The Board, starting with the Chairman, were stuffed from the beginning because they used an outdated and dangerous corporate accountability structure. Specifically Borghetti and later Scurrah, were on the Board of the company as “managing directors”. This is just plain wrong.
The roles of “manager” and “Director” are utterly and completely seperate and combining them is and was a recipe for disaster. The role of the Board, and Directors, is ultimately risk management in its highest form. - Preserving the assets of the company, including its reputation, for the benefit of its shareholders.
The role of the “manager” usually called the CEO is to employ the assets to make money. This is NOT the role of the Board.
So you can see that being an “MD’ leaves you hopelessly conflicted. On one hand you must manage risks, on the other hand you must accept risks to make money.
The conversations are different.
CEO and staff: “what is our business plan?”
‘’Board: “Do we accept the CEO’s plan?
You can’t combine the two roles.
Mr Borghetti left the airline in March 2019.
"What the board can do if they don't like the way the CEO is running the company is to change the CEO. And that's eventually what the board that I led did. It was not prematurely, it was not done in an undignified fashion," Ms Bryan said.
"I think he'd done his stuff and the board thought it was time for a change."
Mr Borghetti told Four Corners that he first flagged leaving the company in 2016 but stayed on for another three years at the request of the chair.
‘’The Board didn’t act soon enough - couldn’t act because Borghetti was a Director and so was part of the conversation, he couldn’t be kept out.
If you are a CEO, you are only “in attendance” at Board meetings and when you leave the Board can have a warts and all discussion about your performance or lack of it. Borghetti stayed at least three years too long. If you are CEO dignity doesn’t come into it. The Board gets nervous about what you are doing, you get fired, period.
This is why Virgin went under.