At Berwick Partners we have recently undertaken a research project looking at ‘Board Evolution’. From our conversations with numerous CEOs, NEDs and Chairs, we have been able to highlight five areas which will be critical to the evolution of boards as we move out of the COVID-19 crisis: board structure, the importance of business culture, a focus on diversity & inclusion, the need for strong communication and the growing pressures of ESG and sustainability. Here we look at the focus needed on diversity & inclusion…
Throughout the conversations it became clear that leaders from all industries believe there is a lack of genuine diversity of thought in the boardroom, with many focusing solely on ‘the optics’ rather than diversity of upbringing and experience.
Whilst everyone agrees that board appointments must be made on merit, do organisations need to reassess how they are defining that merit? It seems that they need to get comfortable recruiting people whose answers don’t all come from career experience in identical situations.
It is a fact that most organisations are constrained by the homogeneousness of their board, and their capability to grow is usually linked to the quality and diversity of this group. Leaders from all sectors agreed that, as a minimum, representation of the customer base is an absolute must.
What the leaders had to say…
Looking at the future make-up of a board purely in terms of which functions should/could be represented is an unhelpful way to look at things. We need to get comfortable thinking more holistically and address diversity of ethnicity, gender, sexuality, and age on our boards first and foremost. This is especially important in consumer-facing businesses; we need to represent those we serve when making big decisions.
Lynne Weedall, NED and Remco Chair in Hospitality
Zoom communication will also help with diversity. It reduces the requirement to travel to London, thereby opening up the opportunity for those (such as working mums) with time constraints to undertake a NED role. The lack of formality may also make the Board less intimidating and more accessible to emerging leaders.
Ian Penrose – NED Chair CEO
I think businesses certainly need to be bolder from a diversity perspective – this is what drives different points of view. The important thing to consider here is that some companies find it very difficult to attract diversity to their leadership teams, sometimes because of the sector they are in, even though the board may be desperate to recruit such talent.
Organisations that have an international footprint should have an international make-up to their board.
Tim Cooper, NED, Renold Plc & Pressure Technologies Plc
There is a limited degree of diversity at the main board and ExCo in general, not necessarily just on a gender or ethnicity basis, but a genuine lack of diversity of thought.
Malcolm Harrison, CEO CIPS
At the Board -1 level people often lack the collegiate mentality which is utterly vital at Board. The need to speak up is critical at Board. But the vocabulary is different to the executive lexicon. Managers manage by ambition and hierarchy. The board focus is substantially different. Self-awareness and honesty are critical. Board and NED roles require people to be empowered to speak up.
Harry Reilly – Chairman, multiple Chair & NED
From a diversity point of view, I think that ethnicity and gender are well thought about but need to be actioned better. The science and technical expertise take over from discussions and focus on diversity. Needs to be balanced but not take over from the core objectives.
Nicholas Benedict, Chairman & CEO at Vaderis Therapeutics
Within the UK scientific industries, the biggest D&I challenge is social mobility. This affects the level of STEM talent in the market.
Simon Kerry, CEO at Curve Therapeutics, Executive Chairman at Encipher Biotherapeutics, Non-Executive Chairman at Argonaut Therapeutics, Operating Partner at Advent Life Sciences, Non-Executive Director at Medcity
Most companies are constrained by their management teams, and their capability to grow is usually linked to the quality of this group. A team that has performed well will, at some point, reach a plateau of revenue growth, requiring a new management team to take the business to the next level……a start-up team is different to the one that would internationalise it.
It is important to have people who are larger than the business that they are leading – so that they do not get altitude sickness. You need people who can lead a business at the next level – especially the CEO who creates the vision for the scale of the enterprise – and the ExCo.
Nick Brayshaw Chairman, Sentinel Performance Solutions, Technical Fire Safety Group, and Kingswood Capital