Executive has a duty to deliver
Nov 6 2009 Bill Midgley, The Journal
THE sacking or ‘invitation to resign’ of the so called drugs csar raises a number of issues which are relevant to the business community.
Whilst the incident is wrapped up in the realms of politics, which I will willingly avoid, the question of the boundaries between advice and policy and particularly the responsibility for decision making affects most businesses, unless a sole trader where board meetings should be somewhat short.
The role of a board of directors is quite clear. It is to establish and approve strategy and to hold the executive accountable for the delivery of that strategy.
To enable the correct decisions to be made will require the input of the senior management team and particularly the chief executive given that individual’s responsibility for the delivery of the company’s objectives. However the role of the executive is to recommend, not to decide. That, the board must do taking into account all information and drawing upon their own skill set. A decision which may well go against any recommendation.
Given those circumstances any chief executive may well be in a difficult position but the individual in question is employed to deliver the objectives set by the board, not a personal agenda.
Too simple a statement? Perhaps, but if any CEO has a problem then the appropriate action is to move on. Any successful business requires an acceptance of corporate responsibility.
It is not appropriate to criticise openly such decisions that are made, or certainly not appropriate to do so whilst still drawing remuneration from that business. Disagreement on policy, or more particularly, open dissent should result in resignation. Principles have a price and if individuals feel so strongly then that price should be met.
Not always the case in the modern world but those who criticise and continue to accept the rewards have to be called into question.
Board decisions may be wrong, they often are, but ultimately that board should pay a price in their own dismissal. Perhaps not as precipitately as a government that is voted out of office but nevertheless there is usually a day of reckoning.
In the case of the drugs csar the Home Secretary had the right to take the action in question. In a similar way so does any board have that same right. However, it does need to bear in mind that it is the chief executive who should be most knowledgeable about policies to be pursued and the ability to deliver.
Bill Midgley is a North East business executive and former chairman of the British Chambers of Commerce
