One of the biggest barriers to hiring a Non-Executive Director (NED) is not knowing who the right person for your business will be. NEDs are an investment; they don’t come cheap - you need to think carefully about your choice. So, how do you find ‘the one’?
The answer is simple. Making the right choice starts with the Board taking a long hard look at themselves to honestly identify their skills gaps. The topic was covered at our conference on The Value of Non-Executive Directors on 19th September 2023.
Identify your skills gaps
CEO of Hilton Food Group, Steve Murrells, shared a great example of how this successfully played out for him while he was CEO of the Co-Op. “What’s most important when you’re thinking about creating a Board and getting the right skills and talent around the table is where are your strengths and where are the areas you want to bring new insight into the organization?
“There was a point within the Co-Op group where we knew that digital was the new paradigm and we were light in terms of technical skills on the Board. Most of the members on the Board were over fifty, including myself, so thinking about what digitally we required wasn’t going to come from our thinking.
As a result, the Co-op Board took a very enlightened and seemingly unconventional root to finding and choosing the right NED for them. They went out and identified 10 of the youngest entrepreneurs in the country who had all made considerable money through start-ups and picked a young guy who was under 30 years old to join the Board as their digital expert. This very much flies in the face of convention in terms of the kind of person you’d think would make for a valuable NED. But the focus was on filling the skills gap and as a result, it was a huge success.”
The power of diversity
The next step is to embrace diversity. The problem is that for many senior executives, it is often seen as easier to choose people cut from the same cloth and to stick to what you know. As Jacqui Green, a NED herself and consultant at Viridis Consulting pointed out: “The problem is that so many Boards hire a look-a-like of the last NED”, while Barry Gamble of the Non-Executive Directors’ Association, NEDA highlighted that: “Not many boards do a good job at embracing diversity and inclusion. They self-perpetuate themselves and design in the same way of the past.” By doing this, however, companies are simply throwing good money after bad.
Embracing diversity is not just a nice to have, it is absolutely essential for the success of the business. Something Steve Murrells passionately believes: “I have found NEDs to be a cross-section of gender and of colour and race. I think that’s critical, given what’s expected of businesses today and the responsibilities we have to create opportunities and products that are in tune with the society we live in.”
And finally…..know when it’s time for a new NED
The final thing to bear in mind is that every NED has a shelf life. While there are no set timeframes for how long a NED should be with you, you can definitely hold onto one for too long. As Jacqui Green explains: “It’s time to move on if you’re no longer adding value”, while William Burgess, Exec Chairman at his family-run farm points out that: “If you know what your NED is going to say, it’s time for a new one.”
