Saturday, 24 November 2012

A New Generation of NEDs

Critical Eye is an excellent member organisation that publishes regular articles on topics of interest to Board Directors.  This recent article by Matthew Blagg makes for interesting reading.

A New Generation of NEDs

If the requirements to be an effective NED have changed, it’s because the role demands the ability to add genuine value to a business, and that the expectations around performance have increased markedly. The net outcome of this means enhanced levels of commitment in order to do the job well, along with greater risks, not least in terms of reputation.

Contrary to what many may think, there is much to be welcomed here. Lynn Drummond, Non-executive Director of technology business Consort Medical, says: “There is almost a generational shift happening, and with that a more positive reaction to the greater responsibility. There is lots of expectation around NEDs now and of course that means preparation, networking and solving business issues, rather than just accepting things that come in the board pack.”

Ian Durant, Criticaleye Advisory Board Member and Chairman of property developers Capital & Counties, says: “[There is] more public and political scrutiny of public company governance, more active shareholder attention, a harsher regulatory environment and a greater understanding of the risks involved [since] the financial services collapse... Time commitments for Remuneration and Audit Committees have increased substantially, and for a NED to contribute successfully overall, more time is required to be spent with the business.”

It’s a popular sentiment among Plc NEDs. David Shearer, Senior Independent Director of media concern STV Group, says: “A consequence of the economic, regulatory and business environment is that the amount of time and work outside the boardroom has increased substantially across all sectors, though particularly in financial services regulated entities. The degree of scrutiny to which board members are being subjected both by regulators and the City at large has increased as has the need for directors to keep themselves up-to-date.”

Choose wisely

The level of media, political and shareholder scrutiny means that prospective roles, especially in higher profile sectors, need to be judged more carefully. If something is perceived to go wrong, the dangers and liabilities may not be commensurate with the rewards.

Aleen Gulvanessian, Partner at law firm Eversheds, comments: “The risks, particularly reputational, have increased greatly. You are not going to get the most experienced and best qualified people to take on the most challenging NED and chairmanship roles in the financial services sector. For a number of them, especially if they have had 30 years of brilliant executive service, why would they put that reputation on the line for not a lot of money?”

While a chairman may receive what’s deemed to be a reasonable remuneration package, a growing chorus of voices are suggesting that the time and commitment needed to perform the role is not reflected in the amount earned. Robert Drummond, Chairman of clean energy business Acta, is passionate on this subject: “It’s about the overall skill and experience of the individual and with that the ability to stand up and be counted during testing times.

“Given what’s required to make a good quality NED, I do believe they have to be paid more. There must be a situation… where they are capable of earning the sort of salaries that attract the best people.”

The current mood and antipathy towards executive pay suggests that NEDs are going to remain on the same pay grade for a while yet. Besides, as David says, “full financial independence” is important as ultimately a NED has to be prepared “to resign as the final way of making a point”.

What is absolutely certain is that there is no shortage of motivated and experienced individuals looking to develop a portfolio career. John Allan, Chairman of Dixons Retail, tells Criticaleye: “Boards are more conscious of having a strong team of non-executive directors and the contribution that they can and need to make… I still meet a lot of people who want to become NEDs. I don’t think the liabilities issue is frightening most people off.”

This is where another change is occurring – the range and variety of people currently looking to take on NED positions. It’s well reported that boards are under pressure to address the gender balance, but as businesses look towards new markets to achieve growth a broader mix of skills and know-how have to be found.

“In structuring a board there is a need for a broad variety of skill-sets which can change over time, so as part of the board evaluation done annually the chairman should always ask the question: is the board fit for purpose?” says David.

The blend has to be right. John comments: “There is more focus on finding women, and on non-executives from outside the UK, and from outside a conventional business background. There is a lot of talent out there and maybe people are spreading the net a bit wider because they want to create greater diversity, in the broadest sense, not just in terms of gender within boards.”

Stop and listen

As for the qualities required to be a good NED, by and large they remain the same. Nicola Mumford, Non-executive Director of Harbour Ligation Funding, says: “The challenge for the new type of NED, who is reading all of the papers and getting well and truly stuck in, is to maintain independence and a bit of distance, as the more information that you have the more you’re likely to delve into the detail. It takes quite a lot of skill to take it all on board and step back afterwards, and that wasn’t such an issue when the information wasn’t at hand.”

John says: “The really good non-executives learn how to challenge without being aggressive or confrontational. There can’t be a stand-off in every board meeting between the non-executives and management; the ability to make a point, ask a question and raise a challenge without actually provoking a confrontation is actually a very important interpersonal skill which the best non-execs have in spades.”

The fundamental quality to being a good NED is flexibility. Roger McDowell, Chairman of engineering company Avingtrans, comments: “The role of the NED is changing only at the pace that business at large is evolving. So if you pick any of the trends that are happening in business, for example the increased internationalisation, then clearly this is something that NEDs have to keep pace with.”

In terms of actual governance duties and legal responsibilities, as defined in the Companies Act, there have only been modest changes recently. The day job for these highly experienced individuals is simply about knowing when to roll their sleeves up and get involved, and when to keep their counsel.

But to say that it’s business as usual would be a mistake. The range of qualities and level of involvement in understanding an organisation have grown since the financial crisis, which makes the role of the NED both more interesting and fulfilling for individuals and more important for healthy decision-making on the board.

After all, no business can afford to be the victim of ‘group think’ in this day and age.

I hope to see you soon.

Matthew Blagg


Wednesday, 6 June 2012

Advice for Aspiring Non-Executives

The following article appears on the Financial Times Non-Executive Director website

December 2008
Betty Thayer is currently Deputy Chair of She is also a Non-Executive Director with the Appointments Commission, and on the Board of Trustees of three charities, Bath Mozartfest, British Friends of the Piccola Academia de Montisi and the Church Urban Fund. She is also a Member of the Advisory Board of the Bath University School of Management and a Visiting Lecturer at Cranfield School of Management.

Betty Thayer, who founded in 2001, is retiring from the company this month after seven years as CEO. The Non-Executive Director was developed out of, along with our sister site MBA-Direct, so it seems fitting to conduct this month’s interview with our outgoing founder.

Before starting, Betty had a very successful career in consultancy with Price Waterhouse and Andersen Consulting (as they were then) and Ernst & Young. It was while she had an interlude in the corporate world, as Corporate Strategy and IT Director for Lex Service plc, that she got her own first non-executive role. Lex was a contributor to a lobbying group in London called London First who approached Lex’s chairman to see if he would like to be on the board. He didn’t have time but he felt that this would be a good management development opportunity for Betty so he suggested to her that she should take it on. At the time, 1996, this was quite an advanced thing to do. However, Betty says that increasingly companies are beginning to realise the advantages they gain by encouraging the layer of management immediately below Board level to take on a non-executive role with another organisation to get board experience and to get out and network with like minded people.

London First had a subsidiary board, which eventually became Think London. Its purpose was to attract inward investment into London but, despite that, there were no non-English nationals sitting on the board, so her American background provided a very useful fit.

When she was at Ernst & Young, Betty travelled extensively as part of her job but the travel took its toll on her health, resulting in a near fatal blood clot, so she decided it was time to move on to something new. One of the people she spoke to at this point was a head-hunter specialising in recruiting for senior positions who realised that there was no suitable online resource for executive appointments. He invested in Betty’s skills and expertise and was born – straight into the burst of the bubble!

Betty had been interested in portfolio careers ever since reading Charles Handy’s book The Age of Unreason – New thinking for a New World and then meeting him and his wife over lunch. He thinks that most people, once they reach a certain age, need a variety of roles to keep them interested and that the thirst for knowledge, and the thirst for variety, is never ending. So from the very beginning exec-appointments had non-executive and trustee roles and Betty was clear that she wanted to cater to people looking for a portfolio career. And of course at that time there were a number of business failures and a lot of people, many of them relatively young, were finding themselves out of work for the first time and looking for a new approach to working life. So the portfolio idea really began to get up steam and doing something around that just seemed to make sense.

On looking around, the only other relevant site she could find was the Independent Director site run jointly by the Institute of Directors and Ernst & Young. Betty wanted to develop a site that had much more depth to it and was broader in content. Despite having very few resources, she was so convinced that there was a need for something like this that they developed a shell of a site and employed a student from Bath University on a placement for six months to populate it.

By the time the site was ready to launch, there was already a database of potential candidates built up from the exec-appointments site, various conferences and events. At the same time exec-appointments conducted a survey jointly with IDDAS about portfolio working which generated a lot of PR. It all fell into place and The Non-Executive Director was born. “There wasn’t a resource like it anywhere in the world,” comments Betty “and there still isn’t.”

A relatively new development has been the various networking events which are held each year, and Betty feels that these are one of the highlights of her role. “I enjoy speaking anyway, but I really enjoy meeting all the people with different backgrounds and interests who attend,” she says.

The other highlight has been the CV coaching work that she has done and which she hopes to continue. If you would like Betty to give you the benefit of her vast experience, she can be contacted through or on

Betty is also very excited about a new on-line product planned for 2009 which will be a really important initiative in non-executive director professional development, providing added value at a cost that’s affordable. The product is still at a relatively early stage of production but do watch out for further announcements.

So what are Betty’s own plans for the future? “Well, I’m going to take my own advice. I always tell people that it’s easy to say yes and difficult to say no and I’m finding that now myself. I have been presented with offers for several interesting sounding projects and I am having to be very careful not to load myself up with too many. I want to concentrate on a couple of areas and I also want to devote more time to my pro bono work.

I am on the board of several charities and I’m really looking forward to having the opportunity to devote more time to them. I have plans to do more writing and speaking. I’ve already been asked to speak at several conferences in the UK and abroad, and I’m looking to get onto the lecture circuit in India. I would also like to continue my coaching and mentoring work with a select number of people who want to benefit from my unique experience.”

Not perhaps one’s usual vision of retirement then.

And from her unique experience, what are the Thayer Top Three Tips for potential non-executives?

Networking “This is undoubtedly number one. At our recent workshop for aspiring non- executives, I thought one of our speakers, Chris Curling, made a really good point when he was saying that he has lunches planned every day for months in advance but he makes sure that they have a purpose. He eats a lot of lunches but he makes them work. When someone wants to meet up with me, I think hard about why I’m meeting them. I do my research, I find out what they are doing and I work out whether there are any ways we could work together. Otherwise you could just end up eating a lot of lunches and getting nowhere.”

Having the financial bandwidth “This is so important and why I always stress to people about planning their finances well in advance. When you have been used to getting a salary cheque every month it can be quite a shock when it’s not coming in any more, and you have to give thought to what you need to do to adjust your lifestyle to accommodate the change in circumstances.”

Planning your time “Make sure you have enough time to give to all your appointments. Board meetings all tend to be in the third week of the month. I’m not on that many boards but I’m already finding clashes occurring. Planning your diary well in advance is crucial.”

“And finally, remember that you don’t have to be someone famous or a known name to find a useful role. In my most recent appointment, as non-executive director of the Appointments Commission, they’d never heard of me before I applied, but my professional background made me an extremely good fit. As long as you have strong credentials, and you look for roles which your experience and background are relevant for, there’s no reason why you shouldn’t get an interesting and enjoyable role as a non-executive director.”

Career Advice for MBAs

Elon University Love School of Business alumni offer students advice during Homecoming 2011

Graduates of the Love School of Business shared career advice with current students during a panel discussion held during Homecoming weekend.

L to R: Thayer, Casullo, Tamer, Hairston and Serow.

Panelists included:

Jeff Casullo ’09, business technology analyst, Deloitte Consulting

Carl Hairston ’11, associate district manager-small business services, Automatic Data Processing

Claire Tamer ’11, inventory coordinator-cost accounting, IBM

Betty Thayer ’80, entrepreneur and founder of

The panel was moderated by senior entrepreneurship and marketing major Brian Serow.

During the discussion, panelists urged students to seek out opportunities and get involved during their time at Elon. They recommended students embrace class presentations and group projects; take initiative and become involved outside of class; participate in competitions; and find ways to make themselves stand out. These experiences not only provide networking opportunities, but also the chance to think and learn in the moment.

“You are always networking and you are always interviewing,” Thayer said. “Every interaction is networking. Take heed of how you look and act; you never know when you might meet someone.”

Thayer also stressed the importance of being financially literate and having the ability to understand financial statements and what the numbers mean for business.

Hairston said having a good work ethic is crucial when it comes to being successful. Students must be willing to work as hard, if not harder, than their peers.

When it comes to the job search, Casullo said, “Don’t take the first job just for the job. Figure out what you want to do and then go the place where you can learn the most.”

Tamer added, “Don’t limit yourself geographically. Take the chance, go on the adventure.”

The panel discussion was followed by the LSB Silver Anniversary Reception, which celebrated the school’s successes of the past 25 years.

For the full article click here

Written by: Rachel Vierling ‘12

Monday, 4 June 2012

Board Assessment - Challenges for year to year continuity

One of my business interests is Across the Board (ATB Governance Limited).  Together with Vanessa Williams of ClarksLegal and Josephine Crabb we have developed a bespoke approach to Board Assessment that has been applied at a major UK member organisation over the past two years.  An important tenet of Board Assessment is to ensure that the process is conducted over several years in order to understand how performance is changing. 

Our work for this organisation was prompted by a collective recognition that Board Assessment made good business sense.  Shortly before the second year of the process was initiated there were substantial changes to the organisation's management.  This posed an interesting challenge for all participants - was this the time to express their frustrations and ask for change, or should they sit tight and wait for the new management to settle in?

The interim team decided to forge ahead with the assessment so that the new board would have a better view of what they would face.  The resulting assessment has achieved its objective - the new management have been appointed and the report is serving as guidance for new strategic board direction.

Ernst & Young have recently published commentary of Board Effectiveness.  Richard Wilson, partner in charge of the Independent Director programme, suggests some due diligence questions for those considering a new board directorship:

1  How well do I understand the company's business and the business model it is following?
2  How do my skill sets and experience add value to the business?
3  How does what I bring to the board complement the experience that already sits around the board table?
4  What do I think of the chairman and am I convinced the board wil be led effectively?
5  What is my impression of the chief executive and the management team and is there enough initial engagement for me to make an assessment of their capabilities?
6  Do I have enough time to take on the appointment?

Ernst & Young publish quarterly BoardMatters.  To download a copy visit