Institute of Directors boss Simon Walker (pictured) stresses the never-ending need for change and modernisation in UK business and industry
Simon Walker, director general of the Institute of Directors, hopes to improve the quality of UK management – but first had to transform his own organisation.
Behind the columns of the 1820’s Nash building in London’s Pall Mall, all had not been well. The plush headquarters with its strict dress code was perceived by some as a rather stuffy home for ageing fat cats and, as a result of image and recession, membership had been in decline since 2001.
“We have got to be nimble and we have got to be flexible; we have got to be agile because otherwise we are not going to survive,” argues Mr Walker, who has also held senior positions at Reuters and Buckingham Palace.
Enticing new members
Agility in this case included the launch of IoD 99, accepting 99 people under the age of 35 paying £99 each to join, who were running startups rather than sitting in established executive suites.
Normally to be a member of the Institute of Directors (IoD), a candidate would have to have been a director for three years or control an annual budget of around £250,000 in a large organisation.
“Actually we got 500 of those [IoD 99] people and our membership is rising again for the first time in years,” says Mr Walker, who was also involved in revising IoD standing orders that used to insist on ties and jackets, and would have frowned deeply on jeans.
“I don’t mind jeans, but we would prefer them not to have holes and we even had three or four sightings of shorts over the summer,” says Mr Walker, who believes that the changes in IoD culture and inclusivity are a metaphor for the ever-present priority of change and modernisation in UK businesses.
“I think business is in a reasonably positive phase. We know that productivity has to improve and growth has to stay in its current picked-up state and to create real wealth by creating real products, rather than the financial speculation we have had for so long,” explains the IoD director general.
Starting a business
More young people, he believes, are realising how exciting it is to launch their own business, whether it’s a high-tech startup or a hairdressers.
The US assumption that it’s fine to fail at the beginning and you just pick yourself up and try again is also becoming more prevalent in the UK.
Mr Walker says he likes former Business Secretary Sir Vince Cable personally, but was totally opposed to his suggestion that for directors associated with failed companies it should be a case of “three strikes and you are out”, and you would then be permanently disqualified as a company director.
“That would have ruled out Thomas Edison and Henry Ford,” notes Mr Walker tellingly.
Recognising that businesses need a degree of social consent and acquiescence to succeed, another of his tasks is to try to counter anti-business attitudes in politics and society.
Countering anti-business attitudes
“I am constantly trying to shift the emphasis on to smaller companies and entrepreneurial companies and companies that are making it and creating things and creating jobs,” says Mr Walker, who is not afraid to tackle publicly even some of the most powerful British companies on serious issues such as executive pay.
Managerial agility is something that can be taught and can be encouraged, but it has to be a top corporate priority
“We are doing our best on that, trying not to represent the fattest of fat cats and we have been very critical on executive pay,” says Mr Walker, who was very outspoken about the “golden hello” worth £25 million to incoming boss of oil and gas group BG, Helge Lund.
The IoD director general’s comments, backed by a shareholder revolt, saw the amount drastically reduced.
For Mr Walker the greatest contribution the IoD can make to improve the skills of the UK business community is through education.
“Managerial agility is something that can be taught and can be encouraged, but it has to be a top corporate priority. There has to be a focus; being nimble, being able to adjust has to be seen as a real benefit,” he says.
There are expensive, full-week IoD residential courses on preparing executives to run companies “the proper way” or modules are also available. There are courses for independent directors and even for personal assistants.
“My ideal target is someone who has possibly a brilliant business idea, but doesn’t actually know how to run a company. They can come here and learn everything they need to learn through our professional and development people,” says Mr Walker, who himself learnt an important lesson from taking an IoD course on the role of independent directors.
He found the legal implications so onerous that he resigned as an independent director of a charity and instead now just gives informal advice.
Mr Walker, who has personally moved from a left-wing perspective to becoming a dedicated believer in free markets, does not think there is a single type of business leader.
“The entrepreneur, who starts up a business and gets it going, is so different from the minder, who looks after an established company, but I think the quality of business as a whole [in the UK] is pretty high,” he says.
Under Mr Walker, the IoD has also been blunt-speaking on many of the controversial issues of the day that go far beyond fat cat pay.
On European Union membership, Mr Walker believes business is likely to support staying in the EU if Prime Minister David Cameron “can get something” in the negotiations.
“If Britain left the EU there would be a five or ten-year interregnum when we wouldn’t know what access we were going to have. That is something that I think people have a strong pre-disposition against,” says the IoD executive.
Overall the IoD is in favour of immigration and believes the free movement of labour is at “the absolute core” of the British economy, particularly in and around London.
“It has enabled us to punch above our weight economically and we believe the government is risking it – we blame all politicians not just the Tories – and I think they are giving offence to the world,” says Mr Walker, a South Africa-born migrant, who notes there has already been a fall in Indian students coming to this country.
At Buckingham Palace, another British institution transforming itself with “a terrific website” and Prince Andrew regularly holding events for young entrepreneurs, Mr Walker had to practise diplomacy and discretion.
Clearly he feels under no such obligation now. What does he feel about the election of Jeremy Corbyn as leader of the Labour Party?
“God. Words fail me really. I think he is beyond parody. It’s just so ludicrous. It’s hard to credit at all actually, but it happened,” he concludes.
As for the future of British business, Mr Walker says the simple message from the IoD is be as agile as you can – and “go to it and do what you feel enthusiastic about”.