View from mahogany row must take in the customer's perspective

What sort of people do we want on our corporate boards? How about sharp thinkers with business experience and the common sense to understand how their business relates to the real world? That would be a start.

A good corporate board ought to fit together like the characters of a classic heist film. Like The Dirty Dozen or Ocean's Eleven - preferably without the criminal associations.

Instead of the explosives specialist, the muscle guy, the brains and the guy who kills silently with knives you'd hope to find directors with specialist skills like law, accountancy, marketing and strategy sitting around the boardroom table.

But there should be room for all-rounders too. Boards need the kind of individuals whose success and experience make them alert to the best and worst practice in all the disciplines of business. Those are the individuals you'd hope would be able to see the big picture. To keep a focus on the customers rather than just numbers.

The inability to see your company from a customer perspective is a potentially fatal flaw for any business.

It is an obvious trap for management but is also something for boards to consider as Contact Energy has so clumsily proved.

Yesterday Contact disclosed that it had shed about 40,000 retail customers during the year. That's pretty bad news in itself - although not material in relation to the size of the company.

But managing director David Baldwin was forced to publicly concede that the losses were linked to the high-profile efforts of the board to ram through large fee increases in the face of widespread shareholder opposition.

The admission is one which confirms a monumental failing of the board. It acted in its own self-interest and ultimately in a manner which was damaging to the company.

It didn't take a crystal ball to see what a PR disaster the AGM of last October was going to become.

The story was highlighted as a serious issue in nearly every major business publication before the meeting, which was held at the height of a financial crisis that had the whole world more focused on corporate pay than ever before.

After enduring a humiliating public grilling from the likes of Shareholders Association chairman Bruce Sheppard, the directors voted to nearly double the total fee pool. But just a day later the public outcry at a consumer level had grown so large they were forced to back down.

In sharp contrast, lines company Vector decided to back down on its proposed fee increases before the meeting. Consequently, chairman Michael Stiassny was showered with praise by his shareholders when he fronted up on the day.

Contact's directors aren't stupid. They are experienced business people with specific skill sets. But they behaved stupidly. They failed to see the link between their own small shareholders and their customerbase.

The ability of a board to railroad small shareholders with little consequence has been curtailed by a harsh commercial environment where consumers are paying ever more attention to the actions of those at the top.

It is not just about fees - which provide a perennial source of conflict with a segment of the shareholder base.

It is about keeping up with social trends and behaviour and staying in tune with the mood of the people. After all the people, if nothing else, are the customers.