:57
Go and visit retail
00:22:00
outlets. Go and visit contact centers.
00:22:03
Go and meet customers.
00:22:05
Find out what's really going on.
00:22:08
Talk to employees. Talk to colleagues.
00:22:10
Now, when I've done cultural audits,
00:22:13
um I do it as an anthropologist would do
00:22:15
it. I don't sort of have a focus group
00:22:18
with
00:22:19
pre-prepared vanilla questions that
00:22:21
people are prepared
00:22:23
to, you know, are willing to ask, but
00:22:25
not the difficult ones. I create an
00:22:27
environment where it's normally
00:22:28
one-to-one or one-to-a-few. We have a
00:22:30
chat. And for some reason, people trust
00:22:33
me and they open up. And that's true
00:22:35
also for leadership teams.
00:22:37
When I'm in the room,
00:22:39
they very quickly realize because I I
00:22:41
talk truths. I speak truth to them.
00:22:44
And it's almost like an unburdening
00:22:46
where they just come out with the truth.
00:22:49
It's like a
00:22:50
ah.
00:22:51
And that's where you feel you find out
00:22:53
what's going wrong. And the trick,
00:22:55
certainly for non-executive directors,
00:22:56
is to create that that safety to get out
00:22:59
of that comfort zone, to get out of the
00:23:02
sanitized
00:23:03
story that they've been given
00:23:07
and actually go and really see what's
00:23:09
going on and hear what's going on. Mhm.
00:23:12
Um I've been in situations though where
00:23:16
we have
00:23:17
I've been in organizations where we've
00:23:19
done exactly that. But the questions and
00:23:22
the people to talk to have been
00:23:23
sanitized.
00:23:24
>> Mhm. Which is another is another
00:23:26
challenge of itself because then there's
00:23:29
only certain answers that come back and
00:23:32
we don't talk to that person over there
00:23:34
on that production line because
00:23:36
there are a variety of different
00:23:37
answers. They don't speak English. They
00:23:39
don't understand what's going on. But
00:23:41
actually they may actually just speak
00:23:42
the truth to power and actually that's
00:23:45
too challenging.
00:23:46
How do How would a non-exec director
00:23:49
kind of identify those sorts of things
00:23:50
cuz that's very challenging, right? I
00:23:53
think they have to insist that they they
00:23:55
choose who they're going to talk to.
00:23:57
Yeah.
00:23:58
And do it using random. You know, random
00:24:01
system.
00:24:03
Just get a random number generator to
00:24:05
spew out employee numbers.
00:24:08
Um and don't let anyone massage and
00:24:11
micromanage the process.
00:24:14
Uh
00:24:14
you know, when you see that happening,
00:24:16
you know there's a problem. So when you
00:24:18
see that process of sanitization and
00:24:20
micromanagement,
00:24:22
you know that the organization is
00:24:24
designed to hide things.
00:24:26
Which is why we get all the scandals
00:24:28
we're dealing with my with now. Royal
00:24:29
Mail, Thames Water, all the water
00:24:31
companies. A lot of the utilities, a lot
00:24:34
of the things that we can go back over
00:24:36
the last 20 years or longer and see all
00:24:38
these scandals. PPI misselling, we've
00:24:40
now got car finance misselling. These
00:24:43
are multi-billion
00:24:45
pound scandals, but crucially people are
00:24:47
dying as a result of boards making bad
00:24:50
decisions. So
00:24:51
the other thing I'd say is if you want
00:24:53
to really find a reason for doing your
00:24:56
job properly is don't think about the
00:24:59
money, think about people losing their
00:25:01
lives.
00:25:03
Because ultimately that's what it is.
00:25:05
How many postmasters committed suicide
00:25:07
as a result of wrongful prosecutions?
00:25:11
Allegedly, um and so on. So, you know,
00:25:15
I think there is a moral obligation
00:25:18
for board members, particularly the
00:25:19
non-executive directors, to get out
00:25:22
there and see it for themselves without
00:25:25
having this, you know, massaged vanilla
00:25:29
stuff that they're presented with. And
00:25:31
if it does look like that, then smell a
00:25:33
rat. Mhm. As such, make it human. It's
00:25:36
about people.
00:25:37
>> It's make it it's messy. Humanity is
00:25:39
messy, but it's joyful. And not only do
00:25:42
you see and hear the pain, you also see
00:25:44
and hear genuine fun
00:25:47
and joy in the organizations.
00:25:50
And And that makes people feel good. So,
00:25:52
you know, my whole approach to life is
00:25:54
that
00:25:55
life is a is a contradiction. Life is
00:25:58
and work working life and life
00:26:01
is um you know, a lot of moments of not
00:26:04
much happening, but there are moments of
00:26:06
joy and there are moments of deep
00:26:08
sadness and pain. That's what life is
00:26:11
about. That's what working life is
00:26:12
about.
00:26:13
If If we try and massage that view and
00:26:17
present to ourselves and to our
00:26:21
shareholders, our our stakeholders
00:26:24
this massaged, you know, and we haven't
00:26:26
talked about annual reports yet.
00:26:29
You know, um
00:26:30
people you know, when they really see it
00:26:32
as it is and you can often see this
00:26:34
actually in other investors. So, in in
00:26:36
terms of private equity, they in a way
00:26:38
are much more attuned to this because
00:26:40
they have to get in and out pretty
00:26:41
quickly. They can't afford to wait for
00:26:44
10 years for something to roll out.
00:26:46
They're only at it for three.
00:26:48
Um and smart, you know, when they do
00:26:50
their due diligence, they're not just
00:26:51
looking at the numbers. They're doing a
00:26:53
deep dive on this the organizational
00:26:56
psyche and what's really going on. And
00:27:00
they employ psychologists
00:27:02
and sociologists and anthropologists and
00:27:04
occasionally philosophers to do it as
00:27:06
well.
00:27:08
Yeah, big questions.
00:27:10
You've studied how leaders think about
00:27:13
right and wrong.
00:27:15
What does good moral judgment look like
00:27:17
in practice at board level? Can you go
00:27:20
into some more detail? Yeah, absolutely.
00:27:22
So, um
00:27:24
within the Ethicability framework, which
00:27:26
is 20 steps, it's one statement and then
00:27:28
19 questions. Yeah, this is this is your
00:27:31
book, right? Indeed, thank you. And, um
00:27:35
uh ins- inside it is what I call the
00:27:37
right framework. So, the acronym is r i
00:27:39
g h t.
00:27:42
Um and that's the short version. So, the
00:27:45
letter R stands for rules.
00:27:48
So, when we're starting to make a moral
00:27:50
decision, you start off with the fact
00:27:51
that
00:27:53
most or every workplace has a set of
00:27:56
rules and laws and processes that have
00:27:58
to be followed.
00:28:00
Not slavishly, which is the interesting
00:28:03
thing, but the first thing you say is
00:28:05
what must we do and what must we not do
00:28:09
in terms of the rules. But, that will
00:28:11
not tell you what's right. That's the
00:28:13
compliance trap.
00:28:15
And I've seen so many scandals caused by
00:28:17
people simply following orders.
00:28:21
Mhm. And following the rules. So, the
00:28:24
next one you go to is what if you feel
00:28:26
that the rules don't cover this
00:28:28
situation or the rules are in
00:28:30
contradiction, which they often are?
00:28:34
And so, for example, you might have a
00:28:36
company policy, which actually you
00:28:38
discover is at odds with um
00:28:41
human rights.
00:28:43
Or, um you know, either at your UK,
00:28:46
European, or at international level.
00:28:50
So, the I, the letter I, is the first
00:28:53
letter of the word integrity.
00:28:55
And integrity is the values word. So,
00:28:58
there's a lot of debates amongst moral
00:29:01
philosophers about what the word
00:29:02
integrity means.
00:29:04
But, the different definition I share is
00:29:06
integrity
00:29:08
is the word that summarizes all the
00:29:10
moral values we believe in, and people
00:29:13
can see those moral values through our
00:29:15
actions and behaviors.
00:29:17
So, in that sense, the word integrity
00:29:19
is, if you like, the basket within which
00:29:21
our moral values sit.
00:29:24
But, it's not just sitting there. It has
00:29:25
to be a set of lived values.
00:29:28
And what's challenging here with moral
00:29:32
values is that most organizational
00:29:34
values aren't moral values. They're
00:29:37
things that the community or the group
00:29:40
values, but they're not moral values.
00:29:42
So, moral values are quite limiting
00:29:44
quite limited. So, the top three are
00:29:47
love, or compassion, or kindness, number
00:29:49
one.
00:29:51
So, that's our humanity, our care for
00:29:53
others.
00:29:55
People might call it empathy, weak word,
00:29:57
compassion is the strong word.
00:30:00
The next one is fairness. And we've
00:30:02
talked about fairness and the importance
00:30:05
of each according to their needs.
00:30:09
And then the third one is wisdom.
00:30:12
And wisdom is the thing that's lacking
00:30:15
when you can't trust the facts that's be
00:30:18
that are being shared with you in your
00:30:19
board packs.
00:30:22
You can't be wise if you don't have the
00:30:25
truth.
00:30:28
So, that's one of the questions in in
00:30:30
the wider ethical ability framework, of
00:30:32
what are the facts?
00:30:35
So, that's the I for integrity.
00:30:37
G is for good, H is for harm. So, I'm
00:30:40
going to take them together because when
00:30:42
we're making a moral decision, we are
00:30:44
going to see winners and losers.
00:30:46
People where the outcome is good and
00:30:49
people where the outcome is harmed, and
00:30:51
that's life.
00:30:53
What we have to do is to maximize the
00:30:56
good and minimize the harms.
00:30:59
It's not a perfect world. Whenever we're
00:31:01
making choices, there are going to be
00:31:03
plusses and minuses. What we have to do
00:31:06
is to see that those people who might be
00:31:09
harmed, we minimize it and we compensate
00:31:12
for it in some way.
00:31:14
And we, crucially,
00:31:16
point we made earlier, we discussed
00:31:18
earlier, was get them involved in the
00:31:19
decision because they're grown-ups
00:31:22
and they have a right to talk about
00:31:24
that.
00:31:25
So, that's G and H. The final one is T
00:31:27
for truth. And when I was constructing
00:31:29
this acronym,
00:31:30
I thought, "What's the word I need
00:31:32
for for T?" And it is the word truth.
00:31:37
So, the word truth is what a lot of your
00:31:40
listeners will
00:31:42
know as the front front page. That's the
00:31:44
the headline test in news media.
00:31:48
And I've I've run um
00:31:51
moral reasoning sessions with a
00:31:52
journalist
00:31:54
who is there at the back of room. So,
00:31:55
they're making a moral decision
00:31:57
about a, you know,
00:31:59
about a a big a big issue they're
00:32:02
facing.
00:32:03
And the journalist is listening
00:32:06
to the teams presenting their particular
00:32:08
decision.
00:32:09
And he's typing a headline live. I mean,
00:32:11
it's not going live, but it's there on
00:32:14
the big screen.
00:32:15
And it's hilarious because what the
00:32:17
journalist is able to do is to get the
00:32:19
essence of the insanity
00:32:22
or the awfulness of the decisions that
00:32:24
being proposed in a way that's safe and
00:32:27
it's fun
00:32:28
because, you know, people say, "Oh my
00:32:30
goodness, I hadn't thought about it like
00:32:32
that. Is that how it's going to play
00:32:34
out?"
00:32:35
And I'll say to to boards and and
00:32:38
leadership teams making decisions,
00:32:41
imagine that I want one of you to play
00:32:42
the journalist, an undercover
00:32:44
journalist.
00:32:45
And I want you to realize it's not just
00:32:47
your decision, it's the reasoning behind
00:32:49
your decision
00:32:51
that actually counts and matters. And in
00:32:53
fact, you can make a mistake.
00:32:55
You can make the wrong decision because
00:32:57
you don't know enough of the facts. But
00:32:59
if you make that decision with
00:33:01
integrity,
00:33:03
then people will forgive you for it cuz
00:33:04
we all make mistakes. We all make We all
00:33:07
fail from time to time. But if we with
00:33:10
integrity,
00:33:12
then we're forgiven.
00:33:14
And then we put it right.
00:33:16
I talk about that part of it quite a
00:33:18
lot, particularly when it comes to good
00:33:21
governance, which I don't see as
00:33:22
bureaucracy. I see that as as you say,
00:33:24
that moral framework around how you make
00:33:26
the decisions and the guardrails, let's
00:33:28
say, so people know where they're where
00:33:31
they're going. But I think that that's
00:33:33
so
00:33:34
vitally important because as you say, if
00:33:38
you do things and the organization, the
00:33:40
people are known for doing the right
00:33:42
thing, then that forgiveness level and
00:33:45
sometimes that bounce back from failure
00:33:49
or a trip or a stumble or whatever you
00:33:50
want to call it, can actually increase
00:33:53
their reputational value afterwards cuz
00:33:55
they think, you know what? They owned
00:33:57
it. They accepted what happened. They're
00:34:00
doing something about it and they
00:34:02
genuinely want to do something about it.
00:34:03
It's not just lip service. It's not just
00:34:04
because oh dear, it's hit the front page
00:34:06
and now we have to do something. And
00:34:08
those bits actually build, I think, on
00:34:11
some of those people's careers and
00:34:13
actually the defining moments for them
00:34:15
and for their organization.
00:34:16
Absolutely right and
00:34:18
if Neds talk to complaints teams and see
00:34:21
the power of a good resolution,
00:34:25
you're turning a disgruntled customer
00:34:27
into an advocate overnight by
00:34:29
by saying, we messed up,
00:34:32
we're really sorry and I'll tell you how
00:34:33
sorry we are. We're actually going to
00:34:35
compensate you for this." So, for
00:34:38
example, uh John Lewis partnership used
00:34:41
to have a situation. I don't know if
00:34:43
they have it anymore. I might be wrong.
00:34:45
But, if you bought something, you know,
00:34:47
uh a vegetable which which is actually
00:34:49
off,
00:34:50
they'd give you a replacement item and
00:34:53
your money back.
00:34:55
And that level of, if you like, um
00:35:00
confession,
00:35:03
forgiveness and contrition, which many
00:35:05
religions have, is something that most
00:35:08
organizational cultures don't have.
00:35:12
Because
00:35:13
the system, the organizational system,
00:35:17
tends to want to identify someone who
00:35:19
can carry the blame as long as it's not
00:35:21
me.
00:35:22
And therefore, there's no learnings.
00:35:25
There's one sector where this is doesn't
00:35:27
happen because lives are at stake, and
00:35:28
that's civil aviation.
00:35:30
And the uh when there's a near miss or
00:35:33
an accident, the civil aviation
00:35:35
authority in the UK, I think it's true
00:35:37
across the world, have a no-blame
00:35:39
investigation. They do not assume any
00:35:41
blame. They just want to get to the
00:35:43
facts.
00:35:44
Then if someone has acted recklessly,
00:35:46
then there's an accounting for it.
00:35:48
But, if you start any investigation with
00:35:52
with the intent that I just need to
00:35:54
understand what we all did wrong,
00:35:57
because
00:35:58
workplaces, organizations are systems.
00:36:02
They're complex human social groups.
00:36:06
No one person is is or it's very rare
00:36:09
that one person is responsible on their
00:36:12
own.
00:36:13
And you and I will have heard
00:36:15
conversations, have seen investigations,
00:36:18
where someone somewhere in the
00:36:20
organization, in fact, lots of people
00:36:21
knew what was going on,
00:36:23
but couldn't be heard, or, you know, by
00:36:26
the people who needed to hear that.
00:36:29
And some of this, you know, the
00:36:30
scandals, ongoing scandals and historic
00:36:32
scandals,
00:36:34
once the inquiry is finished,
00:36:36
hundreds, sometimes thousands of people
00:36:38
knew what was going on, but their voices
00:36:40
were stifled
00:36:42
because the system does not allow for
00:36:44
truth to come out in a way that is
00:36:47
healthy.
00:36:50
Mhm.
00:36:50
And how do you think that organizations
00:36:53
can help build that? Because it comes
00:36:55
from culture, right? It comes from those
00:36:58
people at the top. I know from my own
00:37:00
experiences as a leader,
00:37:02
I
00:37:03
when things go wrong, which they do,
00:37:06
you I have that open conversation with
00:37:08
somebody and and also I think it's
00:37:10
really important to amongst those people
00:37:13
to admit your own part in in the
00:37:16
downfall of whatever that is and say,
00:37:18
"Actually, if I had done this or if I'd
00:37:20
asked that question, then we wouldn't be
00:37:21
here, but everyone else, let's also open
00:37:24
up and say what is in that and that
00:37:25
allows for learning and for growth. And
00:37:28
I think that's one of the biggest
00:37:30
things. That's what humans are all
00:37:32
about, right? Right from as soon as
00:37:33
we're born, that that is it. We learn
00:37:36
from our mistakes and hopefully we
00:37:37
improve and we get better and we
00:37:39
progress.
00:37:40
I think I think the answer is is
00:37:42
embedded in in your question and that
00:37:45
um
00:37:46
it doesn't matter how seen senior you
00:37:49
are in the organization, how much power
00:37:51
you're seen to have. In fact, the more
00:37:53
power you have, the more you have to
00:37:55
admit mistakes.
00:37:57
And also admit you don't know. The don't
00:38:00
knows are important. I remember another
00:38:03
situation where um
00:38:06
a CEO
00:38:07
uh at a time of serious cost cutting had
00:38:10
the team had done everything they
00:38:11
thought they could.
00:38:13
He went to see the group CEO and the
00:38:15
group CFO and he came back in the room
00:38:17
and said, "We need to find another 50
00:38:20
million in savings.
00:38:22
It's just not and I don't know where to
00:38:24
begin.
00:38:26
A CEO saying to his team, I don't know
00:38:29
where to be We've We've We've done it.
00:38:32
And what happened? They didn't say stab
00:38:34
him in the front,
00:38:35
let alone stab him in the front in the
00:38:37
back.
00:38:38
They all said, "Okay, let's let's go
00:38:40
again. Let's do it again. Let's get
00:38:42
other people in the room. We've
00:38:43
obviously missed stuff. We're bound to
00:38:45
have missed stuff. Let's do it again."
00:38:48
So,
00:38:49
so the answer to your question is
00:38:51
everyone in the organization in any
00:38:53
position of leadership needs to model
00:38:55
that behavior all the time.
00:38:59
And and say more often, I don't know or
00:39:02
I messed up rather than um this
00:39:05
narcissistic
00:39:07
uh dark traits that you see in too many
00:39:10
um leaders in organizations. Less so, I
00:39:12
would say the research says less so at
00:39:14
board level, by the way, because most
00:39:17
NEDs are relaxed a bit and not trying to
00:39:18
prove anything.
00:39:20
But um we might come back to that. But
00:39:23
really just um
00:39:25
uh I think modeling that behavior and
00:39:27
when I've been involved in culture
00:39:29
transformation programs and I've been
00:39:31
involved in designing
00:39:33
major culture transformation company
00:39:35
programs, it's based on
00:39:38
moral values, moral purpose, moral
00:39:40
reasoning,
00:39:42
but it's actually based then executed
00:39:44
through leadership action.
00:39:46
It's not what leaders say that people
00:39:49
follow. It's what they do.
00:39:52
And
00:39:53
when internal comms teams get that and
00:39:57
when boards stop agonizing over words
00:40:00
and people actually say,
00:40:03
"I'm watching my leader
00:40:05
and she or he is behaving in a way that
00:40:08
inspires me."
00:40:10
The engagement you get, the
00:40:11
transformation in culture can be
00:40:13
overnight. I'm not a believer that
00:40:15
cultural transformation takes years. it
00:40:17
does because people don't understand it.
00:40:20
And And when people look at me and say,
00:40:23
"Mhm, I don't think you're that's right,
00:40:24
Roger." I say, "Well,
00:40:26
when you were working
00:40:28
and your boss changed, so your old boss
00:40:31
left and a new boss came in and they
00:40:32
were very different. How quickly did the
00:40:34
culture in your team change or your
00:40:37
division
00:40:38
or your function?"
00:40:39
And the answer is virtually overnight.
00:40:42
So, that tells us that culture changes
00:40:46
quickly through leadership action and
00:40:49
behavior.
00:40:52
And I think that's what
00:40:53
boards need to take on board and
00:40:55
executive boards as well.
00:40:58
Do you think
00:40:59
So, looking beyond boards, do you think
00:41:01
organizations
00:41:02
can grow morally over time? Do you think
00:41:05
that the experiences that organization
00:41:07
faces can change them or do you think it
00:41:09
always has to be, you know, a new face,
00:41:12
a fresh person in, a new perspective?
00:41:15
Uh, that's a really
00:41:18
good question.
00:41:19
Um,
00:41:21
there's two answers.
00:41:24
Uh,
00:41:26
the first answer is that you have to get
00:41:29
your design right. And by design, I mean
00:41:32
the organization has to be a safe place
00:41:35
for people to work. I just I don't mean
00:41:37
physical safety, that's a given, that's
00:41:39
that's a law.
00:41:40
But actually, we don't have a health and
00:41:42
safety law about people feeling safe
00:41:45
emotionally and mentally.
00:41:47
And I've argued for it for a long time
00:41:49
that only when
00:41:51
uh, managers can be prosecuted for
00:41:53
health and safety violations, for
00:41:55
bullying, and so on and so forth, will
00:41:58
that change.
00:42:01
So, the organization needs to be
00:42:03
designed as a safe community for people
00:42:06
to do their best. I mean, it's
00:42:08
economically illiterate to assume that
00:42:10
people will give of their best when
00:42:12
they're scared.
00:42:14
When we're scared,
00:42:16
our whole being is focused on
00:42:18
self-preservation, minimize minimize
00:42:21
harm, minimize losing my job.
00:42:24
The mental overload, the emotional
00:42:26
overload means that the job you're
00:42:28
supposed to be doing doesn't get done
00:42:30
very well.
00:42:31
But when someone feels inspired and
00:42:34
safe, the productivity goes through the
00:42:37
roof. I've seen it happen hundreds of
00:42:39
times.
00:42:41
So you need to get the design of the
00:42:43
organization right. But the second part
00:42:45
is, and this is something really
00:42:47
important that I think a lot of work
00:42:49
needs to be done,
00:42:51
is when people are hired, not just as um
00:42:55
non-executive directors, but executive
00:42:57
directors and all the way through as
00:42:59
leaders,
00:43:00
they need to be
00:43:02
assessed in terms of their moral
00:43:04
character.
00:43:06
And our research and other research
00:43:08
shows that too many leaders display what
00:43:11
psychologists call dark traits,
00:43:14
which are narcissism,
00:43:16
Machiavellianism,
00:43:19
and psychopathy.
00:43:21
So narcissism, narcissistic personality
00:43:23
disorder is the major one.
00:43:26
So people tend to be what has been
00:43:28
called business idiots. They're just
00:43:31
doing and saying everything for the
00:43:33
look.
00:43:34
They're not actually doing the job. They
00:43:37
will manipulate and use their
00:43:38
Machiavellian skills to manipulate the
00:43:42
the narrative.
00:43:45
And they're just in it for themselves.
00:43:48
Um
00:43:49
the the worst one obviously is the is
00:43:51
the psychopathic trait. And these aren't
00:43:53
clinical psychopaths, these are
00:43:55
subclinical psychopaths,
00:43:57
who actually do cannot empathize with
00:44:00
the pain
00:44:02
that colleagues are experiencing because
00:44:04
of their behavior,
00:44:06
um or the products that their customers
00:44:09
and the goods and services that
00:44:11
customers are buying and is harming
00:44:12
them.
00:44:14
Um,
00:44:15
and the research shows that for example,
00:44:17
15% of CEOs
00:44:20
are sub-clinical psychopaths.
00:44:22
So, what the hell are nominations
00:44:24
committees doing or I should say not
00:44:27
doing in terms of screening out people
00:44:29
with these dark traits?
00:44:31
Organizational psychologists can do
00:44:33
this.
00:44:35
You know, we can do this. I mean,
00:44:38
airlines screen pilots, airline pilots
00:44:41
for murder-suicide.
00:44:44
So, that they don't actually fly a plane
00:44:46
into the side of the house. We know
00:44:47
that's happened once.
00:44:49
If we can do it for airline pilots and
00:44:50
bus drivers, surely we can hire people
00:44:54
who are people of good character
00:44:57
first and then and there's a as a lovely
00:45:00
saying, um,
00:45:02
the former chairman of Porsche cars,
00:45:04
Peter Schutz, said, "Hire character,
00:45:06
train skill."
00:45:08
What tends to happen
00:45:10
in boards and in workplaces and in other
00:45:13
leadership teams
00:45:15
is people tend to hire skills and try
00:45:18
and train character.
00:45:19
It's not going to work. By the time
00:45:21
we're in our early 30s, our character is
00:45:23
pretty much set
00:45:25
unless we suffer an extreme trauma.
00:45:28
Mhm.
00:45:29
So, there's two answers to your
00:45:30
question. One is, yes, you have to
00:45:31
create a safe culture for people to be
00:45:34
their best. The other thing is stop
00:45:36
hiring people with dark traits. Hire
00:45:39
people of good character.
00:45:41
And if you already have one of those
00:45:43
people in your midst,
00:45:45
there's obviously there are options to
00:45:48
move them on to all those sorts of
00:45:50
things.
00:45:51
But if you can't, how how do you
00:45:54
navigate that? Do you just make a
00:45:56
decision that you just you have to step
00:45:57
away?
00:45:59
Oh, if if don't have the power to remove
00:46:01
them, well, if you're a board, you do.
00:46:03
Indeed.
00:46:04
>> But if it's the chair, Mhm. then you've
00:46:06
got a problem. If it's the CEO, you've
00:46:07
got a problem. If it's a CFO, you've got
00:46:10
a problem.
00:46:12
So, that's why the appointment of people
00:46:14
with the most power in the organizations
00:46:17
have to be doubly screened.
00:46:20
And that's down to the people with power
00:46:22
in the organization, which is down to
00:46:24
the shareholders because corporations
00:46:27
are plutocracies. In other words, power
00:46:29
comes from money. It doesn't come from
00:46:33
uh personal identity. It's not a demos,
00:46:34
it's not a democracy.
00:46:36
It comes from from money. And it's the
00:46:38
people with money who have to say,
00:46:40
"Okay, if we don't do the right thing,
00:46:44
money is simply a trust a promise we
00:46:46
trust. If we break our promises and we
00:46:48
destroy trust, we've just destroyed the
00:46:50
value in our company. And that's
00:46:51
ultimately where a corporate scandal
00:46:53
will take you."
00:46:54
Mhm.
00:46:55
And what sort of
00:46:57
um interrogations, you touched on it
00:46:59
lightly, what sort of interrogations
00:47:01
should boards be making of these
00:47:03
particular leadership roles when they
00:47:05
come in as part of their onboarding
00:47:07
process or even before then, screening
00:47:09
during interview before they even have
00:47:11
an offer on the table? Yeah, well, it's
00:47:13
it's it doesn't come through interviews.
00:47:14
In fact, interviews are pretty bad at at
00:47:17
selecting the right people. You need to
00:47:19
employ forensic psychologists who will
00:47:22
then screen people. They'll go through a
00:47:23
whole battery of tests. So,
00:47:25
I know that happens. You know, they uh
00:47:28
boards do employ psychologists.
00:47:30
Um
00:47:31
to but they're tending to see if someone
00:47:33
can read a balance sheet, profit and
00:47:35
loss account, can write a report. Well,
00:47:38
you know, that's a lot less important
00:47:40
than having someone who's a fully
00:47:42
paid-up member of the human race and is
00:47:44
someone we can trust
00:47:46
and someone who gives a damn about
00:47:48
anything other than themselves.
00:47:51
You can screen for that. And if you find
00:47:53
someone who's got observable dark
00:47:55
traits,
00:47:57
then you don't you they don't go any
00:47:59
further. That's it.
00:48:01
That's if you like the blackball
00:48:02
situation. They will not be part of our
00:48:05
community.
00:48:06
And do you think those people can ever
00:48:07
change?
00:48:09
Um yes, they can unless they're a
00:48:11
clinical psychopath.
00:48:13
So there is no way of treating clinical
00:48:16
psychopaths, which is why they're
00:48:18
they're normally jailed for life in a an
00:48:21
appropriate institution. In the UK, it's
00:48:23
Broadmoor.
00:48:25
Serial killers.
00:48:26
>> And hopefully they are not part of your
00:48:28
leadership team.
00:48:29
>> No, but subclinical can be changed,
00:48:33
but it requires a huge investment in
00:48:35
time and money, and most organizations
00:48:38
just aren't equipped to do it. So if
00:48:40
you've made a mistake, then you need to
00:48:42
manage them out in a in a in the right
00:48:46
way, I should add.
00:48:48
Yeah, absolutely.
00:48:50
Can you take us inside a moment when a
00:48:53
boardroom was truly tested, and what
00:48:55
shifted the conversation of that fear to
00:48:59
courage? It's difficult for me to talk
00:49:01
about individual moments because
00:49:04
most of my work is as an educator rather
00:49:07
than a coach.
00:49:09
So there's lots of I've run lots of
00:49:12
laboratory workshops where I've given
00:49:15
them difficult decisions
00:49:17
to practice on,
00:49:20
but I'm not someone who sits in a
00:49:21
boardroom
00:49:22
and is there as the court jester.
00:49:25
Um What do you think is some of the
00:49:27
hardest decisions then? If you've given
00:49:29
them examples, what are some of those
00:49:32
hard ones that people humans just
00:49:34
generally find very tricky, even the
00:49:36
best? And in a way these safe
00:49:40
hypothetical ones are the best because
00:49:43
people relax a bit.
00:49:44
>> Mhm.
00:49:45
And
00:49:46
and what's interesting for anyone for
00:49:49
them to reflect on themselves,
00:49:51
so as part of this education process, so
00:49:55
I I I teach them how to make a good
00:49:57
decision, the right decision.
00:49:59
Then they start practicing on some safe
00:50:03
hypothetical dile- dilemmas. And then I
00:50:05
get them to critique themselves.
00:50:07
I normally break them up into two or
00:50:10
three or four groups.
00:50:12
Which is a great way of making
00:50:13
decisions. So, boards normally are too
00:50:15
big to have a
00:50:17
a single conversation that has meaning.
00:50:19
So, I I break them up into threes and
00:50:20
fours.
00:50:22
The same question, and it's funny how
00:50:23
they'll come up with slightly different
00:50:25
answers. And you bring them together at
00:50:26
the end. Anyway.
00:50:27
So, [snorts]
00:50:28
the dilemma that is the most powerful
00:50:32
that you that I get them to write is
00:50:34
what's called the letter of last resort.
00:50:37
Okay.
00:50:37
>> Now, the letter of last resort is
00:50:39
written by every British Prime Minister
00:50:42
the moment after they enter 10 Downing
00:50:44
Street.
00:50:46
So, they have say hello to the cabinet
00:50:47
secretary, all the staff. Then the
00:50:49
cabinet secretary takes them into the
00:50:52
cabinet room, sits them down
00:50:55
with a plain paper and a fountain pen or
00:50:58
a Sharpie pen or whatever.
00:51:00
And the first job is to write the letter
00:51:02
of last resort.
00:51:04
Three copies are made, four copies are
00:51:07
made, and they go to each of our
00:51:09
nuclear-powered
00:51:11
Trident
00:51:12
submarines, our Vanguard class
00:51:14
submarines,
00:51:15
which hold our nuclear deterrent.
00:51:18
And the letter of last resort is only
00:51:21
opened by
00:51:23
the commander of that boat
00:51:25
in the event that Britain's been
00:51:26
attacked by nuclear weapons, and there
00:51:29
are there is no communication from
00:51:32
government.
00:51:33
Basically, Britain's a pile of rubble
00:51:36
and smoking ash.
00:51:38
And you've got a Vanguard class
00:51:40
submarine in the middle of the Atlantic
00:51:42
Ocean running silent.
00:51:45
What do you do?
00:51:47
So, they they It's a big question.
00:51:49
>> And you can't think of a bigger question
00:51:50
because we're in the middle of a nuclear
00:51:53
exchange.
00:51:54
And there are a number of options which
00:51:58
we believe people consider. One is
00:52:00
retaliate.
00:52:01
Second, don't retaliate.
00:52:04
Uh third, put your
00:52:06
your boat under the command of an allied
00:52:09
nation that's still functioning. Or
00:52:11
four,
00:52:12
do something else. Mhm. Work it out for
00:52:14
yourself.
00:52:16
Can you imagine the level of moral
00:52:19
argument and outrage
00:52:22
and certainty that comes from that?
00:52:25
And what happens is a large minority of
00:52:28
people
00:52:30
want to act out of revenge.
00:52:33
Because it's natural.
00:52:35
You know,
00:52:36
my family
00:52:38
at home has just been destroyed. All my
00:52:39
friends, all my family.
00:52:42
I I want to get back. Well, first of
00:52:43
all, you need to know who's attacked.
00:52:46
You may not know.
00:52:48
There are more than one possible
00:52:51
enemies here.
00:52:52
So, assuming you do know,
00:52:55
then um how is the world going to be a
00:52:57
better place if you land uh you know,
00:53:01
the nuclear arsenal on this on the
00:53:03
Vanguard class submarine is very, very
00:53:06
destructive. It would knock out every
00:53:08
city in Russia.
00:53:11
You know, 100 million people plus would
00:53:13
die.
00:53:14
For what?
00:53:16
What purpose?
00:53:19
Mhm.
00:53:20
You know, killing everyone
00:53:22
in the you know, in the family who's
00:53:23
killed your family is not going to bring
00:53:25
them back.
00:53:26
And you've just perpetuated it. And
00:53:28
forget the fact that we've now created a
00:53:30
nuclear winter that
00:53:32
very few people are going to survive.
00:53:36
So that option is often very quickly
00:53:38
dismissed.
00:53:40
No retaliation is
00:53:43
um
00:53:45
uh the
00:53:46
I think the least
00:53:47
least popular. Putting yourself under
00:53:49
the command of an allied country does
00:53:52
get a lot of votes. Do something else
00:53:54
gets a lot of votes as well, but it's it
00:53:57
actually doesn't matter
00:53:59
because it's a game. It's a big game and
00:54:02
it's got huge outcomes.
00:54:05
But what I'm interested in what the
00:54:07
participants love to see is actually how
00:54:11
they all navigate that the biggest ever
00:54:15
moral dilemma we've got.
00:54:18
And it's actually happening right now,
00:54:19
not in terms of a nuclear exchange
00:54:22
but if you look at climate change, the
00:54:24
amount of energy we're putting into the
00:54:25
atmosphere is a slow nuclear explosion,
00:54:28
a slow nuclear winter or holocaust or
00:54:32
whatever it is.
00:54:33
But because it's happening in slow
00:54:35
motion, most people don't see and feel
00:54:36
it until they go to Italy and it's 50° C
00:54:39
to grade and their holiday's ruined.
00:54:42
But it's the quality of that discussion
00:54:45
that I think is the biggest learning
00:54:47
thing. The moral decision-making
00:54:49
framework or whatever framework you use
00:54:52
is less important than actually having
00:54:55
that conversation and seeing how your
00:54:58
colleagues react and people I never I
00:55:02
never knew you'd think that.
00:55:04
It's actually amazing. And you know, can
00:55:07
you imagine what it's like over a board
00:55:09
dinner when I set that as a discussion?
00:55:12
And it's uh certainly when a few glasses
00:55:15
of wine have been flowing, it gets quite
00:55:17
gritty. I bet it does. Quite quickly.
00:55:21
But that's but I think it's that, you
00:55:24
know, I I don't want to emphasize yes,
00:55:26
you we need a moral reasoning framework.
00:55:28
We need to be critical thinkers. We need
00:55:31
to be systems thinkers. But crucially,
00:55:33
we need to know how to debate and argue
00:55:36
with each other about things that matter
00:55:39
without fear or favor.
00:55:41
Does that make sense?
00:55:42
>> It does. And I guess that allows in this
00:55:46
scenario boards to have those
00:55:47
discussions about something that in
00:55:50
principle doesn't matter. There is no
00:55:52
right or wrong, but they can just stand
00:55:53
by what they believe in and what's in
00:55:55
their hearts.
00:55:56
>> Totally.
00:55:57
And it's also something which is quite a
00:55:59
good interview question. I can imagine.
00:56:01
Especially when you've got, you know, I
00:56:03
mean, we know that group interviews are
00:56:05
much more effective than one-on-one
00:56:06
interviews. Not that that happens at
00:56:08
board board level. Can you imagine a
00:56:10
group interview between a three
00:56:12
potential NED candidates, shortlisted
00:56:15
candidates? That could be fun. Does that
00:56:16
ever happen? No, that never happens. It
00:56:18
would be more like some TV show, I
00:56:20
guess.
00:56:21
>> I know. Maybe it should, Erica. Wouldn't
00:56:23
that be fun? It would definitely be
00:56:25
interesting. What is one habit um that
00:56:29
listeners could adopt this week that
00:56:31
would strengthen their moral compass? I
00:56:33
think the one habit
00:56:36
that your listeners
00:56:38
should practice
00:56:40
is the golden rule.
00:56:42
Put yourself in other people's shoes.
00:56:45
Imagine what it's like
00:56:47
to be your colleague across the board
00:56:49
table. Get to know your colleagues
00:56:51
really well. Get to know what's driving
00:56:53
them. Get to know the narrative, the
00:56:55
story of their lives.
00:56:57
It happens at all levels.
00:56:59
When we know that a colleague
00:57:01
who may be having who's got an elderly
00:57:03
relative who's who's dying,
00:57:06
when we know that, the way we interact
00:57:09
with them becomes different and better
00:57:12
and more caring.
00:57:14
When we can imagine what it's like to be
00:57:16
an employee on the factory floor in a
00:57:18
contact center,
00:57:20
uh
00:57:21
that's helpful.
00:57:23
Crucially, what it's like to be a
00:57:24
customer or a client or a patient
00:57:28
or, you know, just an ordinary member of
00:57:31
the public, get out of your privileged
00:57:33
bubble
00:57:34
and not just imagine it, go and
00:57:36
experience it.
00:57:39
So, put yourself in other people's shoes
00:57:42
is for me consistent with
00:57:45
this definition of of morality, which is
00:57:49
um
00:57:50
compassion is the basis for morality.
00:57:54
Understanding how someone is feeling and
00:57:57
then doing something about it is the
00:57:59
root of morality.
00:58:02
So,
00:58:03
I think there were a number of elements
00:58:05
that kind of came out of the interview
00:58:07
with Roger.
00:58:08
Um I think that fear in politics and the
00:58:11
impact that has on decision-making
00:58:13
across
00:58:14
everyone in an organization is big. We
00:58:18
obviously spoke about the impact that
00:58:20
that could potentially have on decisions
00:58:22
getting to the boardroom in the first
00:58:24
place and also those decisions in the
00:58:26
boardroom being heard for the true
00:58:29
nature of which they are being brought.
00:58:31
Um
00:58:32
we also unpacked a number of different
00:58:36
things around Roger's background and I
00:58:37
think it's always really interesting
00:58:40
when you find out more about somebody
00:58:43
how his lived experience of having been
00:58:45
a social worker in boroughs in London
00:58:48
brings through the humanity that he then
00:58:52
uses as part of his advisory.
00:58:54
Um because the conversations that he has
00:58:57
with boards, particularly with regards
00:58:59
to the pension um
00:59:03
decisions that he was discussing, the
00:59:04
300 million,
00:59:06
that does
00:59:08
come down [music] to humanity and
00:59:11
listening to people and understanding
00:59:14
other people's perspectives and being
00:59:15
able to put yourself in someone else's
00:59:17
shoes when you are making those
00:59:19
decisions and I think one of the key
00:59:21
things that Roger said for board members
00:59:24
to do is to consider the impact that the
00:59:28
decision that they're about to make
00:59:29
would have on all the various different
00:59:32
people and either role play or put
00:59:34
yourself in that position of what would
00:59:36
that person say to
00:59:38
whatever the decision is that's being
00:59:40
reached and that's a good way of
00:59:43
assessing whether or not you've
00:59:45
considered these stakeholders and key
00:59:47
people as part of the decision-making
00:59:48
process.
00:59:50
The fear factor is an interesting one
00:59:54
and the politics. He spoke about the two
00:59:57
together of saying that these influence
00:59:59
decision-making in the way that things
01:00:02
can play out, the amount of information
01:00:04
gets through to people, etc. And from my
01:00:07
own experience, I would say that those
01:00:11
two things, the politics and the fear,
01:00:13
are key factors in whether or not an
01:00:17
organization has the ability to thrive
01:00:20
and the type of culture that it creates
01:00:22
and the type of individuals that want to
01:00:24
work there. I know that Roger touched on
01:00:27
a number of different personality traits
01:00:30
within CEOs and leaders that would be
01:00:34
red flags with regards to
01:00:37
important decision-making and how those
01:00:38
people might approach that important
01:00:40
decision-making. I think the more boards
01:00:42
that can understand that their interview
01:00:44
processes and that C-suite level people
01:00:48
need to be properly assessed before they
01:00:50
are allowed into that particular role
01:00:53
and it's not just a matter of
01:00:55
they were the ex-CEO [music] of
01:00:58
whatever company that might be. I think
01:01:00
that that's is really important because
01:01:03
it will allow for better decision-making
01:01:05
moving forwards and just better outcomes
01:01:07
for every stakeholder that touches that
01:01:09
organization, whether [music] they work
01:01:11
internally or externally. That's it for
01:01:13
this episode of Grit in the Boardroom.
01:01:15
Thanks to Roger for sharing his story
01:01:17
with honesty and insight and thank you
01:01:19
for listening. If you found this
01:01:21
conversation [music] valuable, please
01:01:23
follow the show and share it with
01:01:24
someone who leads through complexity.
01:01:27
Until next time, stay thoughtful, stay
01:01:29
brave, and stay in the room.
01:01:43
>> [music]
