Guy Beringer’s Blog – How can lawyers contribute to better boards?
This is the first in a series of short blogs which consider the contribution which lawyers might make to the governance and boardroom world and the challenges which might arise in doing so.
A good starting point is the extent of that contribution as it currently stands. There is no wholly reliable source of information but Boardex shows that there are currently 1159 partners at the UK’s 150 top law firms. From this group, 104 partners from 42 law firms currently hold 173 non-executive roles in aggregate which are known to Boardex. It is certainly the case that many of those partners will hold additional unrecorded trustee and similar positions but the Boardex picture is a reasonably representative one. The majority of the 173 roles are with private companies and charities.
If one looks at the former partners of those firms, the picture is a little better. 175 former partners of those firms hold an aggregate of 388 non-executive posts. These roles are, however, also dominated by private companies and charities.
It is noticeable that there is a dearth of public listed companies in either list. This is understandable in the case of partners who are still in practice as there will be conflict sensitivities. These sensitivities do not, of course, apply to former partners but it will not come as a surprise to many former partners to see that the public company boardroom is a largely closed book so far as they are concerned.
Why should this be and does it matter?
Any aspiring entrant to the public company boardroom who identifies himself or herself as a lawyer will need to cope with a presumption that he or she might very likely be a nitpicking and indecisive naysayer. This news will be kindly broken to you by people who say that such thoughts are far from their own minds but others appear to hold them. You may search in vain for the culprit who actually thinks these things but the image will confront you almost everywhere.
Any protestation that the law is one of very few business sectors in the City which, in the years since Big Bang, has avoided major scandal, been sustainably profitable and has consistently been in the front rank globally will be met with blank incomprehension. Who would have thought nitpicking could be the coping stone of so many successful businesses?
But here is a paradox. The reason for this attitude on the part of the outside corporate world lies largely at the feet of the legal profession itself. It has concentrated on its own affairs for so long in the UK that is has become detached from the mainstream business world. It has taken client commitment to a level which precludes any human face or public intervention which might unsettle the clients who provide the rock on which global success has been built. the profession has pursued its own business so single mindedly that it has ceased to participate in public debate and has not developed a profile which qualifies it to participate in the business world around it in any guise other than adviser.
Does this matter?
These blogs will argue that the governance world of the public company is now dangerously lacking in diversity of thought. It is dominated by able people from a largely financial background whose horizons are curtailed by a marketplace which is itself stunted by an inability to understand the social settings in which it must operate.
These blogs will also argue that the governance world of the third sector is challenged in similarly challenged but for very different reasons. No-one would say that a horde of lawyers would cure all these ills but it is time for a changed approach.