NEDs are proactively seeking a range of learning and development opportunities to enhance their knowledge and personal effectiveness.
This ability to ask better questions clearly requires not only a good understanding of all the issues impacting the organisation, but also the soft skills needed to engage successfully with fellow executives. While boards already do much to support incoming NEDs, such as structured inductions programmes led by the board chair, our research reveals that NEDs frequently and proactively seek out opportunities to expand their own learning and development. For example, 41% of NEDs say they have completed a training course in a specialist subject area since taking on a NED role.
Alongside seeking out regular training and development opportunities, a majority of NEDs (57%) say they have joined a formal NED programme run by an advisory firm, such as EY’s Centre for Board Matters. Others have joined one of the independent programmes on offer run by organisations such as the Non-Executive Directors’ Association or the Financial Times. Structured NED programmes provide not only the opportunity to network and learn from peers, but also provide regular exposure to leading industry thinking and access to market opinion formers and respected commentators. Other ways to plug gaps in their knowledge include coaching or mentoring and professional certification (adopted by 24% and 14% of NEDs in our survey respectively).
Whatever the approach taken to filling gaps in their knowledge, NEDs are clear that they are looking for opportunities that will provide new angles on topics and give them fresh perspectives on the questions to ask in the boardroom.
The need for fresh perspectives
NEDs already play a vital role in bringing fresh thinking and experiences into the boardroom and in challenging perceived wisdom but, as technological and market change accelerates even more rapidly due to COVID-19, there is a need for fresh and more diverse thinking.
In some instances, this can be achieved by inviting people with experiences across different industry sectors and multiple boards to take on non-executive roles within a new sector. One of the senior NEDs agrees: “I am a big supporter of being on a number of boards for this reason: you get to see things from multiple perspectives”.
In order to further broaden their perspective, some boards are now actively targeting younger NEDs or those who come from a wider variety of backgrounds with more specialist knowledge. One interviewee with nearly two decades of experience in NED roles explains how the composition of boards has changed significantly throughout her time in post: “Today I see more people getting involved on boards at a younger age. I think that is a very good development. People are now being actively recruited for boards who are IT and systems literate or who have a lot of experience with the customer and customer experience. They know the right questions to ask of the executive team to address these new organisational priorities”.
EY also spoke with several up-and-coming NEDs who believe that more needs to be done to cultivate participation from a younger cohort of NEDs. One way of addressing this experience gap is through initiating a shadow board. These boards comprising younger members with a more diverse range of backgrounds. They receive and discuss the same board papers as the organisation’s main executive board and are asked to come up with creative solutions to the strategic challenges facing the organisation. This can be an effective channel to capture fresh thinking without adding lots of new seats around the board table and provides a helpful steppingstone for early career professionals to take on a quasi-NED role.
Of course, the need to broaden perspectives and reflect society more closely goes well beyond more youthful cohorts. Gender and ethnic diversity remain major challenges for boards, with the latest Hampton-Alexander review into female board representation and the Parker Review on ethnic board representation both being published recently. We expect this to become an increasingly important topic for boards in 2020 and beyond.