Gettting the right board structure

    
Tiny Rowlands famously described non-executive directors as ‘Christmas decorations – pretty but useless’.  
   
With the collapse of the Maxwell and Enron empires this is all changing. A series of regulations has been introduced over the last ten years in response to various corporate scandals with a key feature being the more onerous role expected for non-executives: the Cadbury, Greenbury, Hampel, Higgs and Smith reports each addresses a different aspect.  
   
So what should a modern non-executive do and how do you find the best person for your needs?  
   
The role of a board is generally seen as being to: ensure the company’s growth and continuation, select and manage a chief executive and be accountable to the public – through both compliance and financial care. A good board therefore needs a mix of skills – those who will perform a regulatory watchdog role alongside those who can add a dash of entrepreneurial flair.  
   
Traditionally, the brief for a non-executive was to find ‘someone like us, one of the chaps and who knows everyone in the City’.  
   
Dean Laura Tyson, former Clinton advisor who now runs the London School of Economics, was asked by the government to look at board diversity. Her view was that too many non-executives were white, male and middle class when in fact ‘widening the gene pool’ for non-executives would make for better boards and better businesses.  
   
There will be times when a company needs someone who understands their way around the City – but they do not need to be a ‘name’. And they certainly no longer need to be white, male and middle class to deliver the results that a company wants.  
   
If a company does go outside their traditional networks to find non-executives, they can find considerable – and affordable – talent.   
   
At Directorbank we see time and again that very senior people can be coaxed into businesses large and small because they want a new challenge or to put something back. We have a dynamic database with around 2,500 directors who are interested in being a non-executive, all with an extraordinary track record of success – some have just exited from an MBO or MBI, many have left a company because of a merger or acquisition and considerable numbers have built up and sold their own businesses.  
   
Non-executives can help owner managed companies to be objective about succession planning – a difficult issue for many directors whose views can easily be clouded by loyalties and expectations of colleagues, especially if they are relatives.   
   
One business that Directorbank helped was a board dominated by family members. A non-exec was found who spent five years helping them look at the future, the skills they needed and identifying and coaching various board members. He sent one off to Harvard and helped recruit another.  
   
And this is where non-execs bring the greatest value – outside, objective views and skills that can supplement those already in a business. They can be a wise sounding board and most of all help with the vision and strategy to take a business to the top or remain there against competition.