Milan Shah is director of Virani, a food manufacturer based in Wellingborough, Northants, that is keeping retailers supplied despite the problems posed by coronavirus. As one of the IoD’s first members to have become a Chartered Director, he explains how the qualification has equipped him to lead his firm through the emergency
How has your company been affected by the pandemic?
We have seen a short-term increase in retail grocery demand that can be met only from our buffer stocks, as the raw materials we require are several months away on the other side of world. But there is uncertainty about demand over the medium term as retail ranges get reconfigured.
Like many other organisations, we’re dealing with a reduction in our active workforce on account of the isolation and distancing measures. This has required a rapid revision of our working environment and practices to ensure that we minimise contamination and protect our employees.
We’re also dealing with lockdowns in countries such as Thailand and India, which are affecting our supply chain.
What early measures did you take to manage the risk?
As part of our scenario analysis, we tried to anticipate any potential disruption to our supply chain. We began ordering more stock from January, thus accumulating a contingency buffer of raw materials. In order to prepare for the potential workforce disruption caused by staff illnesses, we recruited extra fixed-term labour in February. This has helped to cover any isolation absences.
What has the coronivirus crisis taught you about leadership?
The job of a leader can sometimes require delivering uncomfortable truths, but it is important to also show the organisation how to navigate through the crisis. We had to educate our team early on about the nature of the virus. We also had to prepare people for the possibility of having to work with the isolation and distancing measures over a sustained period.
What prompted you to take the Chartered Director qualification?
I was approached by the IoD in 1999. The institute was seeking guinea pigs for the new programme, which it had designed to improve standards in business leadership by developing an aspirational qualification for directors similar to the professional qualifications for lawyers and accountants. The opportunity sounded exciting to me – anything that improves you should always be looked upon favourably.
How has it helped you?
I took the course at the start of my career and was by far the youngest to do so at the time. There’s no point in taking it at the end of your career just to rubber-stamp your credentials. Everything I learnt has proved immensely useful. I’ve been able to apply what it taught me in a number of areas.
The insights I gained about the strategic aspects of being a director and the importance of financial discipline and sound risk management have been particularly beneficial. The course also improved my understanding of how to manage people.
What impact has it had on Virani?
Our industry is tightly regulated, which places additional responsibilities on directors. Supplying industrial foods is all about risk management and technical excellence, so that’s where we have tried to focus our efforts.
At the moment we’re planning to spin off a division, for instance. It’s important to feel confident in what we’re doing here, as corporate restructuring has to be very rigorous in a business such as ours. We’ve also tried to get better at anticipating trends, such as the popularity of gluten-free foods and plant-based proteins. Improving our awareness has helped us to become Europe’s largest miller of chickpea flour.
What constitutes good corporate governance to you?
At the simplest level, it could be defined as the quality of the relationship between an organisation’s directors and its shareholders, but that is a very narrow view. The definition is being expanded to cover aspects such as the levels of transparency an organisation should have and how directors’ pay should be determined, for instance.
I think that other issues, such as how directors relate to a wider range of stakeholders and how we incorporate more parts of the organisation into setting the direction of the company, will evolve further too.
How do you think these aspects will evolve?
The question now is how far we should go in making it a legal duty to take on board the views of other stakeholders in a business. The British system of corporate governance works well largely because it’s simple: if you’re on a board of directors, you know whom you’re accountable to and on what grounds. As soon you start migrating away from that governance model and the traditional director-shareholder relationship, this simplicity will be lost and you’ll start getting into some of the complexities of the non-profit world.
Although I measure success in a much broader way at Virani, you can measure it in terms of your profit or balance sheet. Success when running a university, on the other hand, is a much more nebulous concept.
We should hold conversations with the non-profit world to understand some of these complexities before hoisting all of it over into the for-profit sector. There are some good ideas, but this needs to be approached carefully…
This is an updated version of an article that appeared in the April/May 2020 issue of Director magazine
Become a member of the IoD
The IoD has a range of memberships for directors, founders and co-founders, providing all the resources and facilities needed to enhance your business. To find out more about membership offerings and to join today, visit iod.com/membership