Superdry founder Julian Dunkerton’s recent coup resulted not just in his return to the retailer, but the resignation of his entire board. As he seeks to rebuild from scratch, we look at what skills and experience are needed for the perfect retail board.
Dunkerton, and newly appointed chair Peter Williams, are in a unique position with the opportunity to create the ideal non-executive team to guide Superdry through the realities of retail in 2019.
Retail is facing huge challenges right now as the consumer environment and socio-economic uncertainty combine to upend the status quo.
Add to this the rapidly changing way that we shop and the increasingly difficult economics of trading on the high street, and every retail boardroom has big issues to tackle to ensure their business is fit for the future as well as the present.
So, what should a retail board look like in 2019? What skills, experience and ‘type’ of individuals do retailers need to make sure their business is exploring the right opportunities and making the right decisions?
The branding guru
The rise of direct-to-consumer retail and the shift in power from retailers to brands means that retailers need to have stronger brands than ever before.
Customers increasingly expect the brands they shop with to have a point of view and even take a political stance. Just look at frozen-food specialist Iceland, which has led the field on environmental issues such as plastic reduction and palm oil.
“Retailers are having to ask themselves what they stand for”
Sarah Lim, Korn Ferry
So it’s no surprise that branding expertise was named as an important quality on a retail board by headhunters.
“Retailers are having to ask themselves what they stand for,” says Korn Ferry retail lead Sarah Lim. “A brand cannot be commoditised in the same way [as a retailer can] and so the way in which businesses develop brand equity is ever more critical.”
She says businesses are looking for non-execs that “really understand the core essence of bring a brand”. FMCG giants, beauty conglomerates and advertising agencies are prime poaching grounds for retailers looking for experts in the field to join their board.
Real life example: former Saatchi & Saatchi vice chair and Interbrand chair Rita Clifton at Asos
The eco warrior
With the government calling out retailers for failing to take responsibility for the waste or unethical practices generated by their supply chains, the onus is on businesses to solve the problems caused by our collective overconsumption.
Mary Creagh MP led a highly publicised inquiry into the sustainability of the fashion industry, lambasting some retailers for “failing to take action to promote environmental sustainability and protect their workers”.
Sustainability and ethics are high on the agenda with businesses as diverse as Asos, Lush and Tesco taking a stand on issues including modern slavery, animal testing and plastics.
“Sustainability is becoming more and more important,” says Barracuda Search director Victoria Nightingale. “At the moment it is often relegated to director level and sits within the supply chain but I think we could see this responsibility sit at board level in the not too distant future.”
Sustainability and an ethical supply chain will become more important as younger consumers demand greater transparency, and so tackling these issues helps to future-proof a business too.
Real life example: Selfridges chair Alannah Weston
Retail is being upended by new, entrepreneurial businesses that are innovating faster, quicker and cheaper to give customers what they want. Large corporates are renowned for moving slowly and in these fast-changing times risk becoming usurped by more agile disruptors.
So it makes sense that some retailers are choosing to appoint more curious and open-minded entrepreneurs on their board who can encourage businesses to break out of the corporate bubble and think differently.
“We have a new breed of individual who is entrepreneurial. It will be interesting to see the point at which these people begin to take control”
Victoria Nightingale, Barracuda Search
“We have all these new leaders coming through,” says Nightingale. “We have a new breed of individual who is entrepreneurial. It will be interesting to see the point at which these people begin to take control.”
It is particularly important to have this type of non-executive in tough times when business can be risk-averse. However, it’s during challenging times that thinking differently is important.
Entrepreneurs at board level can encourage businesses to explore opportunities they may never have identified.
Real life example: Lastminute.com founder Baroness Martha Lane Fox, who is non-executive director at M&S
As retail changes, so too do the business models needed to operate profitably and successfully.
This is evident not just from the seemingly endless stream of CVAs entered into by legacy businesses but by healthier retailers such as Next pivoting towards becoming a platform and lessening its reliance on its stores.
“Life is changing so quickly in retail,” says Moss Bros chair Debbie Hewitt. “So I would say that you need a non-executive with organisational design experience. Every retailer will have to change their business model over the next few years but few people have that experience.”
Hewitt adds that chairs should be looking for the next big development and hunting for non-executives with that skillset.
“How many non-execs have CVA experience?” she asks. “Not many. In a year or so’s time that pool will widen and more people will have that experience but, right now, a chair should be thinking about the next big thing to hit the market and searching for those non-executives who have knowledge of that.”
Real life example: Holland & Barrett chair and former Home Retail chief executive John Walden
The safe pair of hands
While it’s important to have innovative thinkers on the board, it is equally important to have a ‘safe pair of hands’, particularly during challenging times when many businesses are in survival mode.
In times of immense change it is understandable that many legacy businesses choose to steady the ship with an experienced hand before trying to embark on new ventures.
Businesses as diverse as New Look and Debenhams have recently chosen to opt for tried-and-tested leaders such as Alistair McGeorge and Terry Duddy, both of whom have the wisdom and perspective of accumulated decades of experience.
While neither could be said to be at the forefront of innovation, both know what it takes to hunker down into survival mode.
This type of leader knows how to rely on old-school tactics such as retail discipline and excellence in executive. They also offer peace of mind to investors – having an experienced operator in the boardroom will make sure the more forward-thinking ideas are fully thought through and risk is fully mitigated.
These ‘safe pair of hands’ types are also great resources to call on when the cards are stacked against you, as we’ve seen with Terry Duddy at Debenhams.
Duddy was a senior independent director at the department store business until he was called on to act as chair when Sir Ian Cheshire was ousted and then to take on the role of acting chief executive to lead Debenhams’ restructuring after it was taken over by its lenders in a pre-pack administration last month.
Real life example: Debenhams chair Terry Duddy
As the retail landscape changes rapidly, so do the skills and mindset needed to respond to the challenge. Consequently, retailers are now asking head hunters to search for those who have recently stepped out of executive roles for non-exec jobs.
Those who have been in an executive position recently are seen as being able to better relate to the challenges faced by the executive team than those who have held portfolio careers for five years or more.
“They may have had a lot of non-executive experience but they will not have dealt with the digital transformation and online growth first-hand,” says Lim. “They are further removed from how difficult some of the issues facing the executive team are.”
She believes that boards are going through a generational change. “More people are going plural so they’re refreshing that talent pool. It’s healthy because they will have been in the eye of the storm recently.”
The former executives going into these roles represent the best of both worlds: they have the experience of working at the coal face while also having the wider perspective that those with several non-executive roles bring.
Real life example: N Brown chair and former boss of Tesco UK Matt Davies
The people person
Human resources used to be a bit of a sideline, seen as a necessary add-on to proper business strategy. But that has changed – and will continue to develop – as retailers across the board acknowledge that how a business manages its people is critical to its success.
In order to succeed in an ever more competitive and challenging environment, a business needs to recruit and retain the best talent. Not only are retailers fighting their UK competitors for people but global retailers and tech firms as well.
“HR has definitely got itself on to the board more recently,” says Nightingale. “It has become a bigger and more strategically interesting aspect of the business and it’s about creating values and culture.”
Another factor in HR being a bigger-than-ever presence is the changing needs of its workforce.
As millennials are set to become the dominant constituent of many retail businesses, HR functions need to be more dynamic: millennials are more likely to change jobs more frequently and prize flexible working and a better work/life balance more highly than previous generations.
Finally, the cultural reckoning brought about by the #MeToo movement has resulted in some retail leaders being accused of mistreating their employees.
This has emphasised the need for better governance, especially at organisations dominated by a single powerful individual. Ted Baker’s appointment of HR expert Helena Feltham as a non-executive demonstrates this changing attitude.
Real life example: Richer Sounds founder Julian Richer, who advises M&S on workplace culture
The data geek
Digital transformation has become part of the deal for many retailers, with legacy businesses overhauling almost every aspect of their structure, from how they think about the customer to how they source product.
However, while retailers are good at innovating and pivoting to ensure they remain relevant in the customer’s eyes, it takes specialist knowledge to ensure that a retail organisation, which has its roots in selling product in a bricks-and-mortar space, can keep pace with their more nimble pureplay competitors, never mind the likes of Google and Facebook.
“It’s important to have people who understand new digital economy – a new type of shopper has emerged”
Moira Benigson, The MBS Group
“It’s important to have people who understand new digital economy – a new type of shopper has emerged,” says Moira Benigson, founder of headhunter The MBS Group, who calls H&M’s appointment of Cambridge Analytica whistleblower Christopher Wylie as research director “genius”.
Wylie does not sit on the board but does indicate that businesses like the Swedish fashion behemoth are conscious that they need to understand the ethics and the zeitgeist around data, as well as how to use it to their advantage.
Real life example: Former Tesco director Robin Terrell, who is non-executive director at businesses including Karen Millen and Amara