Diversity is key to any modern Boardroom, but concentrating on only one form of diversity isn’t enough; a Board should represent every aspect of the organisation or community it represents. Evidently, a diverse Board is better positioned to understand its customer base and the business environment in which it operates. Even more importantly, to ensure diverse Boards are effective, Boards need to have a culture that elevates different voices, integrates contrasting insights, and welcomes conversations about diversity.
We would like to introduce a new series of articles and interviews with senior leaders, who we have placed into Boards across the public sector. This series provides personal insights and discussions around what the modern Board should look like, challenges they have faced, and ways to overcome these challenges. Below we introduce some of the key challenges and topics of discussion that will feature in this series.
The value of lived experience
“I just want to give something back” is a familiar response from prospective non-executive directors when asked why they have applied. Whereas this used to be a catch-all phrase from successful executives approaching retirement, increasingly it comes from those who can bring lived experience to the board. Included in their membership, organisations want board members who live and work in the communities they serve, who appreciate the community challenges, bring valuable cultural understanding and see the difference that a progressive anchor organisation can make; more enlightened boards now actively look for candidates who bring lived experience, because they have valuable insight and knowledge to contribute. These candidates can often be younger, first-time NEDs, who have most likely never previously considered joining a board.
Experience versus no experience
If the new cohort of candidates who want to give something back are first-time NEDs, they quite rightly expect something in return. Increasingly, more organisations are putting positive measures in place to make sure that they can attract, develop and retain board members who bring lived experience:
- Evening board meetings mean those who are in full-time employment can attend;
- Induction programmes are more comprehensive, not just a quick tour of the office;
- Skills gaps aren’t seen as a reason to decline candidates, they form part of a training and development plan;
- They make it clear why that person has been appointed – it’s not to tick a diversity box, it’s to bring incredibly valuable insight and knowledge, to add to the diversity of the voices being heard around the board table, which in turn can help organisations better serve the community.
If this means taking on younger, first-time board members then there will be a learning curve, but there is an argument that it’s better to work with someone who’s hungry to learn and offers a different way of thinking, than someone who thinks they’ve seen it all and done it all.
There’s room for everyone – a balanced board
Whilst the insight from lived experience can be a huge benefit to a board, there also has to be a balance of skills and experience on a high-functioning board. Although lived experience is currently sought after, it doesn’t mean that professional skills are any less in demand. Finance, HR, digital, customer insight, development, etc. are all high on the list of requirements currently as organisation undergo reform and restructure. The same applies to asset management, which increasingly is paired with sustainability as required skills.
Sector versus non-sector
A question we are frequently asked is whether the public sector is genuinely open to non-sector candidates. The majority of boards are very clear on this. Yes, they do need public sector expertise, but group-think can be avoided by ensuring a balance of knowledge and expertise from a spectrum of private, public, and third sector backgrounds. This sector agnostic approach also builds board diversity in its broadest sense.
2022 and beyond
The NHF 2020 Code of Governance change to the recommended tenure for non-executive directors has naturally had a huge impact within the housing sector, with boards losing experienced members who have suddenly become time-served. Governance changes are echoed across the public sector and higher education: 50% of our work over the last 12 months has been focused on Chair and NED searches. The most common requirements in our searches have been to find candidates who bring lived experience, younger and more diverse talent, social care, customer experience, sustainability, and environmental expertise. The latter two, along with insight into cyber security, feature most prominently in the conversations regarding anticipated skills gaps on boards over the coming years.
Succession planning
As a result of this surging demand, and recognition that some board members are rapidly approaching their six-year limit, many boards are proactively planning for the future by co-opting candidates of interest onto committees and seeking to ‘grow their own’. Not only does this support succession planning and help smooth out rapid learning curves, it also gives first-time NEDs invaluable insight into the non-executive role to make sure it’s what they expected and want.
Skills Gap Analysis
More and more often we are being asked to support boards in the development of modern, forward-thinking skills matrices that will help them identify the skills they need to support the delivery of their strategic objectives both now and in the future. The focus here is not just about the skills and experience that are required to successfully oversee an organisation, but also a real focus on behaviours and culture that provides the foundations for a high-performing board. Connect this together with effective succession planning, focused search and recruitment, and well-informed board development, and the recipe is there for developing the modern boards that will take us into the future.
We would really welcome your views and insights into the modern Board, or if you’d like to discuss your Board challenges and how we can help, please contact Nick Roberts, Principal Consultant – Housing (nick.roberts@www.gatenbysanderson.com), or Zoe Wortley, Partner – Board Practice (zoe.wortley@www.gatenbysanderson.com).