Will Dawkins: Tactics for getting that board role – Get skilled-up, widen your horizons and prepare
This week we welcomed Will Dawkins, Head of Board Practice at Spencer Stuart to BCKR to share his thoughts with us.
The current situation
The current situation for lawyers on FTSE 100 boards has neither significantly changed nor improved over the last 5 years. There are currently 12 NEDs who come from a true professional lawyer background on FTSE 100 boards. In the US it is more like 50% of companies who have a lawyer on their board.
The reality of the FTSE 100 market is that there are probably only 780 positions available at any one time and 1% of those will be open to lawyers.
A typical board will have the following NED seats to fill:
- 2 executives (these will be people who have managed a large business)
- 1 SID
- Chair of Audit (a CFO or Audit person)
- Chair of Remco (someone who has lived with REM e.g. a former CEO or perhaps someone from an HR background)
- 2 seats will go to the next REM and Audit chairs
- This leaves 2 potential seats for newbies – one of which could of course be a lawyer.
In general terms in the UK, a board’s role is about strategy and ensuring its implementation and challenging management on their business decisions. There is therefore an emphasis on the possession of business skills.
A very typical question a headhunter will ask a prospective candidate is “tell me a story about how you coped with an alien situation?”
- Do you have the ability to deal with complex scenarios?
- Are you able to make big decisions based on limited information?
There is therefore considerable benefit in looking at roles in other organisations. Other options might be:
- Regulatory agencies
- Government departments
- Trade organisations
- NHS trusts
- School governorships
- Major charities
The organisations are interesting and really need people like you.
What are the pros and cons of inviting a lawyer onto your board?
- In relation to quoted companies there is an increasing emphasis on diversity and not just in gender and race but the desire to have diverse insight, personal characteristics and thought around the board table.
- In this highly regulatory environment, the agenda is often focused on compliance and regulatory matters. Lawyers are well placed to add value on these complex issues.
- The ability to read board papers and drill down through the detail to come up with 3 important questions is second nature to a lawyer.
- A commitment to accuracy is useful in the boardroom and reassuring.
- Morality – need people who are able to make the right call.
- Business-minded – law firms are one of the most successful business sectors. Lawyers broad exposure and perspective on business should help. But you need to be able to present yourself as good business people through your role as a lawyer.
- Managing ego.
- Complexity – your ability to deal with complex financial structures.
- Commoditisation: the experience of addressing the business
- They don’t need a lawyer on the board for legal advice.
- You have the wrong skill-set. A lack of business background to challenge the CEO. A lawyer is happier advising than making decisions.
- You are too precise in your thinking.
- Your perceived lack of commercial acumen – for example, not being good with numbers.
- Adjust your expectations – don’t restrict yourself to PLCs
At the long-list stage you will be ranked against other business people so try to build evidence of your business acumen.
- Build experience through work in the charity sector
- Learn the language of business
- Look at your weaknesses in business and train up.
- Management training
- Advanced Management Programmes are run by most business schools
- Spencer Stuart also runs a 3-day (invitation only) board role-play course
It will show that you are serious; it will take you outside your sphere of experience, increase your network and make you a better interviewee.
Take a look at the full range of options. Don’t restrict yourself to PLCs.
Before you go to a meeting with anyone – research them for example in BoardEx. Check their connections.
How to promote yourself with the headhunters?
Headhunters are looking for people for their jobs – not looking to contact people for roles which may appear. Your CV should state plainly near the top what you are looking for, which makes it easier for the headhunter to make a match.
If you want a coffee/meeting with a headhunter give them a reason to talk to you.
- You may have your eye on a particular board.
- You may have an introduction from someone who the headhunter won’t want to offend.
- You may have an introduction from a client or senior adviser. Cold calling doesn’t really work. The headhunter will only think about you passively through a cold call approach. They are only proactive for their clients. They are reactive for potential candidates.
- Identify a particular sector you are interested in, so you reach the right person within the headhunting firm. The Board Practice should be your first point of call not the Legal Practice.
- Find a link within the firm through your contacts. The leading firms in the corporate sector are:
- Russell Reynolds
- Heidrick & Struggles
- Spencer Stuart
- Lygon Group
- Korn Ferry
- In the not-for-profit sector, it is easier to become aware of roles as they have to be publicly advertised. The main firm in this sector is Odgers and Berndtson (who deal with two thirds of the public-sector roles).
What will make you liked or not?
If you can evidence that you’ve thought carefully about what you want and who might be interested in you.
Government departments are a very different option from a PLC. There is less focus on strategy and more on operational efficiency and effective delivery. It can be very challenging. Their boards are typically made up of academics, business people, lawyers and accountants. They do have to advertise their roles and they have to demonstrate that all candidates are given exactly the same process. However, it can often be a two-pronged approach, with sought-after candidates being asked to apply.
If you don’t receive a call from the headhunter in advance of your interview it will be indicative of the interest in you.
You will be interviewed by a panel, where all candidates are asked exactly the same questions. However, it is an accessible world for a lawyer.
The downsides are that ministers have often chosen their preferred candidate and so, if possible, you should try and find out (discretely) whether there is a preferred candidate.
What kind of remuneration can be expected of these different roles?
- FTSE 100 companies pay approximately £70k for a NED role – unlimited personal liability.
- A public NED role will pay somewhere between £10-20k
- A charity role £0
Do concerns around liability affect people taking on these roles?
To a degree, especially in the financial services sector, companies and most (major) charities have D&O policies but you should recognise that reputational liability is a greater risk than legal and financial liability.