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:
Abhijit Mukhopadhyay, president (legal) and general counsel (Europe) of Hinduja Group also had some useful tips, including:
Words of wisdom from Kat Sparkes:
To this I would add the following:
ICSA offers a Fast Track proposal for lawyers www.icsa.org.uk/fasttrack