Tips from three leading headhunters
Directors must ask the right questions and support — and challenge — chief executives
MALTAWAY BOARD GOVERNANCE AND NON EXECUTIVE DIRECTOR (NED)
Even here in Malta this issue arises with relevant importance and validity , partly because the high number of foreign companies present in Malta, in order to be compliant with international standards for tax purposes (see the case of dummy company and tax inversion) , must have a board of directors with directors and NON EXECUTIVE DIRECTOR , residents in Malta, supporting and providing clear and convincing evidence that the foreign company is effectively managed from Malta.
Furthermore having a NED with international experience in the BOARD, reinforce widely the diversity, independence and compliance requirements for a better Corporate Governance, Leadership and Business results
30+ years Board, Governance, Investment’s experience and practice for YOUR BOARD needs and solutions
Virginia Bottomley
Chairman, Odgers Berndtson’s Board & Chief Executive Practice
The former Conservative cabinet minister turned City headhunter joined Odgers in 2000 and has battled to change attitudes towards women in senior roles. Key appointments by her team have included Carolyn Fairbairn as the first female director-general of business lobby group the CBI, Susan Kilsby as chair of pharmaceutical company Shire and Inga Beale as chief executive of Lloyd’s of London, the insurance market.
Ms Bottomley was born in Scotland and educated at the University of Essex and the London School of Economics.
What is your best advice for someone seeking a board position?
Excel in a particular area, whether that is leadership, finance, managing large profit and loss accounts or international exposure.
What makes a successful chief executive or board member?
Courage, tenacity and values. Listening is also an essential and underrated quality. Being in the right stage of one’s career in the right place and at the right time means that luck inevitably plays a role. But truly talented individuals with distinct experience and perspectives will always be singled out.
Excel in a particular area, whether leadership, finance, managing a large P&L or international exposure
Why has progress in increasing diversity on boards been so slow?
Only five years ago, barely 10 per cent of FTSE 100 board directors were female, so, while it may feel slow, there has been progress. But more work is needed. It is increasingly important to identify those less obvious aspects of diversity, such as diversity of thought, perspective and experience.
There is growing concern about executive pay. Are you concerned that chief executives are paid too much?
Some executives are paid too much relative to performance and the value they end up delivering. Equally, chief executives who create long-term, sustainable shareholder value are worth every penny. We are encouraged to see shareholder initiatives that keep the spotlight on this critical issue, such as the report by the Investment Association earlier this year, which noted growing investor and company concern about the level and complexity of executive pay.
To what extent are headhunters responsible for creating a market struggling to keep a lid on executive pay and to create more diversity?
We put forward the best possible candidates for each and every role based on a large number of considerations, of which remuneration should be only one.
Ultimately, pay is for boards to decide. We act as an independent third party, so play a part in encouraging boards to consider the widest pool of talent.
Raj Tulsiani
Chief Executive, Green Park Interim & Executive Search
Raj Tulsiani has pressed for greater ethnic diversity on City boards, most recently contributing to a review by Sir John Parker, chairman of mining company Anglo American, which recommends that boards appoint at least one non-white director to every FTSE 100 company by 2021.
An adviser to the Metropolitan Police and the Prime Minister’s Implementation Office on diversity, Mr Tulsiani also won the mandate to refresh the board at Transport for London. Before co-founding Green Park, Mr Tulsiani, who is of Indian and French descent, was a manager at Michael Page, the staffing agency.
What is your best advice for someone seeking a board position?
You have to have some of the skills and background, which you can often gain by joining voluntary or third-sector boards and learning the language. People can become pigeonholed as a good hospital non-executive director or school governor, but the difference with company boards is not as big as you think.
Also, understand the rationale behind each appointment. People might think the process of appointing non-executive directors is a meritocracy and that they can turn up and be the best candidate. But there are a lot of opaque and unwritten rules. Ask questions, test the waters and bring something authentic to the table.
What makes a successful chief executive or board member?
Realistic optimism, a strong way of communicating risk, being able to increase organisational trust and being able to see order in anarchy.
Understand the rationale behind each appointment. There are a lot of opaque and unwritten rules
Why has progress in increasing diversity on boards been slow?
People do not want greater diversity on boards. They quite often want people who are the same but “different” — they want skin-deep diversity. For example, you include women but they all come from upper middle-class backgrounds.
Also, progress has been slow because the headhunters who execute the majority of board appointments have very little credibility with diverse communities, partially because they have no experience of them and they do not understand the differences between mindsets and cultures.
Most search firms have been trying to boost their diversity credentials through marketing and so forth in the past few years. But you do not build insight, resonance and trust through expensive coffee mornings or posts on a website.
What role do headhunters play in increasing diversity and to what extent are they responsible for the lack of it?
Headhunters often decrease diversity, so they are as responsible as the clients. Executive search is also an institutionally prejudiced industry sector, which gives bad or “safe” advice based on “expert testimony” without data or real insight.
It is impossible to have more diverse boards without more diverse supply chains. Look at what percentage of ethnic minorities on the boards of the UK’s biggest listed companies are British passport holders or how many women on boards went to the same six elite universities.
Are chief executives and board members paid too much?
No, they deserve the money they earn and more — but only if they drive performance and inclusive cultures.
Jan Hall
Chairman and chief executive of Heidrick & Struggles/JCA’s UK Chief Executive & Board Practice
Jan Hall sold JCA, the headhunting business she co-founded in 2005, to Chicago-based Heidrick & Struggles in August. Heidrick promptly added JCA to its name, underscoring her power within the City.
Ms Hall’s placements include Marc Bolland, whose tumultuous time as chief executive of Marks and Spencer came to an end in April, and Carolyn McCall, chief executive at easyJet. Before founding JCA, she was a senior partner at Spencer Stuart, another executive search firm.
Try to understand the business in the round — the entire company. And make sure people know you are there
What is your key tip for securing a board-level appointment?
Understand the business in the round — get to grips with the entire company. Make sure people know you are there.
What makes a successful chief executive or board member?
The ability to ask really good questions in a constructive manner. To challenge executives in difficult times and to support them at others.
What role do headhunters play in increasing diversity and to what extent are they responsible for the lack of it?
The argument has been won that diversity is a good thing. The real issue is getting diversity coming up through businesses. We need the skill sets in the candidate pool to be there. But if boards are focused on looking for diversity, they are more likely to find it.
Are chief executives and board members paid too much?
In a global marketplace there is a real problem with levels of remuneration. In the US people are paid much better so we have to compete with them.
alberto balatti board member blog 