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THE PERFECT CHOICE OF director WHEN TROUBLE BREWS.

Byline: KENNY KEMP

Sue Clark does not shirk from a business challenge - and she has faced many awkward situations over her career. After helping to build up one of Europe's biggest beer businesses - including buying Peroni - she now has a portfolio of non-executive directorships, including as a board member of Edinburgh Business School.

Some people relish a challenge. If you scan Clark's career path, you will see she has had to navigate change, disruption and growth in business at an astonishing level.

This, in turn, makes this Heriot-Watt University MBA graduate and non-executive director of Edinburgh Business School one of the most sought-after and respected female non-executive directors in the UK.

She has enjoyed the buzz at a series of high-profile companies, which is probably why she finds solace in the recreational activity of bee-keeping at her leafy home in Hertfordshire, although being a keen apiarist and gardener may have more to do with a BSc degree in biological sciences, which she completed at Manchester University.

"If I think about my career, one of the themes - and I don't know if this is lucky or unlucky - is that I've always worked in companies that have challenges or aren't in the status quo,'' she says.

"I was there in the glory days of ScottishPower,'' she says, cautioning herself that it might not be right to state this.

Yet there is no doubt it was a high point for Scottish business. Ian Robinson, later Sir Ian, was in the driving seat as chief executive with Ian Russell, the current chairman of the Infrastructure Commission for Scotland, as finance director.

ScottishPower, emerging from the South of Scotland Electricity Board, was the first public company to start the consolidation among UK utilities after privatisation in 1990 and Clark, who had worked with the Central Electricity Generation Board, joined as investor relations director in Glasgow.

Until then, there was a group of 12 regional electrical companies across the UK. ScottishPower's bid for Manweb, buying that business in January 1996, opened the floodgates.

The company moved into multiutilities, buying Southern Water, created Scottish Telecom, which was later floated as Thus, and then bought PacifiCorp in Oregon, the US utility.

Clark made headlines for working to the end of her pregnancy and her daughter Lucy was born hours after sealing the PS4.5bn deal. By 2000, ScottishPower had a market capital of around PS10bn and a turnover of PS6bn.

"The business at the time was at the heart of the FTSE100 and we did a lot of things we were really proud of. During my time there, we were voted in The Times survey as The Most Admired Company in the UK. This focused not only on business performance but also on the work we were doing in the community and on sustainability."

It was a relentless job that was rewarding for a high-flying woman in her early 30s. "The Scottish utilities got a much tougher deal than those in England and Wales and we had to work hard to get the investor community to understand the potential of ScottishPower.

"It was a surprise that we stepped forward and led the industry consolidation. The management team at the time was outstanding.'' Her job was not without its challenges. A major substation explosion resulted in the death of two workers, then thousands of customers were cut offfrom their electricity supply in a blackout during Christmas and New Year.

It was Sue Clark's job to manage the communications during this fraught period. Learning was a key part of the organisation with Robinson leading the government's Welfare to Work initiative and establishing ScottishPower's own learning and continuous training culture. This development in people led Clark to Heriot-Watt University.

"I went to do my MBA on the back of a ScottishPower programme which was part of a business-sponsored MBA.

"A whole cohort of management was sponsored and went through it.'' Clark's thesis was on the market valuation of utility companies.

"The great thing was the way the MBA was structured, it was done in partnership with other Scottish companies. Students were working and learning at the same time. It is a model that worked for me because you can take what you are learning back into the business and vice versa.

"You were able to see the academic underpinning of what you were doing at a corporate level.'' After the birth of her second daughter, 11 months after her first, Clark moved from ScottishPower to be nearer her own family in England.

She joined Railtrack as a director of corporate affairs. The UK's railway industry, also undergoing privatisation, was in a controversial state where the railway assets and stations were separate from the train operating companies, which were bidding for rail passenger franchises.

However, there had been massive underinvestment in rail infrastructure for generations and Railtrack hit the news for all the wrong reasons.

"It was a torrid two years. I arrived after the Ladbroke rail disaster [when 31 were killed and 417 were injured] and went straight into the Hatfield crash [four killed and 70 injured] in 2000. There were subsequently two or three other crashes.'' Moreover, Clark also had to deal with the bereaved and the injured from the rail disasters.

"This was a very personal learning experience within business. I don't think there are any right answers but it is very difficult when it comes to corporates showing compassion for those who have been traumatised.'' While the short-term grief and pain had to be managed, it is the longer-term impact of survivor groups that was more difficult.

"The reality is that you can't give people what they really want, which is the return of loved one who has died in a rail crash, or their lives back to the way they were before.

"We kept working with people but it became clear we were not able to give them what they really wanted.'' As head of corporate affairs, one of the biggest issues was managing the external perception, angry shareholders and supporting the much-maligned chief executives Gerald Corbett and Steve Marshall.

After Hatfield, there was fresh investment in the railway which led to the closure of large sections for upgrades. Railtrack faced the lion's share of public and shareholder opprobrium at the disruption and the state of the UK's railways. This eventually led to Railtrack losing its licence to operate and the creation of state-owned Network Rail.

"We lost the trust of the government and the travelling public and the operating company was put into administration in 2001. When the administrators came in they asked me what I was going to do and I said, 'I'm not going to work for you because I don't think this is right.' "Myself, the finance director and company secretary took the top company, which was not in administration, and we set up in a Regis office, and then fought a battle for the shareholders, who weren't going to get any money out of the administration.'' Her small team managed to ensure a substantial payout for shareholders, many of them small investors who had been encouraged to invest in the railways.

They also supported the shareholders' legal battle against the then transport secretary Steven Byers in the Labour government.

He was subsequently found guilty of malfeasance over his decision to call in the administrators.

It would take Network Rail many more years of massive investment in the railway system to restore public confidence in the railway sector.

"We wound up Railtrack and I needed a new job,'' she says. She was keen to move into a sector that had a happier outlook, far less emotionally charged, so she joined the global beer business, SABMiller, which grew from South African Breweries.

"I was fed-up getting a torrent of abuse when I told people I worked for Railtrack. I wanted to go somewhere that was fun, global and a lot less contentious. Beer is a fantastic business because it is so social and it adds to people's pleasure, if it is consumed properly.'' It was an effervescent time to be joining one of the emerging global players. Carlsberg, Heineken, Miller, Anheuser-Busch, later AB InBev and owners of Budweiser, were the dominant forces as SAB moved its listing to the London Stock Exchange.

In 2002, SAB bought Milwaukeebased Miller Brewing Company, famed for its Miller Lite. The portfolio included Castle Lager, Pilsner Urquell and later Peroni and Grolsch.

"Joining SABMiller after the Miller deal was like joining ScottishPower because it was right at the early days of SAB coming into the UK.

"They were not well known and needed to come to the UK to raise capital to build the global business. We had a very small team here in the UK that ran the global business and I played an instrumental part in many of the acquisitions.'' Clark joined as corporate affairs Director and moved into general management becoming involved in shaping the brands, the marketing and steering the growth of the European business, which extended to Vladivostok and from Finland to the Middle East with 120 brands. She moved to Switzerland to steer the growing business.

"I always remember that Peroni, the great Italian beer, was bought on my birthday. The finance director always said he'd bought it for me as a birthday present,'' she says.

"When I went on to run the Europe region, that was always my favourite brand."

Consumer tastes were rapidly changing and the beer market had to innovate to keep up. Switching to the smaller craftbrewing industry was one fresh direction.

Clark was involved in buying London brewers Meantime, the first dedicated craftbrewery in the UK.

"Younger beer consumers were looking for something different, that was authentic and not what their dads had been drinking," she says.

"We had to work hard on driving the costs out of the core business and then put investment behind innovation and marketing. I was interested in how we could get more women into the beer category.

"We did a lot of work around how women have different taste profiles for sweetness and carbonation to male consumers.'' This was the sensory properties of food and drink and how individuals experience this through their senses. It even involved the tactile qualities and aesthetics of the size and shape of bottles and glasses.

"We were really at the forefront of where consumers' taste was going and it became a good bridge later on into my non-executive portfolio around consumers and where and what they are wanting,'' she says.

In Scotland, Scottish & Newcastle was still a major regional beer and cider player with McEwan's, Kronenbourg, John Smith's and Newcastle Brown Ale among its many brands.

"There was a lot of heartache and long nights about Scottish & Newcastle over should we get involved in that transaction," Clark said.

"Perhaps, with hindsight, we should have done. We didn't have a big UK portfolio so we would have retained many of the brands.'' Instead, S&N was sold to Heineken in 2008 with some of its international assets going to Carlsberg. Heineken became the dominant brand at the expense of regional beer names.

"Hindsight is a perfect science and the SABMiller business grew from being the bottom of the FTSE to a top 10 FTSE company." she says.

"When we were taken over by ABI it was the biggest UK consumer transaction that had ever been executed.'' This was in the summer of 2016 and the AB InBev (ABI) deal was worth PS79bn, although some fund managers believed this undervalued the beer portfolio, aided by a sharp fall in sterling a few weeks after the vote to leave the European Union.

Clark loved her time growing the beer business but the ABI model is to remove all the executive tiers and Clark was leftpolishing up her resume again. This time, she decided to switch and build a portfolio of non-executive directorships.

"SABMiller was such a fantastic business, I thought I'd never find an executive role as good as this again. But also, it is exhausting being in operational roles," she says.

"I ran the European business and was based in Switzerland and travelled the whole time. The beer business means working all day and in the evening going out and meeting customers in bars and clubs.'' The gestation period of the SABMiller takeover gave Clark time to set in train her non-executive career. She was asked to join the board of Britvic, the softdrinks business which shared similar marketing and consumer issues with alcoholic drinks.

"This was good for me and I think it's important with your first www.insider.co.uk Glasgow's largest employers, with Will's Woodbine and Golden Virginia, and a company paying out PS10bn in dividends to shareholders and fund managers during the nine-year tenure of departing chief executive officer Alison Cooper.

"Tobacco is a legal business. If it is a legal business, then you want it run by people who are responsible and going to do it in the right way," she says.

"One of the other themes of my career is that I have been in regulated businesses, and particularly when you've been in alcohol you only preserve your licence to operate as a business if you are focused on making sure you are selling to people who are over-age and in a responsible way. That's key with tobacco too.'' Clark believes that if tobacco and alcohol are not run properly and responsibly then an illicit market develops which leads to criminality and unregulated products which do not have the quality and standards. Her work at Imperial is certain to increase as she helps recruit a new leader to take over from Cooper.

Back at home, she finds time to take her two dogs for a walk in the fresh air, look after her honey bees and contemplate the business challenges in her various companies.

"I have a good balance. Being a non-ex is quite a difficult job. When you're an executive, you wonder what they do, and when you become a non-exec you realise there is a lot to consider, particularly when you chair board committees."

One bugbear is she feels there are still too few women in the top flight of business. She says: "We need more women executives and chief executives and this is one of the areas which still needs a lot of work.

"It is hard being an executive for either sex, so we need to embrace more flexible working and more sabbaticals. I think the relentless pace of business means you need more flexibility around people moving in and out at the top.'' She says this is no quick fix, but it is something the business world must continue to focus on. It's another challenge that will keep Clark motivated and determined to make a difference. | A version of this article first appeared in Panmure House Perspectives, the magazine of Edinburgh Business School, Heriot-Watt University non-executive director's role to move into something that is analogous with what you do, because you then have the confidence to look at a new business in a different way.'' Soon after this, she was preparing to join AkzoNobel, the Dutch paints and coatings giant, famed for its Dulux, Polyfilla and Cuprinol brands, but it was in the middle of a heated takeover battle and she had to wait until it was resolved.

"There is a transition from becoming a serving executive to becoming a non-executive director,'' she says.

The accepted role of the board is setting the strategy and ensuring it is implemented by the executives through proper governance, and the creation of a set of values for that company. According to the text books, the duties of a non-executive director are to ensure that the company is operating properly and in the best interests of the shareholders.

"In today's world, companies have to operate more than simply in the interest of shareholders. Our duty is to operate in the best interests of all stakeholders and there is a much greater emphasis on employees, communities and broader society as stakeholders,'' she says.

"When you are thinking about joining the board as a non-exec, you have to think how you are going to add value and does it play to your skill set.'' AkzoNobel has a European business model and Clark was invited to join the supervisory board. Again, she was returning to a challenging work place. "It was business that had just fought offa hostile takeover and had a lot of challenges.

"It had to dig deep to do a lot of difficult things to change the culture and the way it was operating - and in the areas it was operating in. I'm glad to say, it has achieved this.'' Did she feel the difference between the supervisory model and the Anglo-Saxon model? They are more perceived than real. At AkzoNobel, the supervisory board and the executive board, which are separate for legal reasons, are run closely together. There is not a huge difference between how the advisory board system works.'' In essence, it is about consulting the works councils and the business communities around process and the way things are implemented.

Clark then joined one of the emerging food companies, Bakkavor, an Icelandic family business which provides freshly prepared food for the major supermarkets and high street chains across Europe.

It played into her knowledge of global FMCG, [fast-moving consumer goods]. "I joined for the IPO [initial public offering] and it was a bit of a blast from the past with the original IPOs from the regional electricity companies.

"The attraction was to get involved in an IPO and see it through its listing and be part of a new business. It is expanding quickly in China and the United States.'' In 2018, Clark joined Imperial Brands, the global tobacco business and owners of cigarette brands Winston, Gauloises, Gitanes and Lambert & Butler. It also owns brands well-known by those who roll their own tobacco, Rizla and Drum.

Today's challenge is moving smokers from combustible sticks on to new products, such as vapes.

"For me, the attraction - and I admit some people wouldn't go into nicotine - is how can you move people quickly from cigarettes to the next generation products? "By this, you are effectively creating a new category in many dark markets, where you can't merchandise or advertise. It is a very big challenge and a business that is pivoting from one category to another.'' While some might shirk from involvement, Clark is clear about Imperial Brands, once one of in focus: Biography SUE Clark joined ScottishPower in 1992, just after it listed and worked at Railtrack and had to deal with the aftermath of railway disasters and investor meltdown.

She moved to brewers SABMiller. One of her first non-executive directorships was with AkzoNobel, which had fought offa hostile takeover battle.

Today, she sits on the board of Imperial Brands, the global tobacco business moving to next generation products, and Tulchan Communications, a financial communications outfit which works with many of the City's leading businesses.

The business was at the heart of the FTSE100 and we did a lot of things we were really proud of. We were voted the Most Admired Company in the UKI was fed up getting abuse when I told people I worked for Railtrack. I wanted to go somewhere funFor me, the attraction of joining Imperial Brands is how can you move people quickly from cigarettes to the next generation products?

CAPTION(S):

In 1998, Clark with daughter Lucy as she goes back to work

Climbing mountains in the late 90s
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Title Annotation:Features
Author:KENNY KEMP
Publication:Insider Monthly
Geographic Code:4EUUK
Date:Dec 5, 2019
Words:3266
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