Board & Leadership Practice
In a recent survey undertaken by Augmentum of the boards of directors of companies the shares of which are listed in the FTSE100 and 250 indices, it was established that, of the current FTSE 100 executive directors, 60 per cent. have no external corporate responsibilities. The figure for FTSE 250 directors is even higher.
The considerable experience and expertise of these directors is being denied to other companies. Nor are these individuals gaining the broader perspective and experience that comes from sitting as a non-executive director (“NED”) of another company which, inevitably, will face different issues.
Generally chairmen restrict executive directors from accepting external appointments until they have been in post for two or more years, and then limit it to one external role per executive director. But even if directors who have been in post for less than two years are excluded, over 44 per cent of FTSE 100 directors have no current external plc directorship. The opportunity for cross-fertilisation, which could be of considerable benefit to all concerned, is being lost to the companies, their shareholders, the individuals, and the British economy in general.
Another key finding is that 21 FTSE 100 companies now have only two executive directors, compared to 14 companies last year. If this trend continues, it will be increasingly difficult for line managers to gain exposure to and experience of boardrooms. Previously divisional heads would have expected to be given a board seat.
Because we believe this is important, we have developed a dedicated NED candidate register of senior FTSE 100 and 250 executives to take forward as NED candidates. It also includes recently retired former main board directors.
We are thus fully engaged in our board practice assisting companies and executives with main board and senior executive appointments, drawing from our extensive contacts.
Please contact Guy Barnes or Andrew Davies for further information regarding our Board & Leadership Practice.
