A typical Plc board consists of a Managing Director, Finance Director, Operations Director, HR Director, Sales Director and a Chairman to keep them in line. Maybe there is a Commercial Director and a Property Director too if the particular case suits. But generally, there is not the business owner on the board.

So, this fine group of people are charged with making decisions to ensure the company’s survival and growth. The MD takes the decisions based on information and guidance from the others and the Chairman provides the moral input and guidance based on their background.

And so, what went wrong with the purchase of ISS by G4S the other month? The answer is nothing went wrong except that some of the shareholders of G4S didn’t think this was a good idea. A view no doubt driven by money (profit and growth) as that is their only measure.

Nick Buckles gets egg on his face and G4S get a one off charge of some £50m for no gain and ISS, (still one of the most respected FM companies in this country) grows and increases their shareholder value.

My question is; if the shareholders make the decisions shouldn’t they be on the board? Or conversely, if the board know that the shareholders have a crucial vote why not ask them before spending £50m?

It would seem to make things a little unwieldy and unmanageable if this happened and I, for one, have been lamenting the days when senior execs were paid to make decisions and if we got them wrong we answered for them.

GSH Group listed on AIM and then delisted a couple of years later when the grandson of the founder bought back his company. I heard criticism in some circles at the time for this but I can absolutely see why anyone would want to make the key decisions when faced with players in the background calling the shots with whom you have little personal relationship.


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