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John Dodd

John Dodd



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Diversity - Make it work for your Board

With uncertainty in the Eurozone, turbulence on the financial markets, high unemployment figures and minimal growth, the UK economy is once again facing a challenging time. Many companies have spent the past three years downsizing, driving efficiency plans, reducing their cost base and reining back on most forms of investment. In this turbulent economic environment, diversity can slip down the priority list. But could companies be missing a trick to accelerate their commercial performance? There is growing evidence that Boards with diverse talent outperform those with a more homogenous make up. Diverse, inclusive and representative Boards benefit from fresher perspectives, new ideas and broader experiences, and are more likely to be truly reflective of the people they serve, and therefore  better able to understand their needs.

How can companies ensure they get value for money when working with search consultants to achieve a greater level of diversity and inclusion on their Board?

Challenge your own principles – Board members of similar age, gender and ethnic background can bring homogeneity, shared values and an efficiency of operation. But on the downside such teams can be narrower in their thinking, with limited challenge and less creative dissatisfaction (and therefore innovative insight). The benefit of a broader range of experience is that it often leads to a more enriched discussion of ideas, thoughts, solutions and perceptions. This is especially the case when contributors are drawn from different professions with contrasting perspectives developed in different contexts and under different paradigms. We are starting to see the composition of the Non Executives change, with more first time Non Executives who also retain their executive role in another organisation. We are also seeing an increase in the number of women NEDs, although there is still much work to be done in this area.  Many Boards need to start thinking about their composition from a different perspective – they need to be complementary not similar - in order to provide a robust leadership and governance mechanism.

Work with your search consultant to plan the composition of your Board - This can be achieved with a root and branch review of the structure of your Board, addressing current skills, the strategic focus going forward and what knowledge, experience and personalities are needed to facilitate this. It is important at the outset that you build in the diverse competencies needed, rather than shoehorning in diversity which can ultimately be counterproductive.

Be flexible with the parameters of the brief to widen the candidate pool – Organisations need to seriously target non traditional backgrounds, be flexible in terms of time commitments, and use technologies that will attract a more diverse candidate base. They also need to network more effectively in different sectors. Head-hunters have their part to play by pushing back against conventional thinking, ensuring Boards are more flexible when scoping a role and by looking outside traditional boundaries. This is about risk and reward; often the non conforming candidates add the greatest value or have the biggest positive impact.

Ensure a transparent process – The private sector can learn from the public sector in terms of the transparency of Board appointments. Public sector Chief Executive and Non Executive appointments are regulated by OCPA (Office of the Commission for Public Appointments) to ensure the probity and transparency of the recruitment process. Such auditable processes including documented sifting, competence based interviews, formal shortlisting as well as psychometric testing, to ensure that the Chair or selection board make a more informed decision against tangible criteria, not simply relying on an informal chat over dinner  or a friendly recommendation, no matter how well intentioned.  Such rigorous processes also enable organisations to pinpoint core attributes and behavioural traits that will be essential to the composition of any new or changing Board. This transparency is good practice, and aids better governance, especially where shareholder value is concerned.

Onboarding to assist transition of Non Executive Directors – This starts during the recruitment process, ensuring candidates have full access to the information needed to make an informed decision – the challenges faced by the organisation, the financial structure of the business  as well as access to other Non Executives. It is essential to ensure there is a good cultural fit and that all parties can work together for the benefit of the business, whilst challenging and holding each other to account. It is also important to afford new Non Executives time in the business, getting to know the operational environment with the opportunity to engage with relevant members of the executive team.

Choose a search partner with the right connections – Seek to build relationships with search partners that can access a diverse range of networks to ensure you get the very best talent across a number of sectors. Today’s market is all about value for money and ensuring you get an appropriate return on investment from your search partner. By putting in place clearer expectations as to the diversity of your shortlist, you will have a better chance of achieving this.
If you would like to discuss the above content in more detail, please feel free to call John Dodd on 01625 508100

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