Comment: Non-executives can add value to your business

No comments

There is an old joke that goes along the lines of: “What’s the difference between a non-executive director and a shopping trolley?”

There is an old joke that goes along the lines of: “What’s the difference between a non-executive director and a shopping trolley?” Answer: “One can hold large amounts of food and drink while the other is useful for taking the shopping home and occasionally has a mind of its own.”

It doesn’t have to be like that.

In early 2006 I met Nick and Jon in a small office near The Aldwych. They were running a small but fast-growing fashion business on the internet that had already achieved turnover of £30m, made £1m profit, and was quoted on AIM with a market capitalisation of about £70m.

They were looking for an experienced retailer to join the board as a non-executive, to help guide them through their next period of growth. My credentials were 13 years at Selfridges and three years in mail-order at Freemans.

The business was becoming established but they wanted to add third-party fashion brands to the existing private label. Despite working in retail, I didn’t know much about the company because ecommerce in 2006 was in relative infancy.

Returning home I mentioned the name of the company to my eldest son and his girlfriend who were back from university. They both knew it very well and didn’t stop talking for five minutes about how fantastic the website was.

The name of the company was Asos.

This year analysts forecast that the business will achieve turnover of more than £700m and profits of about £50m.

The market capitalisation is now more than £2.5bn. Asos is a great British success story.

From a non-executive perspective this has been both an exhilarating and, at times, potentially hair-raising experience. For any business to expand at an average rate of 60% every year for seven years without having a serious glitch is a remarkable achievement.

The key strategic initiatives of developing the customer experience, going global and improving efficiency have over the years spawned myriad projects and actions. At the same time, the company has consistently delivered innovation and maintained its entrepreneurial and commercial spirit.

Every year, City analyst expectations have been met and financial commentators have rightly praised the operational achievements of this comparatively new company with its young team. So despite the rapid growth and exhaustive change, Asos has built an impeccable record as a public company.

Of course, the vast bulk of the credit has to go to Nick Robertson and his executive team for this huge achievement. However, the ‘non-executive team’ has also played its part - whether it has been on occasions to challenge the strategy, help to provide focus or identify weak areas in the organisation structure, assist in constructing the message to the financial markets or act as a devil’s advocate.

It’s a good example of how non-executives can add value and avoid ‘shopping trolley syndrome’.