By Pascale Gara
This was one of a number of questions which sparked debate among financial services executives at an industry dinner hosted by HW Global Talent Partner recently in London.
The informal networking event was held last month to offer advice to financial services executives looking to launch and develop their NED careers.
Guest speaker David Stewart told delegates how he has built a non-conflicting NED portfolio, predominantly in financial services. The former Chief Executive of Coventry Building Society is now Chairman of Enra Group, Chair of the Audit and Risk Committees of M&S Bank and HSBC Private Bank (UK), and Audit Chair at LSL Property Services PLC.
For executives considering taking on their first non-executive directorship, one of the key considerations is whether they can continue in their full time executive position and still fulfil both roles effectively, or retire from executive life before concentrating on developing their NED portfolio.
One argument put forward round the table at the Mayfair dinner was that some CEOs would rather have their executive team fully committed to their business. But others felt companies would benefit from their executives gaining NED experience, bringing an external perspective and additional insight into boardroom dynamics. This is especially true if the NED role is in a complementary or affiliated sector.
For the executive, combining their full-time position with a first NED role will also help the transition from day to day management of a business to life as a non-executive director, meaning they are well prepared for the next phase of their careers and are not stepping into the unknown.
Andrew Merrick, CFO & Regional Managing Partner at Irwin Mitchell LLP in Leeds and a non-executive director at Market Harborough Building Society, who attended the dinner, said: “Whilst I have found the time commitment of an NED role alongside a full on day job challenging, I do think it brings benefits to the day job if you are prepared to put the extra (weekend and evening) time in.
“Taking the time out of the day job to think about things from a non-executive perspective across a broad range of issues can cause you to think a little differently about your executive role. I also think the conscious recognition of the need to switch out of executive mode is useful in easing your way into a non-executive position.”
Bryce Glover, Executive Director at Echo Financial Services Ltd and also a non-executive director at Newcastle Building Society and Cygnet Properties & Leisure PLC, also believes the advantages outweigh the disadvantages.
He said: “I have been fortunate in that one of my NED roles and my executive responsibilities are both in the financial services sector and I have found these two roles complementary. They provide a wider perspective on industry issues and, hopefully, allow me to make a tangible contribution for both employers.
“Of course, there are times when some flexibility is required but juggling priorities is something we all live with day to day and, for me, the benefits far outweigh the disadvantages. I am always learning and being allowed to run both roles in parallel is fulfilling and enjoyable. I wished I had taken the opportunity earlier in my career.”
Adrian Coles, former Director-General of the Building Societies Association, also attended the dinner. Now a non-executive director on the boards of the Financial Services Commission (of Gibraltar), Housing Securities Ltd, Progressive Building Society, Reclaim Fund Ltd and BSA Pension Trustees Ltd, and Chair of the Consumer Advisory Board at Fairer Finance, he said: “I was lucky enough to have a number of NED roles while a chief executive.
“There were two main benefits – it helped hugely in understanding how the NEDs in my own organisation saw their role, and what issues they faced as an NED. Secondly, the way I was given management information as an NED at other organisations gave me ideas on how I could improve the information flow to my own NEDs.
“Transparency is important; I required the explicit permission of my Chair to take any external appointment, and all appointments, and any fees earned, were fully itemised in my firm’s annual report.”
Other topics discussed at the dinner included the pros and cons of having a diverse NED portfolio and what makes a good headhunter.
Non-executive roles can range from sitting on a PLC board where board packs are refined and provide a quick dashboard view, to being an NED on a private equity backed or growth business where you need to ask more questions because all the required information isn’t always supplied.
Another consideration is that a non-executive position at a PLC can be remote, with a heavy governance focus, whereas NEDs may feel they can have a more open discussion and are making a greater contribution in a smaller business.
Adrian added: “I’ve served on the boards of a building society, co-operative societies, a housing association, charities, trade associations, regulators and ombudsmen, schools in both the private and public sectors, and private limited companies.
“I’ve come to realise that there is no perfect form of corporate governance; each has their advantages and disadvantages. Nevertheless, there are some common issues and cross pollination of ideas can be very helpful.”
Getting that first NED role can be difficult; this is where your relationship with a trusted executive search firm specialising in non-executive director recruitment will pay dividends.
Adrian outlined what he thought made a good headhunter: “Someone who has taken the trouble to meet you outside of the process of recruitment for a particular role, and therefore knows your strengths and weaknesses before putting you forward.
“Someone who is able to advise you on those strengths and weaknesses, and knows – better than you perhaps – what you might be suited to. Someone who stays in touch after you’ve been rejected for a role, and gives honest feedback. And someone from whom you can take broader advice on your executive and NED career development, rather than just piecemeal advice as particular roles come up.”
HW Global Talent Partner recruits Chair and NED positions for a number of leading financial services providers, as well as firms in the consumer, retail, technology, pharmaceuticals and renewable energy industries.
If you would like to discuss NED opportunities please contact Pascale Gara, who heads our Chair/NED Practice, at firstname.lastname@example.org or +44 (0) 113 2432004.