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In-house Division

In-house Division seminar – routes to the board: a seat at the table for in-house lawyers

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Simon Osborne, chief executive and fellow of ICSA, outlines routes to the board for in-house lawyers.

Speaking at the 7 September In-house Division seminar on routes to the board, I was struck by the diversity of talent on display in the room. Not only were there broadly equal numbers of women and men in the room, the ethnic diversity of the audience made me lament the fact we are woefully lacking in the UK in terms of ethnic diversity on boards. Considering the breadth of experience that is available in the legal profession, UK PLC is missing a trick by not embracing the wider pool of talent that is on offer.

Companies need to engage with an increasingly diverse range of stakeholders yet, with Sir John Parker’s report into ethnic diversity revealing that only 1.5 per cent of directors in FTSE 100 boardrooms are from a minority background, UK companies are failing to accurately reflect the ethnic diversity of the UK or the stakeholders with whom they are seeking to engage.

Worse still, a recent survey by Green Park ‘Changing the Face of Tomorrow’s Leaders: Increasing Ethnic Minority Representation in Leadership’, found that eight in ten ethnic minority leaders believe there is institutional prejudice in the UK workforce, although most (nearly three-quarters) believe that the majority of workplace prejudice is unconscious.

UK boardrooms cannot afford to operate on unconscious bias, which is why it is shocking that over a fifth of firms surveyed by Green Park admitted to being unaware of current progress towards diversity targets and 18% did not know where to start.

Diversity should be a central principle of any recruitment or talent management strategy so that companies can benefit from breadth of experience and expertise. Hopefully the emphasis that is currently being given to greater diversity in the boardroom will oblige companies to think harder and differently about the backgrounds of new directors.

One way lawyers seeking directorships might benefit from government interest in diversity could be to apply for a public appointment. Approximately 1000 appointments each year are advertised through the Public Appointments Commission. Such a role can be a fantastic stepping stone to a non-executive director (NED) role elsewhere. Trusteeships are also good springboards for directorships, a point stressed by Katherine (Kat) Sparkes, chief executive of Getting on Board, who drew people’s attention to the fact that there are approximately 90,000 trustee vacancies for charities in the UK at the moment.

Trusteeship is a good complement to professional life, and many skills can be learned on the job. Prospective trustees should do it for the right reason, however, and be realistic about the amount of time that they can commit to a role. Two- to three-year terms are typical for charity boards, and thirty hours per year is the average amount of time necessary to commit to a charity board. This commitment is likely to be higher if you opt for a government appointment. These roles can be demanding and you can probably increase mentally whatever you are told will be the potential time commitment. Be honest about the amount of time that you can commit and make sure that your employer agrees to you taking time off to do the role.

It is vital to carry out due diligence before accepting a role. As my fellow panellist Kit Bingham, a partner in the Board Practice at Odgers Berndtson and head of the Chair & Non-Executive Director Practice, advised, it is now common for NEDs to want to see board minutes and even a board evaluation report before committing to a directorship. Similarly, they may wish to speak to past NEDs, executives or the industry regulator. If a company says ‘no’ to these requests then you should think carefully about accepting a directorship.

Career lawyers have traditionally found it harder to get a seat on FTSE 350 boards than accountants, particularly since the financial crisis. As Kit pointed out this is largely prejudicial as they are seen as advisers rather than deciders. Lawyers are commercial, however, in their outlook and focus, managing large teams. As regulation, compliance, legal threat and scrutiny increase, there will probably be more demand for commercially focused lawyers to be appointed to boards. His advice to potential NEDs is to start building the skills that you will need and to use language that businesses will understand, such as ‘I cut costs’.

Interpersonal skills are what make the difference between a good and great non-exec. The ability to be a critical but supportive friend is a difficult but crucial skill. It is important not to be too forensic or to become the irritatingly right director. You need to have a collegiate approach but, as Kat so rightly pointed out, the ability to ask questions, challenge the status quo and put your head above the parapet are the most useful attributes that you can bring to the board.

For those seeking a board position, Kit had some useful advice:

  • Really understand who you are and express that in your CV. Have a short paragraph at the top that articulates why you think you would be a good fit for the role
  • Think about the specific skills you have that make you different from other contenders. Stick to four unique selling points
  • Highlight any sector, business and functional experience
  • Network like crazy. Get sponsors/endorsers who can open doors for you working for you right at the start of the process
  • Take your time. The NED market is small and slow moving so view it as a long game.  

Abhijit Mukhopadhyay, president (legal) and general counsel (Europe) of Hinduja Group also had some useful tips, including:

  • Concentrate on your qualities and what you can bring at board level
  • Be cognisant of conflicts of interest, e.g. there is likely to be a dilemma between being a director of a subsidiary company and being general counsel for the group
  • Make sure that you know the business, the product and the industry. Once you understand the business, consider how you can apply your knowledge of the law to the business
  • Remember that being a director is a privilege.

Words of wisdom from Kat Sparkes:

  • Pick a cause that you care about
  • When putting together your CV or covering letter, you don’t have to have personal experience, but you do have to show that you care about the organisation
  • Tweet a trustee and have a coffee to find out more about the board.

To this I would add the following:

  • Broaden your skills base
  • Become comfortable with financial statements. If many countries, if you want to sit on the audit committee, you must be financially literate. Get a friendly accountant at work to help you understand finance reports or take a training course that addresses finance for non-finance directors
  • Ask yourself why you want to become a director. If you are in it mainly for the money, perhaps you should think again
  • What type of business or activity interests you and why
  • Check out your prospective fellow directors
  • Ask the CEO what causes their sleepless nights
  • Assure yourself about the adequacy of the D&O cover. 

ICSA offers a Fast Track proposal for lawyers www.icsa.org.uk/fasttrack

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About the In-house Division

Your In-house Division is dedicated to meeting the needs of in-house lawyers working in the corporate and public sectors, not-for-profit organisations and charities.

See our 2016/17 Engagement Programme.