Charlotte Sweeney was asked by former business secretary Vince Cable to review the executive search firms’ Voluntary Code of Conduct in September 2013 and published her report in March 2014. She was very clear that “further transparency across the industry would help identify where any further barriers were and inform where focused action is required”.
Fiona Hathorn of WOB is if the belief that transparency means advertising vacancies. She suggested that while headhunters are open to finding female candidates and have been supportive of WOB’s work, they tended to avoid transparent recruitment processes.
She said: “Many agree with open transparent processes but in reality, rarely are FTSE board positions advertised. Most top headhunters still prefer to hold recruitment cards very tightly and often hidden from open view. There can be very good reasons why this is the case, for example replacing a non-performing NED, but this should be the exception rather than the norm. Currently it is the norm.”
What really matters is the size of the headhunter’s fishing pond, as well as the size of the net. Hathorn claimed most are fishing in the same C-suite pond by finding the obvious suspects that are the easy, low risk sell to boards. But Robert Swannell, the current chair of Marks & Spencer, recently said at a conference that lively discussions are needed in boardrooms to keep executives on their toes. He brought into his boardroom Martha Lane Fox, one of the founders of LastMinute.com – who had not previously had FTSE level Board experience.
Hathorn suggested that despite this, most headhunters would never advertise FTSE roles.
WOB has suggested that it is important to increase the transparency of the board recruitment process and to work with headhunters and the government to “turn off the spotlight and turn on the floodlights” when recruiting board members.
Doing so would create a deeper pool of diverse talent and ensure that more of the “quiet achievers” who aren’t known to today’s board incumbents have the opportunity to compete for roles, WOB said. However, a few changes will be needed to the typical candidate brief to make this successful.
In particular, WOB said, the following common pre-requisites will have to go:
Done it before: If we want to enlarge the pool of board candidates then this requirement has to be struck off, at least where “it” means sat on a listed board. As the numbers show, the vast majority of past members are white males.
Known to the board: “If we want new and diverse candidates then boards will need to take a risk on people they can’t reference directly from within their networks,” it claimed.
C-suite experience: With men filling 95 per cent of the top executive roles in the listed sector, “ready to step-up from the C-suite” can no longer be a mandatory pre-requisite to join the board.
“It is the fear of the unknown that forces boards and head hunters to recruit the known,” the WOB explained. “Assessing the fit of a candidate for a specific board, taking into account current personalities, is obviously important because of the nature of the collective decision making environment. However what does ‘fit’ actually mean? Research recently undertaken by Laura Rivera from Kellogg’s School of Management showed that recruiters frequently over-weight fit and rarely define it.”
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