The Kama Sutra is an ancient Indian Hindu script considered by many to be the standard work on human relationships. ‘Kama’ means ‘sensual’ and ‘sutra’ translates to ‘manual’: it’s a guide to living a virtuous life.
Whether investment banker and popular non-executive director Alison Carnwath consulted its pages is not known but her language certainly reflected its poetry. In announcing her shock resignation as a director of Barclays Bank she said that she was
“no longer able to devote sufficient time. I cannot give the time Barclays seems to want from its non-executive at the moment and the demands are only going to get worse. You can’t be half-in and half-out.”
This extra-ordinary statement poses a number of questions which affect the vexed question of the true role of the non-executive director:
a) Is Ms Carnwath ‘half-in and half-out’ with her many other positions at, and including, Man Group, Arcadia, Friends Life, Land Securities and others?
b) Is this a hammer blow for those (including Lord Davies) touting for quotas of women on boards of directors?
c) Was Ms Carnwath’s role in the remuneration package of Bob Diamond proving too hot to handle? Shareholders at the April AGM of Barclays Bank certainly had some pertinent comments to make.
The most interesting point is what exactly is meant by ‘half-in and half-out.’
You can’t be this. There is no legal definition of a non-executive. You are a director and Ms. Carnwath is, whether she likes it or not, involved (until she resigned) with the mire affecting Barclays Bank. There may well be litigation in the future against the Board of Directors.
The cynic might suggest (although Enterprise Britain is sure this does not apply to Ms Carnwath) that too many non-executive directors simply take the money and contribute little. They simply impress the auditors by being on the various committees.
The truth is that most companies are run by the Chairman and the Chief Executive. Never has this been so demonstrated (apart from by the former Knight of the Realm, Fred Goodwin) that the shambles pretending to be corporate governance at Barclays Bank is a sham.
The problem facing Government, the regulatory bodies and the professions is that, as yet, nobody has found a better way. As a believer in capital markets it is, perhaps, one of the most issues on which to commentate.
As a non-executive director of around ten companies (past and present) my advice to anybody offered this position is to remember what the Kama Sutra is really about.
The best position is to sit next to the chairman.