Why Would Boards Appoint Lawyers? Advice From Leading Headhunters at Norman Broadbent
Last week we were pleased to introduce you to Neil Holmes and Julian Ortner from search firm Norman Broadbent.
Neil, who joined Norman Broadbent in 2011, focuses on Board appointments across all sectors. He covers listed and private companies ranging from small and medium sized to FTSE 250 and FTSE 100 companies.
His colleague Julian Ortner, who leads Norman Broadbent’s Legal Practice also has a keen interest in developing lawyers’ talents for the boardroom.
Together they talked about Norman Broadbent’s constructive approach to building a non-executive career in the private and listed sectors.
Here is a summary of what they had to say;
Norman Broadbent is one of the largest UK-headquartered firms, founded 30 years ago. The firm appoints anywhere between 35-50 FTSE NEDs each year (mainly for FTSE 250 and FTSE Small Cap boards) which represents c.5-7% of the appointments. The firm has been tracking a number of changes in board composition in the last few years.
About 160 NEDS are appointed a year, with around 22% of those appointed taking up their first NED role. Over the past two years, 32% of all NEDs appointed to FTSE 100 boards have been women.
Around 255 NEDs are appointed each year, with 21% taking up their first NED role and 31% of recent appointments have been women.
FTSE Small Cap
Circa 175 NEDs are appointed each year. 33% were taking up their first NED role and 22% were women.
In terms of FTSE NED opportunities, there are in total approximately 600 NEDs appointed each year, of which less than a third will be ‘first time NEDs’. So there are fewer than 200 opportunities each year for newcomers; of these up to a third will need accounting qualifications, in order to serve ‘with recent financial experience’ on Audit Committees (with ex CFOs being much more frequently appointed than Partners from Accountancy firms nowadays). Other experience currently sought includes Group HR Directors (for Remco appointments) and those with Digital or emerging markets experience.
The perception is that most NEDs have multiple appointments, and there are some NEDs who have several roles. However, across the whole of the FTSE (including AIM) the average is c.1.25 appointments per NED.
Why would boards appoint lawyers?
Norman Broadbent estimate that there are currently only about 30 NEDs on the boards of FTSE 100, 250 and Small Cap companies who were formerly Partners in a Law firm.
Lawyers are seen as having good problem solving skills, intellect, gravitas, presence, etc, though they are not unique in having this skill set. They are seen as good contributors to a discussion, though not always decisive. Increasingly, Risk is a critical Board issue and Lawyers are generally seen as having a contribution to make there.
How can Lawyers counteract stereotyping?
First, be realistic about what you are looking for and think carefully about why should boards appoint you? Give careful thought to your transferable experience, and how that can be applied in the boardroom. It’s your experience of business gained during your legal career, not your legal skills that are relevant.
Lawyers are generally perceived as lacking experience of running a business, so if you have run teams, departments etc, it is important to highlight that experience. Equally, it is important to be able to point to experience of developing and driving strategy during your career. Lawyers often have this experience but don’t always communicate it. Knowing a sector well is important.
Think hard about what boards do; talk to existing NEDs. Think about board dynamics and the roles of the Chairman and the CEO. Above all, think about the business and the board; will you enjoy it and be interested and engaged? Don’t neglect to look at AIM-listed NED roles – these roles tend not to be filled via headhunters – their NOMADs, accounting firms and law firms often make recommendations.
Be sure to network – lawyers seem to have small networks. Be prepared for rejection. Learn how to sell yourself in an interview, think what to say that demonstrates what you can bring. NED interviews are different, get some practice if possible.
Start thinking about NED roles mid career rather than waiting until you are close to retirement. Taking on a role before you step down helps to demonstrate that you can make that transition. Charities can be a good stepping stone.
With Public sector appointments it is very important to demonstrate why you fit. The public appointments recruitment process requires an ‘audit trail’ so there will be long applications forms to fill in. It will be a panel interview.
NHS boards are not a particularly useful springboard for other types of NED roles, and can be very time consuming. Some of charities and public sector appointments however can be really useful for your network as well as useful because you can evidence that you have made the change from exec to NED.
How do you get to the right NED headhunters to start this transition? An introduction or recommendation from someone well known to a headhunter (such as a NED) will get you noticed much more effectively. Research the headhunters and personalise your approach. Develop and use your network for this and be sure to give help to others, it will be reciprocated.