Jan 122021
 
Diversity and Inclusion in the Boardroom – What is at Stake if we Don’t Get It Right?

Owning up to our Negative Automatic Thoughts: Are we becoming tired and numb to the messages around diversity equity and inclusion?

Sometimes it seems like some individuals and organisations have switched off from messages on racial justice and racial equity. However, the challenges facing us are no longer just about diversity, equality and inclusion, they are much greater than this. Psychologists recognise that if you experience something enough times you can become numb and supress your feelings and responses.

I believe this also applies to work in the area of diversity equity and inclusion. When we feel like we are being bombarded with information on the lack of racial tolerance and differences and being told that we have to change both at an individual and organisational level, there is a danger we can stop responding to these messages. Indeed we can become numb to the suffering of those who are different and to the efforts being made to promote change in this area. Our brains can filter out the information and we can switch off from this. But at what costs? Events in the USA warn us of the dangers of racism and intolerance of differences and what happens when our sense of privilege and entitlement is left unchecked.

Empathy and compassion and fearing for the lives of others.

I woke yesterday morning to the news of the death of Police Officer Sicknick. I like many others had watched officers battling to maintain control of Capitol Hill against a mob who had invaded the building demanding that the USA election outcome be overturned. One particular video which caught my attention was of a black police officer trying to hold off the mob of protesters terrified for his life.

As I watched this black officer running away from the mob and then at times standing his ground and then having no option but to flee as he was outnumbered, my heart was in my mouth and I empathised for this black man and wondered why he was on his own. Where were his fellow officers? How must he be feeling in that moment?

As a black woman it was not difficult for me to empathise with him and to understand the fear and terror he must have been feeling as he was standing face-to-face with this mob who were most likely right wing extremists and intolerant of racial differences.

It reminded me of the film Roots which I had watched when I was very young which still gives me nightmares to this day when I remember scenes of black people being isolated, trapped and lynched. We talk about post-traumatic stress disorder and psychological trauma but no one can begin to understand the trauma that these two policemen would have suffered in those moments. Black or white they were Officers doing their job and being attacked in the process.

An attack on democratic values and way of life?

Watching CNN following the riots and attacks on Capitol Hill there was a discussion on how worried we should be and someone reflected that what’s at stake is our democratic way of life and our liberal values. They talked of the dangers posed by the right wing extremists who having defined the world in a certain way are outraged that people do not agree with their definitions.

“They want to deny everyone else their rights and those at the most risk are the marginalised groups or ethnic minorities.”

If we needed further proof, the work in the area of anti- racism has never been more urgent. Racism and intolerance impact on society; fear, anger and blame feed the monster. Diversity and Inclusion does not just relate to organisations and boards it affects us all and we need to realise what the risks are if we continue to dismiss the need for change in this area as not applying to us.

When we allow ourselves to be stuck in caves of privilege, safe from the injustice which affects marginalised groups we convince ourselves that Diversity and Inclusion is not our business. However if we do this long enough the damaging impacts are clear to see as we nurture and reinforce messages of superiority and entitlement. We nurture and reinforce messages of intolerance and believe the conspiracy theories we are told. The impact of these repeated messages affects us all (not just those who believe them) as we saw in the Capitol Hill riots.

Some will argue this was in America, it cannot happen here. However the truth is it can happen anywhere. Wherever senses of privilege and entitlement are left unchecked and where there is intolerance of difference and an eagerness to blame those who are different such as ethnic minorities.

Why our focus needs to be on more than just about diversity, equity and inclusion.

Yesterday I met with David Doughty and Shirley Wardell to plan the diversity and inclusion in the boardroom course which we are holding later this month. We had a long discussion around what makes an effective board. We explored the areas we hope to cover on the training programme including concepts such as creating a safe space, building bridges of empathy, coming out of caves of privilege and promoting diversity of thought.

Concerns have been raised around unconscious bias training and whether this really has an impact on changing beliefs and behaviours. Some MPs have argued against such training, protesting against being told what to think. I recognise that some people are numb to anti-racism training and that some consider training not to be the solution in promoting change in boardroom behaviours.

It became clear to me during our planning that after months of conversations around racial injustice there is a real danger the course can fail to catch people’s attention and its messages lost. It’s therefore important to really highlight why diversity, equality and inclusion is such a key focus which we all need to make our business and not turn away from.

Why should Board members make this course their business?

So let me take time to explain why this course is critical to the work that Boards need to start doing in promoting greater inclusivity. Whilst the focus of the training program is on diversity and inclusion in the boardroom what we are going to be covering is much more than this.

It offers board members the first steps in exploring the function of their board and in evaluating where they are in their efforts to foster change and promote greater inclusivity. However more than this, it provides support and challenge in exploring Board values, beliefs and behaviours in relation to racial differences.

We all know that racism is really about power and that if true change is to occur it needs to be at the structural and institutional levels. This is why working with Board members is critical to this work.

In the UK, the Charity commission has recently published the updated Charity Governance Code which includes revised recommendations on Equality Diversity & Inclusion (EDI) and Ethics –essential reading for all charity Chairs and Trustees. This further highlights the importance of work in this area.

So what does it take and what are the costs if we fail to do this work and achieve change?

With all the conversations and protests following the murder of George Floyd and now the attacks on Capitol Hill, some say this is a time for healing, however before the healing can begin, we have to do the work and this includes building bridges of empathy. We need to be able to put ourselves in someone else’s shoes like officer Sicknick’s shoes or the black police officer and imagine how they must have been feeling in those desperate moments as they tried to hold off the rioters.

We need to be able to talk honestly about trust and how we build trust in each other and across different racial groups. How can I be sure that my colleagues will support me and that they will have my back? Those are questions many who have experienced racism in the workplace have asked themselves.

It is only when we practise building bridges of empathy and promote an understanding of what it’s like for someone who is different that the healing can begin. We also need to be able to reflect on our negative automatic thoughts. We all have them and it is important to recognise these and consider their impact.

Posturing and position statements will not achieve the change required.

Currently, in some organisations there is a lot of posturing and pretending when actually the empathy and trust is not there. People and organisations put out position statements saying “racism has no place in our society” when their very practice is one of racism and intolerance of differences.

We need to be open and transparent and start talking about the failure of some organisations. We need to start naming and shaming organisations and celebrating those organisations and individuals who are doing the right things.

We need to stop posturing and pretending and playing at saying the right things. We actually need to start taking action and thinking about what we are doing.

Organisations need to recognise and accept that the work in the area of Equity, Diversity and Inclusion begins with honesty first and foremost and an acknowledgement of the complexities of racism. We need to put our hands up and admit when we've got it wrong. We need to admit our negative automatic thoughts and challenge ourselves and others to control these.

Commitment to change starts in the Boardroom with senior leaders having conversations.

There has to be a real commitment at the individual and organisational level if things are going to change and if we are to achieve true racial equity and racial justice.

This commitment has to start with conversations on race and speaking up and talking honestly about our experiences of differences whether we are black or white. This involves an understanding of emotional intelligence and an ability to explore the principles of empathy, compassion and belonging. Senior leaders need to find ways of building bridges of empathy, bringing different communities together, fostering belonging and shifting away from narratives of blame and racial intolerance.

However that is only the first step. The real work in achieving change starts after that!

The Diversity and Inclusion in the Boardroom course offers that first step in raising awareness and beginning the first step of the journey to admitting to ourselves that we haven’t always got it right and we need to do things differently. We need to challenge racial intolerance and prejudices. If we fail to act now scenes like the storming of Capitol Hill will become common place as we continue to create a society which is intolerant of difference, a society where ordinary families are radicalised and join with extremist groups who feel entitled by the colour of their skin and will stop at nothing to snatch power away from others.

As part of this training you will have the opportunity to complete the Six Stages Questionnaire which is a support and challenge developmental tool designed to promote an understanding and ability to deal with racism.

By Dr Shungu Hilda M’gadzah

Psychologist, Diversity, Equity and Inclusion Consultant.

Inclusion Psychologists Limited

Six Stages Framework.

contact@sixstagesframework.com

Jan 112021
 
Nasdaq emphasise importance of board diversity for 2021

At the end of last year, Nasdaq filed a proposal with the U.S. Securities and Exchange Commission (SEC) to adopt new listing rules related to board diversity and disclosure.

If approved by the SEC, the new listing rules would require all companies listed on Nasdaq’s U.S. exchange to publicly disclose consistent, transparent diversity statistics regarding their board of directors. Additionally, the rules would require most Nasdaq-listed companies to have, or explain why they do not have, at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority1 or LGBTQ+. Foreign companies and smaller reporting companies would have additional flexibility in satisfying this requirement with two female directors.

The goal of the proposal is to provide stakeholders with a better understanding of the company’s current board composition and enhance investor confidence that all listed companies are considering diversity in the context of selecting directors, either by including at least two diverse directors on their boards or by explaining their rationale for not meeting that objective.

It's not just box-ticking, research shows that diverse boards are better boards

As part of rationale for the new requirements, Nasdaq’s proposal presents an analysis of over two dozen studies that found an association between diverse boards and better financial performance and corporate governance.

Under the proposal, all Nasdaq-listed companies will be required to publicly disclose board-level diversity statistics through Nasdaq’s proposed disclosure framework within one year of the SEC’s approval of the listing rule. The timeframe to meet the minimum board composition expectations set forth in the proposal will be based on a company’s listing tier. Specifically, all companies will be expected to have one diverse director within two years of the SEC’s approval of the listing rule. Companies listed on the Nasdaq Global Select Market and Nasdaq Global Market will be expected to have two diverse directors within four years of the SEC’s approval of the listing rule. Companies listed on the Nasdaq Capital Market will be expected to have two diverse directors within five years of the SEC’s approval. For companies that are not in a position to meet the board composition objectives within the required timeframes, they will not be subject to delisting if they provide a public explanation of their reasons for not meeting the objectives.

“Nasdaq’s purpose is to champion inclusive growth and prosperity to power stronger economies,”

said Adena Friedman, President and CEO, Nasdaq.

“Our goal with this proposal is to provide a transparent framework for Nasdaq-listed companies to present their board composition and diversity philosophy effectively to all stakeholders; we believe this listing rule is one step in a broader journey to achieve inclusive representation across corporate America.”

Nasdaq will also introduce a partnership with Equilar, the leading provider of corporate leadership data solutions, to aid Nasdaq-listed companies with board composition planning challenges. Through the Equilar BoardEdge platform, hosting nearly one million profiles and the Equilar Diversity Network, and by leveraging existing services through the Nasdaq Center for Board Excellence, the partnership will enable Nasdaq-listed companies that have not yet met the proposed diversity objectives to access a larger community of highly-qualified, diverse, board-ready candidates to amplify director search efforts.

“This proposal and partnership gives companies an opportunity to make progress toward increasing representation of women, underrepresented minorities and the LGBTQ+ community on their boards,”

said Nelson Griggs, President of Nasdaq Stock Exchange.

“Corporate diversity, at all levels, opens up a clear path to innovation and growth. We are inspired by the support from our issuers and the financial community with this effort and look forward to working together with companies of all sizes to create stronger and more inclusive boards.”

Through this proposal and other corporate initiatives, Nasdaq seeks to make a positive impact in the global community by leveraging the scale of its operations and client network. In September, Nasdaq announced the launch of its Purpose Initiative, designed to champion inclusive growth and prosperity for all stakeholders. This effort will include the relaunched Nasdaq Foundation and initiatives through the company’s employee volunteerism and philanthropic programs and the Nasdaq Entrepreneurial Center.

Stakeholder Endorsements:

“Successful companies must cultivate diversity to fuel innovation and to thrive in today’s era of ongoing environmental, social and economic change. The technology industry is committed to promoting inclusivity at all levels to ensure that our economy remains robust and innovative. We support Nasdaq’s proposal to advance diversity throughout corporate America.”

– Linda Moore, President & CEO, TechNet

“By pushing its listed companies to address racial and gender equity in corporate boards, Nasdaq is heeding the call of the moment. Incremental change and window-dressing isn’t going to cut it anymore as consumers, stakeholders and the government increasingly hold corporate America’s feet to the fire. Nasdaq’s efforts to prod and push its listed companies is a welcomed and necessary first step. With increased representation of people of color, women and LGBTQ people on corporate boards, corporations will have to take actionable steps to ensure underrepresented communities have a seat at the table."

– Anthony Romero, executive director, American Civil Liberties Union

“Diversity of experience, gender, race, knowledge, and perspective means that a company is more capable of seeing the full picture, assessing risk and overcoming challenges with forward-looking, innovative solutions.”

– Michael Splinter, Chairman, Nasdaq

“When we embrace diversity, we are better equipped to serve our clients, employees, partners, communities and shareholders.”

– Charlene Begley, Director, Nasdaq

“Nasdaq’s diversity proposal marks a transformative moment in a larger movement toward greater representation of women and people of color in the boardroom and beyond.”

– Alfred Zollar, Director, Nasdaq

1 - An “underrepresented minority” is an individual who self-identifies in one or more of the following groups: Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander or Two or More Races or Ethnicities.

Join us on Friday 22 January 2021 to discover the practical steps you can take towards increased diversity and inclusion in your boardroom

Dec 302020
 
Equality, Diversity & Inclusion in the Charity Boardroom

The recently updated Charity Governance Code includes clearer recommended practice in the renamed Equality, Diversity and Inclusion (EDI) Principle and sets out four stages of practice for charities in their EDI journey.

Boards should:

  1. Think about why equality, diversity and inclusion are important for the charity and assess the current level of understanding.
  2. Set out plans and targets tailored to the charity and its starting point.
  3. Monitor and measure how well the charity is doing.
  4. Be transparent and publish the charity’s progress.

So, how can charity trustees and in particular their Chairs tackle the four stages as a priority for 2021?

As a Chair of a registered charity and having worked with the boards of many charities on matters of Corporate Governance, I would like to suggest the following practical approaches that can be taken to help trustees on their journey to satisfy the four stages towards EDI compliance:

1.   Think about why equality, diversity & inclusion are important for the charity and assess the current level of understanding.

EDI should not be seen as a box-ticking exercise or an attempt to address historical racial injustices – from the point of view of a charity trustee, it should be focused on asking the questions:

  • how can we ensure that we are recruiting the best trustees, staff and volunteers?
  • how can we best understand and meet the needs of the communities our trustee has been set up to serve?
  • how can the board ‘set the tone from the top’ to ensure that the charity treats all its stakeholders with respect, equally and fairly in order that it can do the greatest amount of good in achieving its charitable objects?

In order to measure progress along the EDI journey, it is important to understand where the charity is now in terms of its current level of understanding of the issues involved and the barriers that may prevent equality, diversity and inclusion in the organisation.

This will involve discussion amongst the trustees and between the board and senior management and with staff and volunteers and may require training and facilitation, either internal or external, in order to produce a clear picture of where the charity is now in terms of EDI.

It is important at this stage to formulate a collective idea of ‘what good looks like’ and to manage the expectations of your key stakeholders.

Wherever you are starting your EDI journey it will involve change – increasing diversity means increasing difference and the board must recognise that if it is bringing potentially different people onto the board then it may well need to behave differently itself.

This requires a degree of self-awareness and possibly changes in terms of style and presentation to ensure that the board is truly inclusive. The whole point is to recruit trustees who will bring new ways of supporting and challenging the executives and fellow board members – this should be anticipated and welcomed by all the current trustees.

2.   Set out plans and targets tailored to the charity and its starting point.

A good place to start is the charity’s Articles of Association, or other constitutional document. It is good practice to review them regularly, say every 5 years, anyway but particularly when there is a change in the law or Corporate Governance Code.

By law, trustees must be appointed for a fixed period of time and your Articles will say how often trustees should be presented for re-election at the annual general meeting – typically one third of the board will resign each year and trustees will either seek re-election or new trustees will need to be recruited.

It is good practice to appoint trustees for an initial term of 3 years and they may then serve a total of 6 or 9 years on the board.

If you are thinking of refreshing the board to make the membership more diverse, then it is a useful starting point to know when your current trustees are due to retire – though stepping down from the board is not necessarily the end of a trustees’ involvement with the charity, there is still an opportunity to play an important role as an Advisory Board member, or, with particular importance to EDI, as a mentor to new trustees.

The next thing to look at is the skills of the current trustees to see if there are any gaps. Typically, charity trustees were recruited with a legal or accountancy background but these days, charities also need digital marketing, information governance and cyber-security expertise in order to be able to effectively challenge the executives.

Finally, it is a good idea to examine your recruitment adverts, your website content, particularly on the charity’s governance and where you are advertising for new trustees.

Often the language used in trustee vacancy adverts tends to be off-putting for various sectors of the community from which you are looking to recruit – think about any unconscious bias which may be present which may deter applications from anyone who is not comfortable with the language you are using in the text.

It is a good idea to try out the content with members of the communities that you are targeting and seek their opinion on the best ways to reach the intended audience.

One of the most common hurdles which must be overcome is the apparent lack of suitable candidates for new trustee appointments.

The 2017 research report, Taken on Trust, published by the Charity Commission found that

92% of trustees were white, 51% were retired, 75% were richer than average, and 60% had a professional qualification

– so adverts asking for previous trustee experience are unlikely to receive applications other than from the demographic highlighted in the report.

In order to search a wider pool of potential trustee talent, boards need to consider appointing associate trustees who can then ‘learn on the job’ – with the help and support of mentors who may will be the trustees that the new recruits are replacing.

Programs such as those run by Board Apprentice and the NHS NExT director scheme are a great way to expand the talent pool of diverse candidates for board positions.

By the end of this stage you should have a timeline and a clear set of actions. When it comes to setting targets, these should be set with regard to improvements in the board’s effectiveness and the charity’s performance and not numeric or percentage targets based on protected characteristics.

3.   Monitor and measure how well the charity is doing.

Organisational change is always difficult, particularly for a charity board of volunteer trustees – there will be some trustees who wholeheartedly embrace change, some who are indifferent and some who actively oppose change.

Difficult conversations will have to be had, especially when it comes to boardroom behaviours and there may have to be an early parting of the ways for trustees who are unwilling or unable to come to terms with the challenge.

Having engaged and involved stakeholders at the start of the journey it is important to keep them informed of progress at regular intervals. A board EDI program may also be run in parallel with one for the rest of the organisation and learning opportunities should be encouraged between the two.

Key to the success of an EDI program is building and maintain relationships with the communities from which you are looking to attract new trustees. There are a great many organisations, often charities themselves, who will welcome the opportunity to help you to make your board and charity more inclusive – they may also have a lack of diversity on their own boards so their may be an opportunity for reciprocal support.

The main message is: ‘don’t be afraid to ask’.

4.   Be transparent and publish the charity’s progress.

The opposite of a diverse and inclusive board is a secretive, exclusive mono-culture, of which, unfortunately, many examples can still be found. Transparency is key to ensuring that the EDI journey is seen as a genuine desire to improve the effectiveness of the board and the performance of the charity by engaging with and recruiting trustees from as wide a talent pool as possible.

Making good progress and being able to talk about the journey openly can be a source of competitive difference when it comes to winning scarce grant funding.

It is a virtuous cycle – getting the best people on board and as staff and volunteers, regardless of gender, ethnicity, disability or sexual orientation makes for a better charity which then enables it to meet the needs of the community it serves more effectively, which leads to enhanced reputation and funding.

Dec 242020
 
2020 Charity Governance Code recommendations on Equality, Diversity & Inclusion, and Integrity

non-executive director

The recently updated Charity Governance Code, which sets out 7 principles of good governance practice for charities in England and Wales, includes clearer recommended practice in the renamed Equality, Diversity and Inclusion (EDI) Principle, and updates to the Integrity Principle to emphasise ethics and the right of everyone who has contact with the charity to be safe.

The 2020 update to the Code follows a rigorous consultation with the charity sector that involved user focus groups and received over 800 responses. With feedback particularly focused on the diversity and integrity principles, the Code’s Steering Group commissioned specialist EDI consultants to carry out further research and advice.

Rosie Chapman, Chair of the Charity Governance Code Steering Group said:

These improvements to the Charity Governance Code reflect changes in society and the broader context in which charities are working. The updated Code is designed to help charities adopt good practice and secure better outcomes for the communities they serve. We know that charities are at varying stages in their efforts to fully adopt the Code, including in achieving equality of opportunity, diversity and inclusion, and the updated Code is designed to help charities on this journey. We’ve also heard that charities and boards would like more guidance on how to improve their approach to EDI. In response, we are asking charity umbrella and infrastructure bodies to provide more guidance and support to charities, to help them meet the recommended practice in the Code.

The Code recommends four stages of practice for charities in their EDI journey. Boards should:

  1. Think about why equality, diversity and inclusion is important for the charity and assess the current level of understanding.
  2. Set out plans and targets tailored to the charity and its starting point.
  3. Monitor and measure how well the charity is doing.
  4. Be transparent and publish the charity’s progress.

Pari Dhillon, independent EDI consultant who advised the Steering Group on the changes, said:

As a governance and EDI fan, I’m very excited about the launch of the Equality, Diversity and Inclusion principle, for two reasons. Firstly, great EDI has the power to create social justice in our boardrooms, charities, sector and ultimately society. Secondly EDI practice sits at the heart of good governance, and I’d argue you can’t have one without the other. I say this because:

To maximise public benefit, boards must focus on achieving equality of outcomes through their charitable purpose.

To make better and more informed decisions, boards must be diverse, reflecting and centring the voices of the community and needs that the charity seeks to serve.

To make robust decisions, all board members must have the power to fully participate and societal power imbalances must be prevented from playing out in an inclusive board room.

Malcolm John, Action for Trustee Racial Diversity commented on the new EDI Principle:

I’m delighted that the updated EDI Principle picks up the mantra of Actions not Words by encouraging charities to focus firmly on agreeing plans, setting targets and monitoring their progress. I’m hopeful that this will help set charities on the path to achieving greater racial diversity at all levels by moving away from informal recruitment processes for trustees and committing time and resources to drawing from a wider and more diverse pool of people.

As part of the Code’s refresh, the Integrity Principle has also been strengthened to emphasise the importance of a charity’s values, ethical decision making and the culture this creates.

Rosie Chapman, Chair of the Steering Group explains:

We’ve also updated the integrity principle to reflect the importance of everyone who comes into contact with a charity being treated with dignity and respect and to feel that they are in a safe and supportive environment.

In particular, the Code includes new recommended practice on the right to be safe (safeguarding) that asks trustees to:

Understand their safeguarding responsibilities.

Establish appropriate procedures that are integrated with the charity’s risk management approach.

Ensure that everyone in contact with the charity knows how to speak up and raise concerns.

Charities are encouraged to visit the Code’s website to view and download the new edition of the Code. Explanatory videos and accompanying blogs can also be found on the website.

As any experienced business executive who joins a Charity Board as a Trustee knows, running a charity, especially in 2020, is a particularly challenging task. Charity Chief Executives should be able to draw on the widest range of skills, background and experience from their Trustees for support. EDI should not be seen as pandering to sentiment but as an essential requirement to ensure that Boards have the best people contributing to the governance of the Charity, regardless of gender, race, ethnicity or class.

Charity Trustees are, by and large, enthusiastic, unpaid, supporters of the cause that their charity serves but they should also ensure that they understand their role, duties and responsibilities - the updated Charity Governance Code is essential reading for all charity Trustees.

Jul 082020
 
Where are all the well-paid, private sector, NED jobs?

non-executive director

One of our NEDworks subscribers recently sent us an e-mail asking where all the well-paid, private sector NED roles are?

There were just three private sector vacancies last month .. Is that all the vacancies from across the whole country? Am I missing something here?

If it is, what are you doing to improve this position as it is hard to believe that this represents the market for NED roles for the UK?

The truth is that the vast majority of private sector businesses do not have any NEDs at all and those that do rarely advertise vacancies – preferring to select from known associates and trusted advisors.

That is why most of the vacancies which are advertised are from the public and voluntary sectors – and competition for those is very keen.

Most of our members who have secured private sector NED roles have done so through the tried and tested route of working with businesses as a consultant, coach or mentor in order to establish themselves as trusted advisors before then naturally progressing to the board.

Despite what some of the other NED networks will tell you there is no secret seam of lucrative private sector NED roles that only they can unlock

What we advise is to establish yourself as an experienced NED on a public or voluntary sector board (many of which these days are paid roles) whilst cultivating your network of private sector businesses.

So here are some Dos and Don'ts to help you get started in finding your ideal NED role:

Do

  • Find out exactly what is involved in being a Non-Executive Director, Trustee or Governor. Even if you have served as an executive board member it pays to brush up on your knowledge of Corporate Governance - the Excellencia How to become a Non-Executive Director course is an excellent place to start (you can compare NED courses on the NEDworks website)
  • Spend some time on your CV and letter of application - being a Non-Executive Director requires a different skill-set to your executive roles so a NED CV will be different - there is advice on writing a CV on the NEDworks web-site
  • Make sure your LinkedIn profile is up to date and features any current or previous NED, Trustee or Governor roles you have had.
  • Spend time on your LinkedIn profile statement and headline
  • Expand your LinkedIn network - abandon any idea of only connecting with people you know well or have met in person - upload your contacts to LinkedIn and connect with as many as you can. Accept invitations from recruiters - especially those that specialise in NED roles.
  • Search your LinkedIn network for contacts who already have NED roles and message them to ask how they got them - particularly private sector roles.
  • Take up the opportunity to speak with the Chair or recruiter if it is offered - it is an opportunity to find out more about the role and you will be remembered when it comes to shortlisting for interview

Don't

  • Restrict yourself to only considering private sector roles - public and voluntary sector roles are advertised much more often, public sector sector NED roles are often remunerated at similar levels to the majority of private sector roles and public and voluntary sector roles offer excellent Corporate Governance experience.
  • Assume that because you have had a successful executive career you will be a shoe-in for a NED role - there are many more applicants for NED roles than there are positions available even for pro-bono roles so it pays to take applications seriously with a well-written CV and letter of application.
  • Be put-off if you don't get an interview after your first few applications - persistence is required in order to secure the right role. Always ask for feedback after an unsuccessful interview to help you with the next application.
  • Underestimate the time commitments for a NED role - where an advert says 1 to 2 days a month you can double or treble that figure in order to do the job properly especially if it is your first NED appointment - being a Non-Executive Director involves much more than just turning up for the board meeting and trying to read the board-pack as you go - most of the work is done outside the board-room and you need to allow sufficient time.
  • Think that you can replace your executive salary with NED fees. Recruiters will tell you that you can typically earn £1,000 per day as a NED which sounds reasonable but you can only realistically take on between 3 and 5 NED appointments at any one time and the time commitment is likely to be much more than advertised (see above)

Being a Non-Executive Director can be extremely rewarding, emotionally engaging and intellectually stimulating, especially as part of a portfolio career but it does require a significant investment of time and effort to establish a NED career.

Well-paid, private sector, NED roles are out there but there is no magic short-cut or secret path to finding them.

Good luck with your search, let me know if I can help you along the way and here's to making 2020 the year you take the first steps in your NED career.

David Doughty david.doughty@nedworks.net

Jun 192020
 

When driving a car or riding a motorbike, what use is data on the performance of the engine for the last hour vs. the previous three months? Yet most reports for business are built on detailed analysis of historic or specific deals, while the sales teams are focused on closing future business. A commercial dashboard needs to support moving the business toward the desired goals whilst enabling the monitoring of key performance metrics: the analogy of a car dashboard, providing data on speed, engine temperature, and remaining fuel, for example, enables informed decision-making and more accurate predictions of future success, i.e. whether arrival at the destination will be timely; whether there is enough fuel for the journey.

As a director, is the board getting the right data to create the right conversations and learning?

Unlike a motorbike, which does not provide historical data, commercial teams and boards are likely to be working with a mix of sales reports and dashboards: what each person sees will depend on the type of business and their role in the organisation. Non-Executive Directors, who are not in the business on a daily basis, will be forced to rely on both forms of data, to enable a clearer understanding of how the commercial teams are operating, to learn what factors are driving their successes and failures, and to ensure the business is learning from its activities. In truth, most SME’s have grown by chasing the business directly in front of them, fixating on the next order and pushing the business harder, not always stopping to learn the lessons of both failure and success. This simple approach which delivers results in the short term, driving high earning sales teams to keep running and deliver without taking the time to reflect and improve, is not sustainable as a longer-term strategy.

Sustainable success requires a regular cadence of reflection and analysis: the business needs to look at what is working, as well as what could be improved, to develop insights that drive positive change. Most importantly, directors need to be sufficiently well-informed so they can ask the right questions at, or even before board meetings, so as to maintain the level of scrutiny of the commercial team their role requires.

Below is an example dashboard for a commercial team selling a generic product or service. Taking a little time to review the data presented here is a useful exercise in identifying potential problem areas of performance: the inquiring reader should come away with a minimum of four questions for the commercial team come the next board meeting.

There are a range of questions which could be asked, none particularly right nor wrong. Here are four example areas which certainly merit further discussion with the appropriate commercial function:

  1. Marketing: The highest average contract value is generated by ‘Paid Leads’ at £5.35K. These leads however only constituted 10% of the total lead activity - what might be the result of increased focus on paid leads?Why focus here? The average value of a converted lead is £3.86k; the value of the paid leads is higher at £5.35k . An increase in paid leads of 100 might reasonably be expected to return potential additional sales of £149K
  2. Sales: The average sale cycle length is 22.2 - 40% of this time is spent on the Opportunity and Proposal stages; the time spent in Negotiation is equally long. What are the reasons for the protracted period of negotiation? How might we change this to re-balance how the commercial team is spending its time? How might our customers react?Why focus here? Selling adds value in any negotiation; to reach an agreement, value is traded between the vendor and the customer. Spending more time selling should increase sales and profit equally.
  3. Sales: There has been an 11% increase in the length of the selling cycle in the last period but only a 2% increase in the average size of the deal. What is slowing the selling process? Why is the deal size is not increasing at the same rate?Why focus here? Is there an internal process that is stopping the company from closing opportunities and increasing sales? The current data suggests that some factor is causing the time and effort required to close a sale to increase significantly, but with little or no increase in reward (revenue). Understanding the cause of this phenomenon - which needs urgent attention - would be of paramount importance to the business’ future success.
  4. Sales: The Follow-up Contract Rate of Isabell and Kaleb drops off significantly after the 2nd follow up call when compared with Ryan or Steve. How is this affecting their sales performance?Why focus here? Most business is won through understanding the need, selling the value, and then the tenacity of the commercial team. Isabell and Kaleb appear to be very active for the first few contacts, but they then seem to stop connecting with the customer. What is the result? Are sales being unnecessarily lost? Might training and coaching be required to get could get them back on-track? The number of contacts required to successfully close a sale is often underestimated by sales and non-sales people alike: below is a useful statistic which clearly underlines the importance of commercial-team-tenacity:

If you have any questions or comments, please feel free to share them at www.Sales-Hacks.ltd - we can always learn from each other.

The key to a good dashboard or sales report is its alignment with the goals of the company and its utility in measuring the output of the activities that enable the goals to be achieved. The example dashboard has 6 data points enabling the sales teams and their leaders to quickly and easily understand how they are performing, and by interrogating the data most boards can promptly answer the key questions concerning company performance: whether the company is heading in the right direction, and how likely it is that the company will achieve its goals. If the answer to either of these questions is negative, or worse still, the commercial team cannot answer the questions, the subsequent discussions are likely to be trans-formative for both the company, its employees and its directors.

At Sales-Hacks we are supporting NED’s , boards and their sales leadership; to use their data to drive the business harder while allowing all levels to understand the language and key topics to support SME’s and large corporate organisations to understand each other and align. For more information visit www.Sales-Hacks.ltd

As part of our work we have partnered with Excellencia Limited delivering online and face to face training courses for Boards or NED’s on ‘Sales for Non-Sales Directors’ for more information please visit www.excellencia.co.uk

Jun 182020
 

Before we answer the first question, here’s another: what percentage of companies have marketing strategy as an item on the agenda of their regular board meeting? 75%? 50%? It’s tough to guess, but probably fewer than you might think. So here’s a simpler question: how frequently is marketing strategy discussed at a board meeting which you regularly attend? Every meeting? Every other meeting? Once per year? Once ever?

Based on personal experience and peer-to-peer discussions, it seems that marketing strategy is an infrequent topic on many boardroom agendas. But why is that the case? Perhaps because it sounds like something Jessica Hynes’ character, Brand Consultant Siobhan Sharp of 2012 and W1A fame, might come up with? Getting strategic about marketing? If that was the image boards had of marketing strategy, it would be unsurprising to learn that many directors probably don’t get as involved with it as they should, and instead happily abdicate that responsibility to another.

Or perhaps it is that many directors don’t really understand what marketing strategy/strategic marketing is, or how it is different to branding or advertising, and the concepts and jargon of strategic marketing are so scarily lacking in familiarity that they would rather sit still and say nothing, unable to make even the most minimal contribution to the discussion, than venture a potentially incorrect opinion, and appear foolish or ill-informed.

Either way, abdication as an approach has its dangers, as it potentially places those directors in too-remote a position to assert any influence or control over a critical element of the destiny of the organisation they are leading, blunting their effectiveness and diminishing their value. Indeed, what is required of directors is quite the reverse.

Strategic Marketing: Why NEDs and boards need to be in-the-know

Back to our first question, then: when is it okay to leave marketing to the Marketing Department? The answer is…never! Especially if you had happened to be talking with the late David Packard, co-founder of Hewlett-Packard (now more familiar as HP), as it was he who coined the following:

“Marketing is too important to be left to the Marketing Department”

This quote - from which the title of this piece was paraphrased - neatly illustrates Packard’s view of marketing, which he saw as the responsibility of everyone throughout the business, as it is the core around which the business is built. What Packard was really saying, of course, is that the business needs to place serving its customers at its core, because that is what marketing is really about. This view is echoed by another quote reproduced here, this time from Peter Drucker:

“Marketing is not only much broader than selling, it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view.”

Bringing these ideas together with the central role of the board of directors - to safeguard the future of the business for which they are responsible - leads to the inevitable conclusion that, as marketing is critical to the long-term sustainability of that business, the directors are therefore ultimately responsible for it, also. This means that the directors need to be familiar with the central concepts of strategic marketing, so that they can ensure the marketing strategy the business is pursuing aligns with its vision and overall strategy with respect to achieving its objectives, and so that they can satisfy themselves of its likelihood of success; and by implementing appropriate measures and controls, enable corrective action where necessary to be swiftly taken.

For existing executive directors, especially those with a commercial background, this is probably not-too-challenging a task, as they are likely to have come across elements of marketing strategy in previous roles. But what about non-commercial directors, such as finance or HR professionals? And possibly more challenging still, what about Non-Executive Directors, especially those joining a board as a lay member. For boards and new NEDs alike this presents an unwelcome challenge: boardrooms require increased diversity to remain relevant, and need to attract out-of-sector NEDs representing a broader range of stakeholders; New NEDs want to add value to their employers, and also perhaps to make themselves more attractive so as to secure additional appointments, as they seek to substitute a portfolio career for the daily grind of the nine-to-five.

Who needs to do what, and when?

There is an element of joint responsibility here, as well as one of urgency: Chairs of existing boards, for whom board effectiveness is a measure of performance, are perfectly positioned to identify knowledge gaps and observe low-levels of contribution during meetings from both executive and non-executive directors, and can therefore propose actions to address these issues, such as organising training for the board, to be delivered by a suitably-qualified provider or training company. NEDs, both new and existing, need to be prepared to invest in growing their portfolio career, and should seek out opportunities for personal development to make themselves more attractive to boards, actively addressing any areas of inexperience or knowledge-gaps, so that they can present more of a well-rounded business profile to recruiters and chairs alike.

In closing, we revisit an old adage often attributed to Abraham Lincoln:

“Better to remain silent and be thought a fool than to speak and to remove all doubt.” 

Whether or not it really was Lincoln who spoke the words, their meaning is clear: better not to contribute to a discussion when you don’t understand the topic. Unfortunately for directors, silence is not a viable option, as a meaningful contribution is expected, if not at least desired, as part of the director’s fiduciary duty to the business, and in the eyes of the law, ignorance is no defence. This being the case, and as understanding marketing strategy must be the minimum expectation, NEDs and boards need to move swiftly to address knowledge gaps in this area. Only when the entire board fully understands the marketing strategy will the outcome of any boardroom discussion accurately represent the opinions of all of the directors, and any action chosen have been properly debated prior to reaching an agreement. Then, and only then, can it be said of the board that it functioned effectively, and of the directors that they truly fulfilled their obligations.

Duncan Hall is the founder of Experigy Ltd., a business growth consultancy specialising in Marketing, Sales, Customer Experience and Continuous Improvement. More information is available on the company website

He is also the writer of the "Marketing for Non-Marketing Directors" training course, which he delivers in association with Excellencia https://excellencia.co.uk/courses/director-essentials/marketing-for-non-marketing-directors/

Jun 062017
 

Institute of Directors commissioned report highlighted value Non-Executive Directors bring to family businesses

In 2015, then Ulster University post-graduate Caoimhe McGuinness explored the role of Non-Executive Directors (NEDs) in SMEs in Northern Ireland in a report commissioned by the Institute of Directors.

Interviews were conducted with executives and non-executives on company Boards including family businesses, and every Director interviewed felt the NED contribution undoubtedly added value to the firm, with most believing the NED role helped improve profitability.

The key differentiator between a family business and other private sector companies tends to be the breadth of experience round the Boardroom table. A family firm often grows organically and family members who join may not have benefited from working in another company or from specific training in running a business. While this isn’t of itself a handicap to business success, it can result in a narrower view, which could limit growth potential.

And that’s exactly where an independent, NED can add value to a family business.

Strategy

Strategy formulation was considered one of the most important roles a NED plays. Directors often get caught up in the day to day management of the company so an independent outsider with time to devote to developing a strategic plan can be extremely valuable.

A NED can act as mentor providing ‘wise counsel’ to the executives, particularly the Managing Director, offering a ‘shoulder to cry on’ and providing advice from someone who understands the business but is not involved in day-to-day operations.

Challenge and credibility

When it comes to Boardroom decision making, sometimes it takes an outsider to challenge the decisions a Board is making, and to question the potential impact on the health of the company. This is why the NED needs to maintain their independence. It is worth noting that the majority of respondents in the IoD research stated that the NEDs had helped them greatly by forcing them to arrive at decisions faster, ‘pushing them over the final hurdle’.

The presence of a respected and competent NED on a Board helps enhance the company’s reputation and credibility; which is particularly beneficial when it comes to sourcing external financing. A competent NED will also keep the Board right on issues of good governance.

Finding your NED

I’ve referred several times to independence and competence. These qualities should be at the forefront of your mind when you are looking for a non-executive director for the family Board. You also need to think about the gaps in the current Board’s experience, knowledge and contacts.

It might be easy just to approach a family friend or your old bank manager, for example, but the choice of a NED should be considered with the company’s strategy in mind. If, say, you’ve never exported and want to grow the business in that way, you’ll want someone with experience of overseas markets. Or if the company has grown quickly but your structure and governance procedures haven’t changed, then a NED who has the IoD’s Chartered Director qualification will have the necessary experience and skills.

IoD Northern Ireland’s NED Register already contains the biographies of over 30 potential NEDs. Everyone included has undertaken training in good governance, many are Chartered Directors or hold the IoD Diploma in Company Direction, and all are committed to continuing professional development. Find out more about the Register at www.iodni.com/the-ned-register IoD can also identify potential NEDs not on the Register if you can’t see anyone with the experience you need.

Jan 262017
 

Yes, believe it or not, if you have a reasonably good appreciation of business, corporate governance and sustainability risk, you can offer valuable support to Boards of private companies, charities and others. How?

sunsetWell, you need to have a good appreciation of what Corporate Governance is! You may be familiar with GRI's Governance pages. Or you may be aware, and have used, the governance indicators from the SGI. Alternatively you may know about sustainability as a set of "ESG" issues - environmental, social and governance. This is the language of the financial and investment community and is commonly used on listing rules in stock exchanges.

But I found that the How to become a Non-Executive Director course run by David Doughty at Excellencia is a great way to improve your chances of tailoring your skill set to benefit Boards, and find organisations to approach.

"A six year old could be a good NED, it's about taking a fresh angle, thinking creatively"

The course took place in Bristol one wintry day. We learned about the NED role, Directors' duties and liabilities, NED skills and case studies, and how to secure a role. We also learned that most practicing NEDs don't fully understand the role of a NED (allegedly).

"A non executive director was a bit like a bidet - no one knows what it does, but it adds a bit of class" Michael Grade, former chair, BBC

But business sustainability professionals naturally have a strong moral compass (allegedly), and as long as they understand that they are there to support the success of the company and its Board then they can be of benefit.

NEDs and Directors have the same liabilities but different responsibilities. Independence of NEDs means they can be the fresh pair of eyes and ears to support (i) the way the company meets its commercial objectives and (ii) the effectiveness of the Board.

We learned that Boards often forget that one of the key motivations for Governance is ensuring the availability of human resources (not just financial resources). Sustainability practitioners understand business success from a wider perspective (sometimes called People Planet Profit), and HR quality, safety and metrics are core to their work.

Also, we learned that many Boards may see financial risk as their highest risk, but in fact it's not. Reputation is the biggest risk factor. Sustainability professionals understand how different functions, operations and performance can affect reputation (and market cap) as a result of impacts right across the 'value chain' of a company. You want examples? Give us a call!

Also, we learned that Board composition needs to be diverse. Not just ethnicity and gender. But backgrounds, levels of creativity, thinking out the box, risk perspectives from different quarters are all apparently of use to a Board (they just may not realise it though!).

And we'll not forget the statutory duties of a Board with respect to legislation relating to health & safety, environment, corporate manslaughter, anti-bribery, modern slavery... Sustainability people live and breathe this.

The Companies Act 2006 also is hot on ensuring the success of a company accounts for long-term decisions, supply chain responsibility, environmental impact, community impact and reputation (for example). And the duties it confers are owed to shareholders AND stakeholders. Stakeholder engagement is so core to sustainability approaches that it's good to see this in the Act.

So, there are plenty of good reasons why sustainability folk can help a Board. In Bristol, we all thought that if you don't have the qualifications that companies and recruiters list in NED vacancy notices then perhaps they haven't fully understood what's required of a successful Board themselves! Maybe they have, but it doesn't hurt to ring them up and probe...

And if you read the FT, you may have read that NED is role for which no one is qualified.

"The list of attributes required of a non-executive director is so long, precise and contradictory that there cannot be a single board member in the world who fully fits the bill" FT 2013

So, to recruiters and Boards out there, think you know what you need? We learned that it's worth double checking. We look forward to supporting your Board!

Alex Nichols

Oxford, 2017

About the Author

Alex Nichols

Alex Nichols provides Sustainability and Corporate Responsibility services for a positive business impact

  • 20 years of professional sustainability management consulting experience.
  • Solid international experience in sustainability strategy, reporting, materiality, stakeholder engagement, assurance, training delivery.
  • Clean technology marketing and promotion.
  • Deep working knowledge of the GRI framework and other reporting guidelines and standards.
  • Experienced trainer in certified sustainability management courses
  • Diverse sectors including automotive, construction, mining & metals, paper & pulp, waste, energy, food & beverage, rail, tobacco and manufacturing.
  • Successful industrial, NGO and government projects.
  • Global track record: Europe, Turkey, Brazil, Jordan, Malawi, UAE and Australia

Jan 152017
 

When I left the NHS five years ago, becoming a non-executive was just not on my bucket list.

Mandy Wearne Non-Executive DirectorAlthough I am an NHS lifer, when I left, it was to set up my own health business with a friend and frankly it has been a blast! We have had our ups and downs but on the whole a move from the trials of public sector life, was welcomed.  My own business has however given me a different perspective on public service and I think I will be a better NED for it.

My entry point into the world of non-executive recruitment has really come from other people. When I think back over my career that seems to have happened a lot! Someone has said – ‘you'd be good at that job’ and the next thing I would take a pause from what I was doing, check it out with people I rated and the next thing I would be applying for another challenge.  So my first tip would be, if you are not sure about applying or have not had any luck so far, listen to what your networks are telling you and test it out with people you trust to give you a straight answer. A NED post may or maybe be for you.

Mandy's tips for applying

  1. Brush up your CV
    You can get more information about writing a NED CV here
  2. Get to know NED recruiters
    It pays to build relationships with specialist recruiters - and don't forget to ask for feedback
  3. Make it personal
    Choose a NED role that you can be passionate about

So what are my tips about applying? First, brush-up your CV. Make sure your achievements are FAB. By that I mean, think about your career achievements in terms of ‘Features’, ‘Analysis’ and ‘Benefits’. Can you clearly describe what you did and what you achieved? Can you quantify it? Can you clearly attribute benefits and to who and what? This really helps when you are asked at interview ‘tell me about’ or ‘can you give me an example of when’…

My second tip, the NHS NED recruitment is normally through a recruitment company. Get to know them. If needed, invest in a meeting with a recruitment consultant. They will be able to help you present yourself in the most positive way. More importantly, if you get to a first level interview with them, no matter the outcome, get their feedback. It will really help your interview or to steer you towards future applications.

My final tip is ‘make it personal’. I know being a NED in the NHS is going to challenge me but the NHS is in my soul and has played an important part in who and what I am. It will require big dollops of energy and resilience and a new style of leadership from me. So whatever direction you go in, make sure you choose a NED role that you are passionate about. For me, I am returning to where my NHS career started. The timing is right; it feels a bit like coming home.

Mandy Wearne

January 2017

About the Author

Mandy Wearne MPH, RHV, RM, RN, Dip Nursing (dist)

Non-Executive Director at Aintree University Hospital NHS Foundation Trust

Company Director at Inspiration NW

 

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