Simon Page: NEDs – Can you become a sparring partner, trusted advisor and a good listener?
After 10 years in the Foreign Office, Simon moved to Egon Zehnder to become one of the five lead consultants – private partnership, lockstep, to allow them to cover a very broad range of work at the firm, and in the board practice. Works across PLC type non-execs, government related roles and charities.
What types of roles are out there?
The broad landscape falls into 3 sectors:
- Private sector: FTSE, 250, 350, AIM etc, private companies and start-ups, and private equity boards (a consumer of decent talent in the private sector board space)
- Public sector:
- central government departments (not the same as plc boards, as for many years NEDs historically felt like spare parts – but were more recently revamped by Lord Brown of BP who was appointed to be head NED at the Cabinet Office to increase their profile. This has made a huge difference to the use and effectiveness of government NEDs and greatly increased interest in the roles.
- Non-departmental public bodies – there is a huge range. Managed in the same way as public appointments.
- NHS operates separately from central government, but on broadly similar rules to public sector
- Third sector: Charities, think tanks, academic works (schools to universities), housing associations
How appointments are made in practice
Private sector: FTSE 100 appointments used to be friends of the chair – but there has been a sea-change in last 15 years. Now, 80% of major appointments ‘go through’ the headhunter process, at least to some extent. Further down the FTSE it’s more likely to be through word of mouth and personal connection though Harvey Nash does an awful lot of smaller listed companies. They have in common that they are rarely advertised in the media.
Public sector: MUST be advertised to maintain the perception of fairness, and increasing diversity. That’s the official government line. The Public Appointments website is well run and lists all roles available at any one time.
Third sector: will often advertise via The Guardian online or on their own website. There is partial transparency in the process but these roles are rarely advertised in paper.
Process is then the same for all, with the nominations committee narrowing down to four or five candidates for interviews and then one or two, who will meet the chief executive.
The nature of the involvement of CEO is interesting. They should not have the final say as it is not meant to be their appointment, but as a chair has to work together with the CEO, when appointing a Chair, candidates will often meet the CEO and the CEO can be very influential. In charities it is even more important to be independent. The process often finishes with a confirmatory meeting with a larger group of executives and non-execs to allow candidates to meet broader base of the board.
There is an increasing tendency for appointments to be made by panel interview process, which Simon disagrees with. The behaviour of panel members becomes very formal, with lists of questions, each allocated to individual panel members, but presented to candidates as unconnected sets of questions asked by separate people. This favours a candidate who has fluent, shallows answers to a lot of questions rather than deep answers to a few.
The typical approach of a PLC is to meet candidates individually or two on one, which works out better with more interview time, different views, an ability to follow up and compare notes afterwards which Simon believes allows a fair comparison. But despite his urging, he doesn’t believe the government process will change.
What are they looking for?
Fundamentally NEDs are there to be a good sparring partner for the CEO and the executive team, so most of the interview should be about how the candidates will react with other board members and bring their knowledge and experience in a good way. They are looking for members who behave like a trusted adviser, not a content expert. More often qualitative than a skills based interview. Listening skills are strongly sought after.
Massively and rightly, boards in all these sectors are looking for diversity. Egon Zehnder clients and others are treating this as a fundamental aim. The UK has made a pretty good improvement in gender balance of some boards, by coercion and encouragement, without need for quotas, but is still very strongly looking to improve diversity which places white males at a disadvantage. In UK the focus is still mostly about gender, in the US ethnicity is now equally important but LGBT and other elements don’t get a look in.
Lawyers and board roles:
We don’t have the appointment of lawyers as the norm – unlike US and European companies. It’s not been the practice. Partly because of UK board’s unitary structure. The pattern for the executives is to match the career of the executives with the non-execs – man-marking. Some UK lawyers have moved onto UK boards very successfully. The skills that need to be deployed are; risk, which adds a lot of value; lawyers (and bankers) make a really strong contribution on strategy; the perception of what other stakeholders will think of decisions; and their network.
Base case reduces the number of lawyers – the existing board members can understand better the career of a finance director. Lawyers risk being seen as too narrow.
How to go about getting a role?
It is important to go through a process of self-reflection before embarking on the search for a portfolio career.
- What is your real level of interest? Lots of board roles are admin and not particularly interesting, ‘governancy’ heavy. Think about whether it’s really something you’d enjoy.
- What time commitment can you offer? 50 days pa for FTSE companies, more for the big banks, and generally 15 days a year for any small role and not all can be done in the evenings.
The Shrek group of headhunters (Spencer Stuart, Heidricks, Russell Reynolds, Egon Zehnder and Korn Ferry) consist of the main players in the board practice area.
For the FTSE 250 – Hanson Green and a few others
For charities – Saxton Bampfylde, Odgers and Perret Laver
Other ways to enhance you personal brand are through networking, thought pieces or speaking at conferences. All go to raising your profile. Getting a board mentor can be useful.
Developing a portfolio takes two or three years at least, as even the processes themselves can take a long time in the public sector. So be patient. And remember it is much easier to get on a board than to get off one.
How does one get on Egon Zehnder’s radar when looking for a role?
The London office has 50 consultants, 8 of whom form the board practice. They have a central group of researchers who assist. The practice meetings work as a clearinghouse for ideas but the rigour comes from the researchers.
As a minimum, upload your CV etc onto their portal. It is always useful to be able to meet one of the consultants directly and personal introductions work very well.
NuRole and WoB are effective in advancing the cause of diversity. However the big firms have had to develop lists of quality senior female candidates.
The PE recruitment process:
PE does like to run it their way, with their own views. Formal arrangements exist with people who can become their chairs of acquired companies. They are not unsophisticated in this, with a reasonably sized stable of candidates; but at the lower level they are using headhunters, as they don’t have enough candidates known to the PE houses. EBRD has its own network for potential NED candidates.
How to you prepare your CV?
Fine tuning of the wording of a CV probably won’t move the dial very much. Key facts speak for themselves in a digestible form. Don’t bother with the introductory paragraph. What headhunters need to see are the numbers of people you’ve managed, scale of budget, revenue etc. It is hard for lawyers but look for ways to make some statements that give an idea of scale, types of people you influence.
You have to overcome the prejudices and negative perceptions that lawyers are too technical, detailed or challenging. Early type board positions, which are not easy to do but fairly accessible to obtain, help humanise the candidate, such as chair of school governors, charity board experience etc.