When it comes to getting the right quality of board member in your boardroom, do small to mid-size housing providers lack ambition in who they expect to attract?
There is a very real opportunity to take advantage of those who are still in their executive career, but with the right approach, can add value to a skills-based board.
One of our clients, Wandle, a London- based social housing provider with over 7,000 homes, made five appointments of ‘rookie NEDs’ in the past year. Tracey Lees, their CEO, shares what’s been learned from that experience.
Here are the five major lessons.
Get succession planning right
Firstly, with multiple appointments to make, Wandle put a succession plan in place.
The programme of appointments would mean two NEDs were appointed in Autumn 2016, and two further individuals would join the board in Autumn 2017.
In the meantime, they would be co-opted onto committees.
Why? Committees are a fantastic training ground. This created succession which was ‘oven -ready’ and already carefully aligned to Wandle’s corporate plan – Road to 2020.
Whilst putting people at a committee level allows people to get to grips with the sector, it also enables them to start to put themselves in a slightly different frame of mind.
It’s also important that those still in the day job can develop a whole new skillset.
Tracey is clear that you have to give people time to grow into this space, but also provide the right tools to enable them to understand the quirks and nuances of the sector. You cannot expect new appointees will be the perfect NED immediately, but the effort will reap significant rewards.
Finally, Tracey believes that committees are a great test bed. If no promises are made and it is decided that someone will struggle to be a fully-fledged board member, you can still retain the talent you saw in them within your governance framework.
Create a robust learning process
No one can be expected to be an expert overnight. Likewise, a ‘rookie NED’ won’t know how to be a good NED from day one. It’s dangerous to assume otherwise.
It can cause disruption in the boardroom and disharmony between the executive and non-executive.
The following has helped Wandle ensure their first-time non-executive directors land well:
- Have a robust induction programme. Get new NED’s out and about to learn about the business and the customer base fully. If you don’t do this, how can they truly add value to the boardroom?
- Encourage your new NED to focus beyond their functional specialism from the very beginning. This is where a lot of the ‘killer questions’ come from and it drives the right behaviours in the long term.
- Never underestimate the value of a buddy system. The more experienced NEDs can help to build confidence in the boardroom, and help the rookies to think about how they can best contribute.
- Set expectations early. A good NED is someone who contributes outside of meetings, not someone who just turns up for the main event. Avoid being disappointed/frustrated by the lack of contribution a new NED makes outside of the boardroom, by setting the tone.
Build in some flexibility
The saying goes ‘if you want something doing, give it to a busy person’. Those in a day job are more than capable of finding time to add value to your housing association if they are the right people.
For this to work, there has to be flexibility on the part of the housing association. For example, arranging meeting times and how you engage with your NEDs outside of the boardroom. Tracey’s view is that the return on this kind of investment has been worth it.
Free your thinking on diversity
The benefits of diversity in the boardroom are well documented. The reality is that trying to build a skills-based board, whilst also finding experienced NEDs, can make diversity hard.
This is where growing your own talent really does pay dividends. Wandle’s commitment to diversity paid off. Beyond the skills diversity of the five appointments made, two were female and two are BME candidates. The average age of the board has decreased by six years, and each candidate brings very different life experiences.
Finally, lateral thinking leads to a richer pool of candidates. Don’t be too prescriptive about what the ideal CV looks like. Wandle is now benefitting from an energy and enthusiasm in the boardroom that is unprecedented.
To discuss how Odgers Berndtson can help you find and develop your NED leadership talent, please get in touch.
You can find out more about Wandle, and their most recent appointees, here.
As many businesses set targets for gender-diverse leadership teams, Liz Stewart argues that the b...
A poll of finance leaders from over 200 UK-based companies delivered the strong message that stay...