An interesting post here in response to David Walker’s review of governance in financial institutions in the UK. Walker suggested that non-executive directors of finance firms should double the amount of time they spend on the role, which would reduce the number of such positions they could hold. The FT is concerned that there might not be enough skilled professionals to fill the resulting vacancies: The Gingerbread Girl suggests that there are thousands of suitable people out there, they just don’t happen to be in the same networks as existing board members, which is how most new recruits are found.
Trustee boards in the charity sector in the UK face remarkably similar problems. Most (around 80%) recruit new board members from their networks. ‘Word of mouth’ is great for getting people who you know and trust, but it means that you are looking in a very small pool of people. It means that boards are often full of people from similar backgrounds: nearly half are over 60. Homogenous boards risk falling into certain habits, and may find it hard to challenge themselves and change their behaviours. (click here to read NPC’s report on the issue.)
Furthermore, as Gingerbread Girl points out, board members don’t have to have years of experience of whatever sector they are governing. However,
“they must be able to formulate questions, drive for answers and resist the temptation to cosy up to the CEO and other members of the board. Above all, the Western virtue of courage is what is required: courage to admit when you don’t understand something and to make sure you get the answers you need before you take decisions.”
Ditto to charity trustees.
So come on boards, be a bit more adventurous and look beyond your usual suspects, and get some bright young things on board. A step into the unknown it may be; but it will help you to modernise, reenergise yourselves and, hopefully, be more effective.
We found this post through Bloggers Circle, a new initiative being spearheaded by Matthew Taylor at the RSA, to make sure that interesting posts get a wider audience.
