Broadening the pool of non-executive directorsMuch has been written recently of the failure of the role of non-executive directors (NEDs) to prevent bad behaviour. Many commentators suggest that it is the small pool of people available for appointment at this level that causes problems. The same names turn up on multiple boards. These people all tend to know each other both socially and through business. It is difficult to question the actions of someone you’ve known since school days or will be meeting for dinner over the weekend with your spouses. How likely are you to veto the decisions of the CEO of the company for whom you are a NED when that same person may be questioning your judgement because they serve on the board of the company you manage? It’s all very incestuous. It’s a particularly acute problem in Ireland due to our small population. The media focus on NEDs has also brought home the gravity of the role as well as the impact it may have on your other business interests when things go wrong and there’s a pack of journalists outside your front door. So how can we ensure a strong pool of potential recruits to serve on boards as NEDS? There are lots of well educated people out there who are qualified for the role but because they are not be in high profile career roles or linked socially to the stars of the business community they don’t get considered when boards are hunting for new NEDs. I believe we could take a lesson from the not-for-profit sector here. Boardmatch Ireland offers volunteer board members the opportunity to register their interests to help find a good match for a charitable board on which they might like to serve. Why not do the same for paid NED positions in the commercial world? People who are interested could register and submit a summary of relevant experience and education. Companies could search for potential candidates much as traditional job recruitment websites do. This could be tied into education about the responsibilities involved in being a NED. Prospective candidates could be asked for a registration fee and be required to attend a certain number of development sessions (maybe something like those offered by the Director Development Programme in the Smurfit Business School). This would also ensure that they were serious about the commitment involved in being a NED. Companies that want to use the facility to search for candidates could be charged a membership fee which helps support the education of potential directors. The result is a broadened pool of potential directors and hopefully a better pool as they’ve attended development sessions in corporate governance.
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