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New research suggests the biggest leadership risk right now may not be bad leaders — it’s “good” ones. In fact, good leaders are both the problem and the solution: they already have the fundamentals, but they haven’t adapted to what employees need from leaders today.

A study of 2,206 U.S. employees, conducted by The Grossman Group with The Harris Poll, found that 54% rated their senior leader as “good.” Yet those same employees report three consistent gaps: they don’t feel valued as individuals, they don’t feel heard, and they don’t believe their leaders help them reach their full potential.

“Good” leadership was built for stable times. But we don’t live in stable times. Today’s uncertainties—economic volatility, AI disruptions, geopolitical conflicts, and constant organisational change—create relentless instability. These pressures are widening the gap between “exceptional” and “good” leaders and what employees now expect in the workplace. This means your “good” leaders are your most dangerous blind spot, putting the whole company at risk. If you fail to move leaders from “good” to “exceptional,” employees will disengage. You will steadily lose trust, talent, and relevance. You will fall behind your more adaptive competitors. 

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, is joined by David Grossman. David is the Founder and CEO of The Grossman Group, which helps Fortune 1000 companies lead with heart and drive strategic results by transforming how they communicate, operate, and inspire their people. 

Boards are happy with leaders who get results. Indeed, some 54 per cent of employees rate their leaders as good. Unfortunately, boards that accept “good” results miss the potential for exceptional outcomes. 

David notes most good leaders were trained for stable times. That’s not the present environment. Their employees note that good leaders appreciate results, answer questions, and solve problems. It’s operationally good, but voluntary turnover rates and innovation speeds indicate a big underlying gap.

“The blind spot is all about appreciating those who work for you.”

In David’s experience, the difference is in how a leader treats and inspires workers. Good leaders see results; great leaders see people. Yet research reveals just 16 per cent feel their leaders value them as people, only 19 per cent feel heard, and a mere 14 per cent say they are reaching their full potential at work. Under good leaders, people will report feeling invisible as human beings. Under great leaders, the metrics for being valued, heard, and seen will be double or more. 

“The discipline is knowing which are crystal balls, the ones you cannot drop without permanent damage, and which are rubber balls, the ones that bounce back.”

David compares leaders to balls. Crystal balls are what most organisations have – fragile leadership structures that collapse in a crisis. The goal is rubber balls – resilient, adaptable leaders who inspire their teams to excellence in all situations. 

To make the shift, David recommends boards move from a performance vs. underperformance view to a three-tier lens of what’s exceptional, good, or outdated. This captures both inspirational ability and goal performance.

“The most important thing boards can measure, based on what I've actually seen move the needle, is how well their leaders address the three blind spots.”

Leaders who make their people feel seen, heard, and valued make the difference. Good leaders routinely overestimate how comfortable their teams are with speaking up on issues. David notes independent perspectives, from skip-level reviews to third-party surveys, can uncover this gap.

Another vital investment is in heart-focused attributes. Out of the top 10 qualities of exceptional leaders, nine are heart-based skills. These include fostering a positive work culture, building trust, and communicating transparently. All are trainable skills, including gratitude, the number one differentiator of exceptional leaders.

The three top takeaways from our conversation for effective boards are:

1.      Good leaders are both the problem today and the solution.

2.     The gap between good and exceptional is a training gap and belongs on the risk register. 

3.     Put leadership quality on the standing agenda. 

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While we often think in terms of large, listed corporations, family firms account for some 70% of global GDP and 60% of global employment. They are key drivers of innovation, entrepreneurship, and long-term value creation, and effective governance of family firms warrants serious attention. 

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is joined by Prof. Dr. Philipp Hoog. Philipp is a Partner at BBE Handelsberatung, a leading German consultancy specialising in the retail sector, and Honorary Professor of Strategic Management at CBS International Business School in Cologne. He advises family-owned and founder-led businesses and investors on strategy, governance, transformation, and succession, with a particular focus on the role of advisory and supervisory boards in navigating disruption in retail. Philipp combines academic insight with hands-on experience from numerous board-related mandates and projects. He also serves as President of the EBS Alumni Association, representing graduates of EBS Universität für Wirtschaft und Recht.

“In family business, it's not just the business sitting at the table, but also the family and the ownership, often embodied in the same people.“

Philipp notes that many of the world’s most successful companies are family-owned. Mars, Walmart, Aldi, Lidl, Peters Sports, and Samsung, to name a few. This makes governance more complex and personal, since any strategic advice must also consider family dynamics and generational concerns.

“The role of an advisory board in family businesses is something like a balancing act.”

For Philipp, advisory boards need to provide advice and control while considering the family interests. This can mean serving as a sparring partner, driving succession conversations, or diffusing emotional conflicts. At times, this requires a greater time commitment and investment in understanding the relationships than you would see at a non-family firm, to give appropriate advice and remain mindful of the dynamics.

“Boards, especially in family businesses, work well when there are three things in place.”

In Philipp’s experience, family boards need three things. The first is clear role separation, so family members understand when they are acting as shareholders vs family members or external stakeholders. The second is timely professional information about the business, ideally through structured reporting. The third is regularly scheduled, well-structured board meetings. To Philipp, three to four quality meetings per year, plus a strategy retreat, is ideal.

“A good advisory board doesn't restrict entrepreneurial freedom; it expands it.”

Philipp sees boards operating under two distinct models in family businesses. One is as an early warning system and strategic challenger. Another model is a board that oversees the company and monitors overall governance issues. 

A critical question is whether the company is playing to win or playing not to lose. Family-owned businesses can be reluctant to share authority and control, but a good board offers structure and support. Indeed, since family businesses often think in generations rather than quarters, partnering with board members who share the entrepreneurial DNA and bring a governance structure can be the key to more stable long-term growth. 

The three top takeaways from our conversation for effective boards are:

1.      Governance is not a luxury. It is a success factor, especially for family businesses. 

2.     Family ownership and business must be clearly separated in roles, in bodies, and in decisions. This creates professional governance. 

3.     The right board makes the difference. 

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Selecting the Chair: Governance Lessons from the US and the UK

Chair succession is handled differently in the US and the UK. However, both approaches have merit, and there are key principles that matter regardless of geography. 

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is joined by Susan Skerritt. Susan is a Non-Executive Independent Director on the boards of Citibank Europe PLC, Tanger, Inc., and IG Group PLC. She previously served on the boards of Royal Bank of Canada US Group Holdings, Community Financial Systems, Inc., VEREIT, and Falcon Trade Group. Before her Board career, she had a successful 35-year financial career and served as the Chairman, CEO, and President of Deutsche Bank Trust Company in the US. 

“Procedural differences reflect genuinely different governance philosophies.“

To Susan, the differences between the US and UK approaches reflect the differing philosophies at play. The US model is rooted in the idea that Boards are best positioned to govern themselves. So, the Board Chair is almost always selected from existing Directors, with the process managed internally. The Chair and CEO roles are often combined, and there is a deep resistance to “governance by checklist” regulations.

The UK model places greater weight on structural independence and investor accountability. The current code was built after corporate failures in the 80s and 90s and holds that self-governance without structural safeguards is insufficient. There are term limits, rules about external candidates, and separate CEO and Chair roles. It’s not wholly prescriptive, but “comply or explain” dominates.

“The strengths of one approach tend to illuminate the weaknesses of the other.”

In the US, Susan sees that internal candidates, who already know the company, its strategy, culture, and management team, can reduce transition risk. This is valuable in fast-moving situations and reduces search costs. Plus, internal candidates have established relationships and a track record with management that foster trust and candour from the start. The downsides are insularity, cultures of deference, and a lack of external benchmarking.

In the UK, those potential downsides are addressed. The formal process carries a mandate for independence from the new Chair and searches a wide talent pool for the best candidate to meet a carefully vetted list of needs. However, there’s a risk the search becomes an expensive, time-consuming theatre. There’s also transition risk if the new Chair can’t fully integrate with the company culture.

“Regardless of which governance tradition we're working within, there are three principles that matter.”

To Susan, three principles matter most. First, Boards should know what they need and not reach for what they’ve always had. The most common failure in Chair succession is a default to continuity. 

Second, process quality matters as much as outcome. Susan views this as the UK’s greatest contribution to the global governance conversation. A well-designed search process is rigorous, transparent, and defensible. It surfaces assumptions, creates a record, and signals to shareholders that the Board is taking the decision seriously. 

Third, succession planning is not an event. It's an ongoing discipline. Effective boards keep succession on the live agenda, actively managed and not derailed by unexpected departures. 

The three top takeaways from our conversation are:

1.    Structure matters, but it isn’t everything. The issue is always whether the Board is exercising genuine, independent judgment.

2.   The US and UK models are converging and getting better for it. 

3.   Chair succession is a government bellwether. 

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Chair succession is a pivotal moment for boards. It presents an opportunity to reflect on the organisation's future needs and steer it forward strategically. For this reason, organisations must proceed carefully in their Chair searches, eschewing the obvious in favour of what’s truly needed. 

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is joined by Louise Angel. Louise is Senior Managing Director at Teneo and a leading board headhunter, specialising in Chair and Non-Executive Director appointments for UK companies. She works closely with boards on succession planning, board composition and effectiveness, and complex and high-profile chair appointments. 

“Chair succession is one of those moments where you can genuinely change the trajectory of how a board operates.“

To Louise, while companies often refer to Chairs as “running” the board, the reality is much more subtle. Chairs set the tone for the quality of the debates, challenges, and discussions. High-quality conversations lead to higher perceptions of board effectiveness, CEOs feeling better supported, and stakeholders being happier and more engaged. For this reason, when succession comes up, it is a key moment to reflect on what the company needs for its next phase of evolution, and what an effective Chair would need to look like to support and lead that evolution.

“The Chair shouldn’t be choosing their own successor.”

 Ideally, Chair searches begin 18 to 24 months in advance. Louise notes that the conversation around succession planning is less awkward if it is a consistent agenda item. The Senior Independent Director (SID) is best suited to drive the conversation, and the board should also consider the timing of Chair succession with CEO transitions to avoid too much change at once.

"I would always encourage boards to challenge themselves on some of their assumptions. Do you really need someone who has chaired before or who has direct sector experience? Or are you potentially ruling out some very strong candidates by default?”

Louise notes that Chair succession is an inherently conservative process. This leads selection committees to choose people with traditional profiles and lean on prior experience as an easy proxy for suitability. However, by questioning assumptions and expanding the search pool, firms can go beyond the handful of people everyone is chasing to uncover other strong candidates who may be better suited for the firm’s unique needs.

“If you spend the time upfront getting as much clarity as possible on the necessary candidate skillset and profile, you increase your chances of a quick and clean process, which you will only have to run once.”

For Louise, investing extra time at the beginning to clarify must-haves, nice-to-haves, and wish lists reduces the overall length and complexity of the search. Support for the SID, a decision on internal vs. external candidate tracks, and keeping the process moving also improves the search experience. Louise further advises firms to remember that candidates are assessing them as well, so appearing well-organised and aligned during the search is an advantage. 

The three top takeaways from our conversation for effective boards are:

1.      See Chair succession as a real opportunity for strategic development and not just a tick-box process.

2.     Spend time getting the brief right.

3.     Run a process that is both rigorous and thoughtful. The mechanics matter, but so do the human dynamics — and it’s the combination of the two that leads to the best outcomes.

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Once boards prioritise managing geopolitical risk, how can they successfully move from diagnosing a problem to designing a plan of action?  

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is once again joined by Colin Reed, Chief Intelligence Officer at Clock&Cloud, a software startup transforming how large enterprises manage geopolitical risk.  Colin brings his experience as a US intelligence analyst and as the architect of Salesforce’s geopolitical risk management function to the conversation, revealing how boards and leadership teams can translate geopolitical complexity into actionable insights. 

“Building around competencies already in place is a much superior method to contracting for an external problem-solver to come in and do it on your behalf."

Colin recommends starting with an audit. No business is truly at zero when it comes to managing geopolitical risk. Find out which managers and functions are already managing risk at a tactical level and use them as building blocks. 

“This is the biggest failing of the current consulting-based approach to this problem - it assumes that what works for one company will work for another.” 

 Consultants and outside experts can be useful, but they are not always the best for managing geopolitical risks. Instead, Colin recommends bringing multiple functions together – legal, supply chain, procurement, marketing, security – to form a working group that meets quarterly. Share strategic insights, bring in current-events speakers or special-topic experts, and then start gathering knowledge about where risk is manifesting in each area to inform a highly customised, forward-looking view of the company’s true geopolitical risk profile. No outside consultant can replicate this kind of deep company understanding, and it becomes the foundation for meaningful mitigation and a true competitive advantage. 

“Identifying the internal fragility is the best way to focus attention on where global risk might actually break the company. If you don’t approach it this way, you spend all your time chasing the news cycle, which is broad and full of scary things, but only a few of which are probably truly scary to your firm.”

A firm’s unique risk profile is the best insurance against noise and unnecessary expense. Large firms can overspend on mitigation or miss a big risk and still survive. Mid-size and smaller firms don’t have that grace. Focusing on real, specific risks is a more affordable and sustainable model for closing the gap than worrying about everything.

“The institutional muscle needs to be there already and running all the time. If you wait until there are issues, the problems will be outsized compared to if you were able to detect them early.”

At a bare minimum, companies need to care about and prioritise geopolitical risk. A little time spent consistently beats out a crisis reaction, even if only partial solutions can be developed with the available resources. Systems, processes, and open lines of communication help all the time, and are especially valuable to have in place well in advance of a big crisis.

The three top takeaways from our conversation for effective boards are:

1.     Despite the number of people claiming to be experts, nobody has solved geopolitics completely. Experimentation and change will be necessary.

2.    Connect with industry peers to share best practices and learn.

3.    Board members should take an interest in history – there’s a sense we live in unprecedented times, but things have been chaotic before. Everyone benefits from the grounding historical perspectives provide. 

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Many boards treat geopolitics as background noise, leaving their companies exposed to unnecessary risk. Smart boards take a different approach, closing the gap and treating geopolitical risk with the same rigour as financial, cyber, and regulatory risks.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is joined by Colin Reed. Colin is the Chief Intelligence Officer of Clock&Cloud, a software start-up transforming how large enterprises manage geopolitical risk.  Previously, Colin built Salesforce’s first-ever geopolitical risk management function, and before that, he was a senior intelligence analyst with the U.S. government. 

“Most of the business leaders we have today have had their entire careers in an unusual period of history.“

As Colin looks across history, he notes that the post-Cold War period was an unusually stable business climate. This led boards and C-suites to treat geopolitics as something governments must manage rather than their own business priority. However, as history reverts to its tumultuous norms, corporations must step back into taking an active approach to geopolitical risks.

“There’s nothing unavoidable about geopolitical risk. It very often telegraphs its approach.” 

Colin feels boards needn’t be surprised by geopolitical risk. Thanks to modern systems, it is easier than ever to model how risks can impact operations and the bottom line. Boards have learned to map and mitigate financial and cyber risks. They can learn to do the same with geopolitics, especially now that the tools exist to model even very complex situations quantitatively.

“To me, geopolitics is akin to the weather. It never goes away, and try as you might, you’ll eventually have to go outside in it.”

The best practices right now for closing the geopolitical risk gap are to stop treating geopolitics as ‘Act of God’ surprises and instead build a robust risk management framework around it. While there are many nuances to geopolitics, there are not so many that they can’t be mapped and modelled with the latest tools. Ideally, this is handled at the strategy level and should be forward-looking rather than backwards-looking or reactive. 

“I don’t think it’s sufficient to rely on a single board member, or an external advisor, to manage this problem, because doing so builds a single point of failure into the system.”

Colin feels that boards of large companies do best when they internalise the understanding that everyone must be aware of the need to track and manage geopolitical risk. This is especially true for European boards. Identifying a C-suite-level champion for geopolitical risk to build alignment across operations and identify gaps, and then investing strategically in solutions, is a cost-effective approach to building resilience. 

The three top takeaways from our conversation for effective boards are:

1.     Geopolitics can be understood and managed, and the expertise to do so already exists if you know where to look inside and outside your organisation. 

2.    Proactive engagement on geopolitics isn’t new. What’s happening now is a return to historical norms. 

3.    Quantitative metrics and modelling systems are about to revolutionise this field. 

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Beyond listed corporations, there is a vibrant world of start-ups, scale-ups, and organisations at the pre-IPO stage. What does it take to add value to these Boards, and how does the work differ from that of a listed organisation? Most importantly, how can working with these companies shape a Board portfolio career?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is joined by Susanne Chishti, Chair of FINTECH Circle, Europe’s first Investor Network focused on fintech investments. Susanne is an experienced Non-Executive Director, best-selling author, and in 2024, was named as one of the Top 100 Women in Fintech. She is also a former CNBC fintech commentator and a guest lecturer at the University of Cambridge and Warwick Business School.

“At every single stage, customer and investor expectations increase“

Susanne sees the role of Board members shifting as companies move through different stages. Initially, in the start-up stage, Board members add value by providing practical help to entrepreneurs, demonstrating a strong governance model, opening doors and developing a strong go-to-market strategy. Then, at the scale-up stage, Board members work closely with VCs and investors and add value by showing there’s a strong governance model in place and that invested funds will be well looked after. When a firm prepares to go public, the role changes again, and Board members add value by helping the firm prepare for public scrutiny and public governance structures.

“It is not easy for somebody who has managed 10,000 people in a large bank to come into a startup with 10 people and add value without killing the innovation, fast movement, and agility of a start-up"

For Susanne, it is vital that Board members have an awareness of the scale-up cycles and where their company is in the cycle. This helps inform Board members about what value they can bring. Ideally, Board members maintain flexibility and an openness to learning what’s needed in the moment. She acknowledges this requires listening, humbleness, and savvy observation of the environment.

“Lots of large private companies have not yet gone public, but they are more successful, you could argue, than large, listed companies.“

Susanne notes the private market is fairly new and expanding rapidly. Joining the right start-up at the right stage can offer a chance to experience a similar or greater level of challenge, opportunity, and success than at a listed firm. 

“In order to be inside the funnel which headhunters use, it's important to understand who the right headhunters“

To get a Board seat takes intentional networking and relationship building. For networking, Susanne recommends FINTECH Circle and FinTech conferences. 

The three top takeaways from our conversation for effective boards are:

1.     FinTech and technology sectors offer great opportunities for Board members to add value, even without a pre-existing tech background.

2.    Getting a Board seat requires an intentional plan to network and build headhunter relationships. 

3.    Look at this opportunity as a potential long-term enrichment of your life and an enjoyable extension of your career path.  and best-selling author, and in 2024 was named 

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In capital-intensive, brand-driven organisations, strategic ambition must be matched by disciplined governance. Effective governance links capital allocation to technology strategy, culture development, and measurable KPIs, so that speed and ambition balance with long-term enterprise value creation.

In this podcast, Dr. Sabine Dembkowski, Founder and Managing Partner of better Boards, is joined once again by Marco Mattiacci, a global executive with 25+ years of leadership across the luxury, automotive sector - Aston Martin Lagonda and Ferrari, Formula 1, and media. He has operated at the CEO and Board–Executive levels in capital-intensive, high-visibility environments, partnering directly with shareholders, sovereign investors, and rights-holders across the USA, Europe, China, and Japan.

“It is important that you don't have very general or first-level KPIs. You need to go into the details“

The most meaningful KPIs for Boards to monitor, in Marco’s opinion, are very richly detailed KPIs that directly tie to the progress and success of the CapEx project. It does require extra work from the Board to delve deeply into the details and have a strong grasp of the data. However, it also helps with every Board meeting and progress check, enabling the Board to understand what’s behind each KPI and what the changes mean in terms of progress against the roadmap.

 “At the same time, you need to make sure you deliver clarity and simplicity, not tsunami the Board with a massive amount of data“

To Marco, ambiguity is the worst enemy in business. Massive amounts of data create ambiguity and overwhelm. Setting up KPIs aligned with your roadmaps in each area – talent, culture, and technology – and doing the early work to ensure alignment before launching the project pays off for Boards down the line. Incoming data can be filtered for key facts and used to create meaningful yet simple dashboards.

 Marco recommends that the Executive Committee provide perhaps five pages to support the discussion of the dashboard and KPIs. No Board packs with 1000s of pages or mountains of unfiltered data. Summarising key qualitative and quantitative elements into shorter documents builds on the early work of aligning stakeholders and setting clear gates, while allowing time for meaningful discussions in meetings on project health, needed changes, and risk monitoring. 

 “The key element is to be competent“

Large capital projects attract scrutiny, and there can be tension in providing constructive challenge while preserving momentum. Yet, for Marco, anger is always outside the scope of work. Ego, anger, and frustration add nothing, and for the three to four hours of a meeting, operating as a team with an eye on results leads to the best outcomes.

The three top takeaways from our conversation for effective boards are:

 1.     Understand the KPIs and definition of success. Use simple, intuitive dashboards and scorecards to monitor progress against your KPIs and goals.

2.    Keep ego out of the Boardroom and Executive Committee.

3.    The first enemy to fight is ambiguity. 

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In capital-intensive, brand-driven organisations, strategic ambition must be matched by disciplined governance. Effective governance links capital allocation to technology strategy, culture development, and measurable KPIs, so that speed and ambition balance with long-term enterprise value creation.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is joined by Marco Mattiacci. Marco is a global executive with 25+ years of leadership across luxury, automotive, motorsport, and media. Marco served as an Executive Committee member and Global Chief Brand and Commercial Officer at Aston Martin Lagonda, and was the Team Principal of Scuderia Ferrari Formula One, and President & CEO of Ferrari North America and Asia Pacific. 

“Don’t approve a budget. Approve a sequence of proofs.”

For Marco, large investments are not budgetary line items. They are roadmaps and processes. Succeeding with a CapEx project requires careful assessments of the technology, the talent, and the company culture — what he calls the Three Interlocking Roadmaps. Stage-gating funding against predefined KPIs preserves governance leverage and keeps investment disciplined as conditions change.

“AI that outpaces your ecosystem doesn’t create advantage. It creates fragility. And fragility at speed is the most dangerous condition a board can be blind to.”

In addition to internal assessments, Marco recommends evaluating the company’s full ecosystem, including suppliers, stakeholders, and clients. Will they be able to interface appropriately with your company during and after the CapEx investment? What limits or risks do you need to account for as a part of the process?

“Ambiguity is the worst enemy of business.”

Marco notes that preparation is key to removing ambiguity. This may require significant effort at the beginning to ensure that technology and talent/culture roadmaps are fully intertwined and aligned, both overall and for short- and medium-term gates. Overlaying roadmaps and grid scorecards based on hard data ensures ongoing alignment and progress.

“You need to establish a very good dialogue.”

Marco is familiar with the tension between Boards and Executive Committees during intensive CapEx projects. Boards worry they step on toes, and managers want to protect their turf. In a managerial role, he gets the best outcomes by trusting the Board’s wisdom and helicopter view rather than an operational viewpoint. Boards, in turn, can provide support and a longer-term perspective.

Marco notes that technology can provide real-time information about culture, talent, governance, and organisational dynamics. Firms can continually survey and monitor, which is important in high-pressure, high-profile situations.  This tangible data, blended with qualitative data from strategic conversations and informal sentiment gathering, closely monitors culture and talent dynamics within the company and across the full ecosystem. 

The three top takeaways from our conversation are:

•        A CapEx investment is not a budget line item. It is a sequence of proofs and gates that guide disciplined spending.

•        Consider the impact on the full ecosystem, which includes suppliers, stakeholders, and clients.

•        Once you have your vision, assess the culture and talent to bring the right elements forward to meet your goals.

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Comply or Explain is sometimes treated as a procedural exercise. However, the true purpose is to encourage thoughtful decisions, support accountability, and promote open communication with stakeholders. 

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is joined by Kelvin Ernest, a governance professional with extensive experience navigating evolving regulatory expectations and corporate reporting practice. As a Senior Policy Associate in the Financial Reporting Council’s Corporate Governance and Stewardship team, Kelvin contributes to stakeholder engagement, policy development, reporting analysis, research, and the development of the updated UK Corporate Governance Code.

“The biggest takeaway for boards is that it encourages them to think carefully about how each provision fits into their own individual contexts.“

In practice, the UK Corporate Governance Code operates at two levels. Companies apply and explain against high-level principles and then address the more detailed comply or explain provisions. Companies can choose to follow the recommended approach or take a different route that better fits their circumstances. For Kelvin, this is part of how the Code recognises that one size doesn't fit all and that a well-reasoned departure can be entirely appropriate.

“The flexibility is a real strength of the UK model.”

Kelvin knows that 'comply or explain' is widely debated. For him, in rules-only systems, there’s too much formulaic behaviour and box ticking. The UK model allows companies to tailor their governance to their individual strategies and business complexity. 

“More companies are moving away from boilerplate reporting.”

Under the current model, Kelvin notes that companies are shifting what they share. There’s less generic, vague, and boilerplate language. Rationales are clearer. Where there are temporary departures, there’s more insight and disclosure around timeframes, and more evidence of genuine board discussions.

“Explanations don’t exist in a vacuum.”

For boards wondering how to show an alternative approach is best, Kelvin says a good place to start is by linking it to company strategy and culture, day-to-day operations, and the nuances of the industry. Where possible, he recommends outlining the board’s decision-making process and what was considered. 

“Investors want clarity as to why a departure was made and how that supports the long-term value creation of the company.” 

Kelvin knows investors find it hard to form a view or make decisions based on generic or vague explanations. They want clarity, specifics, and links to a company's reality. Kelvin notes that too many people believe transparency means revealing confidential details. He says it is more about providing meaningful context, which is the basis for building trust. 

The three top takeaways from our conversation are:

1.     Comply or Explain is about thoughtful governance and not just about reporting.

2.    High-quality explanations show accountability, demonstrate transparency, and reassure stakeholders that the company is thinking about decisions for the longer term.

3.    Engagement with stakeholders strengthens trust, helps boards refine their governance approach, and instils confidence in investors. 

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