Equality, diversity and inclusion at Board level is a key focus for many businesses at both executive and non-executive level. Since the Davies report in 2011 PLCs across industries have been building EDI initiatives into their Board appointment strategies. With FTSE 100 Boards achieving 27.7% female representation in 2017, the recent government backed Hampton Alexander Review acknowledges that progress is being made, however there are still a number of challenges facing businesses who are looking to increase their Board diversity.
The business case for diversity at Board level is strong; diverse leadership teams increase the agility of businesses, bring a broader range of perspectives to strategic planning and facilitate/drive greater innovation in development.
However, improving diversity can be challenging, particularly for AIM listed Boards. With fewer NED positions available in these leaner businesses the opportunities to increase diversity are limited. Indeed, analysis shows that women made up just seven percent of Board appointments on the AIM market in 2015, and there is little research to suggest this has changed significantly.
Existing networks can be a powerful tool in the search for NEDs, however they can also limit the pool of candidates that appear to be available. When Boards choose to partner with a search firm a key part of their assessment criteria should be the depth of the research expertise, since it is primarily through delivering targeted and informed research that search firms are able to identify and attract high calibre individuals who are not obvious/present in existing networks. From an EDI perspective this is particularly important, as an effective search partner should be well placed to identify the best potential candidates for the role, in respect of both ‘functional’ specification and the desired interpersonal/Board dynamics – of which, EDI is a key aspect.
At Edward Drummond & Co, we are committed to helping our clients to achieve their EDI aims. We don’t believe in arbitrary quotas. We do believe in inclusive research. Our Board search practice is founded on the principle of giving our clients access to the best range of candidates, including innovative and commercially astute rising leaders from a diverse range of markets and backgrounds. In the context of adding value in EDI, three themes recur:
- Back to basics: we approach each NED brief as unique and conduct a full market analysis and map tailored to the requirements of our client. This means we are not solely reliant on existing networks. We create a new network with each new search, leaving no stone unturned and generating the most current, up to date insight into the market.
- Thinking forwards: We find individuals who can contribute to the long term strategic growth of a business. We ask our clients not only what they need now, but what they might need in five years’ time, enabling us to identify leaders who have the right combination of ability, potential and shared vision/approach.
- Future leaders: We focus on giving our clients access to the next generation of NEDs, creating search plans which identify the rising stars within business who are primed to take on their first NED role. A crucial aspect of increasing diversity at Board level is the cultivation of new NED talent, and our search practice is designed to facilitate the transition of high calibre, senior women into their first NED appointment.
If you’d like to discuss our Board practice, please get in touch with our Senior Partner Neill Fry on 0117 314 0850.