Audit Committee Bulletin: January 2014

Boardroom recruitment: time for a change?

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How balanced is your board? Does its current composition and representation meet the needs of your organization and help you maintain competitive advantage, or is it time for a change?

While Europe has successfully brought the issue of gender diversity on boards to the forefront of the global debate, recruitment methods forboardroom positions have hardly changed.

We offer four practical considerations for improving your boardroom recruitment, based on insights gained from conversations with clients and board members across Europe.
EY image showing desired and actual  proportion of female board members in EU

Personal networks still form the main method for identifying and recruiting candidates, and often only those who have already served on boards will be considered. These factors work against efforts to broaden the base of experience and skills and maintain a mix of perspectives in the boardroom.

Many business leaders share the view that the current boardroom recruitment process needs a shake-up.

These four practical considerations for improving your boardroom recruitment arebased on insights gained from European business leaders and board members:

Realign the board’s composition with the business’s evolving needs, considering ssues such as numbers and profile of non-executive directors, duration of service and sector-specific needs.

Use headhunters more effectively, such as alternating recruitment firms and separating evaluation from search. You could also consider hiring headhunters who represent the candidate rather than the client, advertising for boardroom posts, or using the growing number of databases to identify new candidates.

Create a larger pool of potential candidates by abandoning the requirement that candidates “must have experience of a PLC board.” Instead, consider those with analytical skills, independence of thinking and a capacity to challenge established ideas.

Make a succession plan and keep it transparent. To create a high-quality pipeline of talent, provide training for would-be non-executive directors within your own company by placing them on committees just below board level.

  1. Structure
  2. Realign the board's composition with the business's evolving needs, considering ssues such as numbers and profile of non-executive directors, duration of service and sector-specific needs.

  3. Process
  4. Use headhunters more effectively, such as alternating recruitment firms and separating evaluation from search. You could also consider hiring headhunters who represent the candidate rather than the client, advertising for boardroom posts, or using the growing number of databases to identify new candidates.

  5. Criteria
  6. Create a larger pool of potential candidates by abandoning the requirement that candidates "must have experience of a PLC board." Instead, consider those with analytical skills, independence of thinking and a capacity to challenge established ideas.

  7. Succession
  8. Make a succession plan and keep it transparent. To create a high-quality pipeline of talent, provide training for would-be non-executive directors within your own company by placing them on committees just below board level.