Why Welsh businesses are increasingly recruiting non-executive directors
Wednesday, January 17th, 2018

Why Welsh businesses are increasingly recruiting non-executive directors

The global financial crisis of 2008 and subsequent period of recession had a variety of effects on Welsh businesses and organisations.

Many were pushed to the brink and a number went under, but it’s fair to say none emerged unscathed.

With recent political events causing more economic instability and uncertainty, many businesses and organisations are actively taking steps to mitigate against future risk.

At board level, more are starting to realise that they need to shake things up and bring in more diverse, creative and skilled individuals.

In the hunt for fresh faces and new ideas, many businesses and organisations are turning to non-executive directors (NEDs).

At Goodson Thomas, we have been encouraged at the growth in the number of businesses and organisations in Wales actively looking for NEDs and the number of candidates seeking out these roles as part of a portfolio career.

This has become a significant part of our business in the last couple of years. We are currently leading searches for 9 NED roles across 5 organisations – FTSE 100 business Severn Trent Plc, Milford Haven Port Authority, Cardiff International Airport Ltd and Transport for Wales.

What are non-executive directors?

There is no legal difference between executive and non-executive directors (NEDs); they have the same legal duties and responsibilities.

The difference is NEDs are not part of the company; rather they are independent advisers, providing ideas and guidance on matters of strategy, performance and resources.

Most of these roles are unremunerated, reflecting the organisational make-up of Wales. That said, this position is slowly changing.

Perhaps as a consequence of the financial crisis, the role of the NED has changed dramatically in recent years, and businesses and organisations no longer see it as just a case of having a name on their board. 

Thanks to the power and reach of social media, businesses and organisations are now increasingly operating within a ‘goldfish bowl’.

This has also empowered customers and stakeholders, making their voice that much more powerful, and as such the level of accountability felt by businesses now is unprecedented.

Consequently it means that NEDs can no longer turn up for the occasional board meeting; now they are expected to be a lot more committed and proactive, giving more of their time and expertise to help the business.

NEDs are now seen as people who can add significant value to a business or organisation, and as a result they are being recruited more than ever before.

Some are so valued they are essentially acting as partners of the business, consistently advising on top-level strategic, political and and operational matters.

They bring nuanced counsel to the business, as they will have themselves acquired significant experiences of running enterprises, or working as part of an executive management team. This makes them ideally positioned to credibly and effectively scrutinise the performance of the executive

 

What are businesses and organisations looking for in a NED?

What is increasingly evident is that businesses and organisations are now looking for people who have substantial high quality and diverse networks, people who can open doors for them, help them better understand certain segments of the market and enable them to engage with certain cross section of stakeholders.

People’s skills and expertise are particularly important, especially in areas like legal, HR, digital, communications and finance. People with these specialisms are incredibly attractive to businesses looking to expand into new markets or ventures.

They are also looking for diversity, not just in terms of gender, ethnicity or age but also in terms of viewpoints, backgrounds and mindsets.

It’s healthy to attract people who have different viewpoints because they can offer challenge and ensure the work of the business or organisation remains in touch with customer expectation and need.

 

Who wants to be a NED?

 Traditionally, NEDs would typically be semi-retired and retired professionals seeking portfolio non-executive careers.

Increasingly, and refreshingly, we are seeing the market becoming far more diverse, with younger candidates considering the merits of building a portfolio career sooner than later.

The lack of pay isn’t even off-putting in many cases, as candidates are keen to gain experience and credibility before entering into the remunerated territory.

For some, securing a NED role is their route to being exposed to different industries or sectors, whilst for others it is the ability to align themselves with the values or purpose of certain organisations.

Siân Goodson is the founder and managing director of Goodson Thomas

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