Lessons learnt on the PASS Board
My (very short-lived) tenure on the PASS Board ended February 26th. As most of you know, PASS declared insolvency, sold many of it’s assets to Redgate, and is now almost entirely closed. I wanted to reflect on my short experience to share lessons that I think are helpful to the people working on successor projects or alternative solutions.
Running an effective board
PASS had a Board for 20 years and I came in after they’d already voted for insolvency. Needless to say, my experience generally wasn’t going to be typical! That being said, some of my experiences did appear to be typical for PASS Board members.
Directors
Almost everyone on the Board were data professionals and not necessarily experienced business leaders. This led to a gap in their ability to assess fiscal health and they relied on external opinions to determine if the organisation was sound.
All Directors should go through a Business Finance basic course, as well as a course on director’s duties.
Information
The Board were not given ready access to the company’s financial position and management information and there was no data room / Board space to retrieve information. This made Board members reliant on just the minutes of past meetings as a means of getting up to speed.
Produce information packs and use tools like Microsoft 365 to make an appropriate space for the retention of information by Directors.
With no view as to with was made available before I joined, it appears like very little information or education was provided to Board members about the implications of insolvency to help them make decisions. Separation of advice and counsel occurred weeks after the voting decision was made.
Financial scenarios and governance implications should have education material and clear guidance attached so that Board members who bring different areas of expertise can make informed decisions.
Governance
Under times of stress, it’s easy to ditch processes that slow things down so you can get sh*t done. Unfortunately, this can lead to mistakes or failing to ensure required standards are kept.
Ensure Directors, and in particular the Executive Directors, champion processes and ensuring that no steps get skipped during important decision making or processes.
Talent strategy
The tightly coupled management company had high costs for PASS that proved difficult to reduce during lean times such that there was roughly $1 million of debt associated with the cancellation period alone.
Use multiple agencies with lower commitment contracts to operate a low head-count business.
The management company (C&C) ended up making most of their staff redundant. Many of them had worked for C&C and PASS for more than a decade. There was a real human cost to PASS’ lack of ability to be sufficiently revenue generating last year. 😢
The fact that C&C, however, were so tightly linked and so many of the C&C employees were effectively PASS employees was a big issue for me, as IR35 rules in the EU does not look favourably on employees masked as contractors.
Do not be the single client and do not have just a single client.
Communication
A lot of the communication both internally and externally for PASS during the insolvency period felt lacking. A part of this was the lawyer “say nuffin to no one” advice. Another part was busyness and I think another part was not being prepared to handle the emotions on all sides.
I all too commonly fall into the trap of not communicating when it’s hard or when people’s feelings are involved. It’s something I need to work on and I tried to communicate as much as I could on social media to impacted parties within the remit of what I was allowed to say based on the legal counsel.
Some serious decisions were made quickly without discussion or input from the wider group that locked PASS into a route, when taking the time to keep people updated or in discussions could have led to alternatives or at least broader consensus.
Talk to people more during a crisis.
I still don’t think I’ve dwelt enough on this topic and I’ll be thinking more on this and how I can personally improve.
Strategy
Many, many people including on the PASS Board over the years had highlighted the risk of generating 95% revenue from a single product. This business model meant the organisation could not flex with the disruption of COVID. The high cost base and reserves that were only 20% of annual costs meant that they could not survive the disruption.
Diversify concentration risks in your portfolio — whether it’s products, stocks, or staff!
Wrap up
Many of these lessons are not novel and the failures they come out from are also sadly all too common. I hope we can avoid these flaws in the commercial-driven and community-driven efforts that have sprung up and I look forward to seeing things grow.
