In early March, Ian Munro and Wendy Lambourne, directors of Legitimate Leadership, made presentations on Legitimate Leadership’s approach to Building Strong Boards (or governing bodies of organizations) as part of a FluidRock online webinar on that subject.

Below is a summary of Ian Munro’s presentation. A summary of Wendy Lambourne’s presentation will appear in our April 2025 newsletter.

Ian Munro: ‘In 2007 I was offered a professional opportunity that I had really wanted, and I had no hesitation in accepting. The opportunity was to move to the UK – to move my whole life from South Africa – and to consolidate a number of projects in the UK and Europe that the business I was then working for had. It was very exciting!

‘It was somewhat less exciting – in fact terrifying – in 2008 when I got on the plane a week after the financial crisis.

‘When I arrived at the London office on the first day, every one of our projects there had been put on hold – in other words, we had no revenue. In hindsight, though, I did have one thing that was incredibly fortunate.

‘We had a board member of our South African business who was based in the UK. He had, for instance, negotiated office space for us, so he was somewhat invested in us. And I had a good relationship with him.

‘That morning, when I walked into his office, I was panicked. He said he appreciated that I had problems. It later became clear that he had arranged for a once-off lifeline of credit which would allow us to pay salaries that month.

‘Later that morning I was sitting at my desk trying to collect my thoughts when he walked in with the top sales person in his organization, called Nick. He told Nick I was trying to build a business but I needed a network – and I spent the next few weeks wandering around London while Nick introduced me to people.

‘And the third thing this director did was to say: “Let’s have a monthly catch-up of just 30 minutes in case you have any thoughts, anything you’d like to bounce off me.”

‘In that first year, 2008-2009, we broke even and didn’t retrench anyone (at a time when millions of people were being retrenched in London), and the following year we exceeded our targets by double. All of which happened because somebody extended a lifeline to me, a level of trust that I did not deserve at the time. It made the world of difference.

‘But that is not the kind of experience most executives have of board members. Mostly executives’ experience of board members is the opposite: “You should be able to make this work. These are your numbers, this is what you have to do, it’s on you. We pay you a lot of money and you need to get it to work.”

‘That is what Legitimate Leadership hopes to change. We work primarily with senior management teams, but also with boards.

‘Anecdotally, in my experience, senior management’s complaints about boards fall into three categories:

1. Too much reporting. I often hear senior managers saying that there is just too much reporting to the board and they cannot get on with their jobs.
2. Senior Managers often say they feel under-appreciated. These are not managers who are failing – they are succeeding. They don’t say they feel under-appreciated regarding remuneration, but on a personal level, “it is like this is a transaction – I do the work, you pay me the money. But I want this to be deeper than that and I’m not feeling that level of appreciation.”
3. The board makes decisions about the business, but half the directors don’t actually know what’s going on in the business. And if they do, it’s only because of what’s in the board pack – which is what the executive chose to tell them so it is what they already know. Which is an interesting dynamic because it relates very closely to where Legitimate Leadership comes from.

‘In the late 1980s the Chamber of Mines in South Africa did a study of 70,000 employees in its industry into trust in management. Basically employees were asked the question, “do you trust management?” They could strongly agree (10), all the way to strongly disagree (-10). It was expected that there would be universal mistrust of management because this was an absolutely fractured environment during apartheid. But that is not what emerged. The results in fact showed a broad variation in trust. So the research team went out to look for factors that might influence trust.

‘Of course the unions said the issue was pay (“if you pay people’s so little how can they trust you?”); management said the unions were the problem; academics said low levels of education were the problem.

‘But in the subsequent research none of those factors proved to be significantly correlated to trust in management.

‘The second round of research focused on leadership style. Employees were asked whether they believed their manager had improved; what a good manager was for them, and the reverse; and why they said that.

‘What emerged was this nugget that Legitimate Leadership has been applying in organizations for the last 40 years: managers, both individually and collectively, are accepted or rejected on the strength of their perceived interest in the well-being of their people. Trust is granted or withheld, leadership is seen to be worthy of support or not, primarily on this basis. In other words, it’s the relationship that matters more than anything else – more than any of those factors that we normally try to adjust.

‘Very important is that this requires what Legitimate Leadership calls an inversion in the line of command. In a modern organization, if we ask the average manager what the objective of his/her job is, the answer invariably is, “to provide results for the CEO.” If we ask the average sales supervisor or general employee what their job is, it is “to hit my targets/to give results up the line.” If we ask the average CEO, it is also “to give results up the line (to the board).”

‘So the entire organization is looking up the hierarchy. Legitimate Leadership posits that somebody is missing from this picture. That person is between the employee and the result: the customer. In other words, the employees don’t deliver the results; the customers put money in the bank and it is the customers who require great service. So if you are going to get your customers to put money into the bank, you need to be delivering great service to them. But as the employee, how can you be facing up the line and facing the customer at the same time? Answer: we need the support within the organization to also turn around.

‘What the research showed is that we need managers to turn around and give their people two essences: care (a genuine concern for the human being); and growth (the ability to realize one’s potential). And this care and growth needs to happen throughout the line.

‘If we now extend this to the governing body, you can see that it wouldn’t make sense for the CEO to be looking up the line at the governing body (the board).

‘Our view is that he/she needs to give something to the organization, and not the other way around.

‘We are not for a second arguing that results are not important. Everybody needs to keep an eye on the results. But we are concerned with what can be given to the results as opposed to what we are getting from the results. Because it’s in what we give to the organization – to our people – that we actually end up improving the results.

‘So what does this inversion in the line of service actually mean for directors? First it means that board members should be concerned with caring for and growing the executive – having a genuine concern for the human beings in the executive team. Executives often feel that they are expendable – that if they don’t hit the results, the board will get rid of them very quickly without any concern for the human beings. It also means that board members need to worry not only about what they are getting (measures like profits or safety performance over the financial period), although those things are important.

‘They also need to worry about what they are giving: what the lead measures are, whether improvements in quality and safety performances and production processes and innovations are being achieved – and what key customer feedback looks like. What are the lead measures, what are the employee metrics that we can look at and impact? Do employees understand and support the vision of the organization? Questions like that.

‘We know that people are motivated when they understand the purpose of the organization. But it’s fascinating to me how many senior managers struggle to answer in a coherent way when asked the question “What is your purpose in the organization?”

‘So basically board members need to make three shifts:

1. A shift in our WHY; in what we CARE
2. A shift in WHAT we give and HOW we give it.
3. A shift in what we hold the executive ACCOUNTABLE

‘Board members often say the only thing they care about is results (sometimes they wind back on this in a limited way).

‘They need to have a broader set of things that they care about. They need to care about standards. We do not improve results by raising targets, we improve results by raising standards. But we talk about targets all the time, we don’t talk about standards enough.

‘When I have reported into boards (in previous roles), board members have never asked me, “what standards have you shifted in the organization?” But they have frequently asked me about the performance of this or that division which didn’t achieve the results targets the board had set.

‘Regarding the shift in what we give and in how we give it: what my director in the UK gave me didn’t take much time but it was a level of trust which inspired me to really commit to the organization. It was his introduction to a key individual who helped me to find new clients. It made all the difference.

‘On how we give: we need to spend more time really understanding, looking under the canvas, doing things like building relationships, coaching, etc. In one instance Legitimate Leadership got the board together and asked the question, “what do you believe your gift to the organization is?” Replies started with, “well, I need to attend two meetings a year,” but ended with everyone making a commitment to choose a senior executive to coach and mentor. And it included a couple of people saying, “I’ve got industry connections where I can make introductions.” That had not been the starting point, but it seemed obvious by the end of the day.

‘On what the board holds the executive accountable for: we are not suggesting for a second that the board stops holding the executive accountable for the organization’s performance. Of course they must be accountable for that. But don’t think of the organization’s performance narrowly, as being “what you did in the last period.” It includes future performance and alignment with purpose, mission, vision, etc. And there needs to be accountability for what they have done in this period which is going to enable the organization to succeed five periods from now; what standards have changed; what innovations are being looked at; who they are hiring; how they are engaging with their people. Not in place of, but in addition to, worrying about current performance – because obviously that needs to be a key metric.

‘None of these things are easy and there is a lot of nuance in how they apply in different industries and organizations of different sizes, etc. But directors need to apply their minds to what they can give, how they can become really impactful for the executive in the organization.

‘One way to do that is for directors to simply ask them: “Is there anything I can do, anything I can help you with?”’