A seat on the board requires different skills from project management, says Mace’s Brian Moone
Excel long enough as a project manager and you may be invited to join the board. But do you have the skills to manage and direct the business? According to the ConstructionSkills 2009 survey, only 30% of managers in construction received off-the-job training of any kind. At the Mace Business School, our research indicates that less than 10% of business directors have received any training in their roles.
But if you fully understand the core operation and have been leading your project team, surely you’ll pick up any other aspects of the role as you undertake it? True, but at best it will be inefficient and at worst it could expose you and the business to financial or even legal risk.
When a trench on a Gloucestershire site collapsed in September 2008, killing a 27-year-old geologist collecting soil samples, it was reasonable to assume the man’s employer would face charges for health and safety breaches. But did the company’s director understand, when he took on the role, that one day he could face a charge of gross negligence manslaughter and, if convicted, be jailed for life? [The trial of Peter Eaton, director of Cotswold Geotechnical Holdings, has been adjourned until October].
Business directors have to make time to ensure the right processes and systems are in place to protect the company and its employees. A project has a fixed duration, but running a business requires ongoing action with long-term aims and the right people to drive the business forward. Within that responsibility lie wider issues such as employment, taxation and other financial legislation.
The most common mistake newly appointed board members make is to neglect their duties as directors by staying in their comfort zones. Particularly in smaller companies, you may be expected to maintain some operational involvement. However, meddling in the detail reduces the time you have to undertake your new role.
The key to being a good board member is to stay on top of the news and be capable of identifying and understanding the broad external issues, risks and opportunities that might affect your business, clients and suppliers in the short and long term. The knack is to have that information before your competitors and use it to make decisions about investments and resource levels. As business director, you are required to assess the potential risk and reward of taking the company in new directions, such as working for a new client, acquiring another business, or pulling out of markets perceived as no longer viable.
As a director or partner, you have a legal responsibility for governance. While a company is a legal entity in its own right, the law requires it to have directors who take on responsibility for its affairs, its actions and transactions. You need to be fully aware of your liabilities.
In summary, your duties are:
- Skill and care You are expected to make decisions that are reasonable given your knowledge and the circumstances.
- Fiduciary You must act in good faith, which means remaining impartial and putting the interests of the business before your personal interests.
- Statute law You must be truthful and lawful in your actions on the board.
- Due diligence You remain aware of the board’s work by attending meetings, reading correspondence and making reasonable enquiries into the company’s affairs.
- Continuance Even after resigning from the board, you are responsible if it is found that you knew of potential liabilities and neglected to do anything about them.
So, can good project managers make good business leaders? Of course they can — but they need the right development and training.
Brian Moone is director of Mace Business School
Five ways to…keep your business productive during the World Cup
Clarify your annual leave policy
There is no statutory entitlement for time off to watch football! Employers should remind employees about their annual leave policy, procedures for taking time off and the amount of notice required. It’s important to decide how to deal with requests — first come, first served or based on work needs? If an employer’s leave policy is silent or non-existent, the Working Time Regulations 1998 apply — an employee must give notice equivalent to twice the number of days they wish to take off.
Consider restructuring the day
Temporary flexible working can help maintain productivity while keeping employees happy. This would allow an employee to work different hours or to make up missed hours on other days. Another option is to move rest breaks. The Working Time Regulations stipulate rest breaks when daily working time exceeds six hours. If employees agree to take their breaks at the end of the day, this would allow them to leave early.
Beware of sickies
Should you pay employees who don’t come in? If their contract includes the right to sick pay, an employer may face claims if they refuse to pay up. If there is no contractual scheme, an employee can fall back on Statutory Sick Pay, which leaves the first three days of sickness unpaid. If the employer suspects the sickness isn’t genuine, they face the tricky task of trying to assess the truth, perhaps by arranging a return to work interview with the employee.
Consider installing a TV
Allowing employees to watch matches in the site office, during a lunch break for example, can foster good industrial relations. You could also plan it as an after work team-building exercise. Alcohol should be banned if employees are returning to work afterwards. Even if they aren’t, employers can be held vicariously liable for an employee’s conduct if personal injury results.
Consider your internet policy
Staff may want to use office computers to watch games or track the score, which can affect productivity. Make sure you have a clear policy that spells out what is/isn’t acceptable.
Sharon Latham is a partner at solicitors Clarke Willmott