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Niall Fitzgerald likes to plan ahead. The former joint chairman of Unilever has a habit of setting dates for board meetings three or four years in advance, to encourage busy board members to avoid clashes.
So when the directors of Reuters gathered this June at a country house hotel in the South Downs in England for their annual strategic review, they were well prepared.
Since becoming non-executive chairman of the financial information group a year ago, Mr Fitzgerald had worked up to the event by devoting half of each board meeting for the first five months of the year to a detailed presentation from one of Reuters' divisions.
"We did a two day deep dive [into the detail and strategy of the group in June]," says Tom Glocer, the group's chief executive, "but we had built up to it in a very logical way."
The reason, Mr Fitzgerald says, is that strategy discussions should not just be a matter of executives presenting their plans and non-executives debating them. "I don't think you can have anything other than the formality of approval if you d it that way. It has to be initiated by the management but co-owned by the board."
The earlier debates about individual divisions allowed executive managers to go back and work on any issues the non-executives queried.
The question of how to run a board is not one to which a new chairman will find many quick answers in the corporate governance codes written over the past decade or more. The matter of which directors are needed around the boardroom table is, similarly, still one left largely to individual chairmen. When Sir Deryck Maughan, the former chairman and chief executive of Citigroup's international operations, attends his first board meeting this month, he will be the fourth new non-executive director to join Reuters' board in just over a year.
Counting Mr Fitzgerald's move from director to chairman, five of the nine nonexecutives are new. Mr Fitzgerald joined the board almost three years ago with the mandate to succeed Sir Christopher Hogg, but was still joint chairman of Unilever until last year. It was clear board changes were needed even before he took up the chairmanship, he says. "I wanted a more direrse group so we would have a richer universe of impulse."
Last June, he brought in Lawton Fitt, Penny Hughes and Ken Olisa -- two women and a black man. But this is not what he means by diversity, according to Mr Glocer: "We both deeply believe you don't get women on the board because it's nice to have token women. They bring a perspective, a diverse set of experiences, which ultimately leads to better decision making."
There was a compelling case for change in the boardroom. Between late 2000 and early 2003, the stock had fallen by more than 90 per cent after the company had got "terribly carried away" in the internet bubble. Mr Fitzgerald is anxious to avoid pointing the finger at his predecessor, but admits: "The board has to bear responsibility."
As a starting point, he says: "It's when you don't deal with the truth that you run into trouble. The first responsibility of any leader is to define the reality."
He and Mr Glocer are blunt about that reality. "Reuters went from failing to mediocre, and it has gone from mediocre to good, but it has certainly not gone from good to great," Mr Glocer says, before adding that he sees pockets of greatness such as its foreign exchange business or its reporting team in Jerusalem and the West Bank.
"There are various ways of looking at a board," Mr Fitzgerald says. "There are its core functions, strategy, risk assessment, financial performance and succession; and then you want an additional range of skills and experience depending on the company."
In Reuters' case, he concluded that the board needed experience of the financial services industry to which most of Reuters' clients belong, knowledge of the technology that underpins the business and an understanding of customer service, an area where Reuters' reputation has been weak.
Directors would also need an international outlook and experience of executive responsibility, without posing any potential client conflicts. Running through the new appointments, Mr Fitzgerald says Lawton Fitt, a former Goldman Sachs partner who brought many internet companies to market, brings technological and financial services experience; Penny Hughes, who made headlines for leaving her job as president of CocaCola's British and Irish operations to spend time with her family, offers experience of customers and marketing; Ken Olisa, a former executive with the ill-fated Wang Laboratories who now runs a technology banking boutique, "knows technology from the inside from being a salesman"; and Sir Deryck Maughan, whose career at Citigroup ended after the group's high-profile regulatory problems in Japan, is a long-term Reuters client who has worked in Europe, the US and Asia.
The new directors joined a board whose longest-serving member, Charles Sinclair, the Daily Mail and General Trust chief executive, became a director in 1994. Mr Fitzgerald has little time for the argument that board members lose their independence if they sit on a board for too long. Dick Olver, chairman of BAE Systems, has been on the board since 1997; Ian Strachan, former chief executive of BTR, and Ed Kozel, ex-chief technology officer of Cisco Systems, both joined in 2000.
Having begun assembling the members of his board, Mr Fitzgerald started his first meeting as chairman by telling them it was important they agreed on its role. His memo begins: "It is a unitary board with one group sharing common objectives and united in purpose. The board does not run the business, but reviews how the business is run." It continues: "The overriding theme of the board should be profitable growth within an acceptable risk profile." It concludes: "We must be prepared to challenge, confront, disagree and probe, but always in a way that is constructive and supportive of the business agenda. Nothing should be left unsaid within a team that is committed to success."
At February's board meeting Mr Fitzgerald handed board members another sheet of paper listing his objectives for the year. He intended, he said, to build a strong working relationship with Mr Glocer, develop a highly effective board, help the board agree on Reuters' brand identity, contribute to the strategy for the next five to 10 years, focus on executive and board succession and encourage effective communication within and outside the company.
Mr Fitzgerald has established a secure website to allow board members to "drill down" to find out more detail than is contained in the two-page memos in which the board usually receives information without becoming a burden on management time. He has also introduced twice-yearly succession planning sessions, where Mr Glocer and Reuters' head of human relations discuss the top two layers of executive management and identify promising younger employees.
Four board meetings were spent discussing the essence of the Reuters brand before settling on the words "my trusted source". Communicating that brand and the new strategy to staff has been essential, he says, because: "It's very difficult to motivate people to get out of bed to say 'I'm really excited to go to work today and improve the margin'. It has to be something more engaging."
Sir Deryck's appointment to the board is unlikely to be the last under Mr Fitzgerald's chairmanship. "I'd like to have a really strong Asian on the board; I'd like to have a continental European; I wouldn't mind another financial services person with trading expertise," he says. "Strategy for me is not a thing you do in set pieces. Strategy is a process."
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