FINALLY AN EXCITING task for the new non-exec, one he/she can truly contribute to: Finding a new chair.

After an exhausting beauty parade of various top headhunters, one is appointed, and a detailed specification provided for them. The spec is for an experienced chair with no ego (is that possible, I ask myself?), with time (but not too much), a challenging but empathetic style, strategic, with an appreciation of the day-to-day. In summary, Robo Chair.

Armed with this helpful aide the headhunters go forth into the wide world of known contacts to prepare their longlist—quickly and discreetly. With true disregard to GDPR, they return in good time with a longlist of people they are “sure will be interested, available and suitable for the role.” No, they haven’t spoken to them, “but we know them really well and…”

The shortlist

Our valiant new non-exec, armed with printed summaries of each candidate’s CV, plus headhunter evaluation, proceeds to the boardroom to consider with his colleagues the relative merits of each prospect, who didn’t even know they were interested in this job, and come up with a shortlist.

But “STOP!” cries the chief exec, “I want to understand the process first.” The senior independent director (SID), takes a deep breath and asks what part of the process the CEO is referring to. “Interviewing; I think it’s important I am involved early on, and the CFO too, by the way.” The SID tactfully agrees that it is important but, perhaps, not the first interview, and suggests we come back to it after the shortlist is agreed.

The headhunter talks through the first of 15 candidates. These include Frugal Fred from Scotland (might not choose the correct board dinner beverage) and then moves on to Golden Oldie, Hugh (might not live until dessert). Fiona the Fickle might distract the CEO, and Edward the ex-CFO might “out-CFO” our CFO.

To our relief, a candidate that no-one seems to know, or have a view about, comes up. He goes on the shortlist. Next we have an ex-Car Crash. That’s a “no” too, but the one from Dubious Governance gets a look in as he will have had great experience of difficult shareholders. Then a few more who are known and not known appear, and are added to a shortlist of five. The new non-exec is happy that he/she has been able to suggest that at least two out of the five should be gender-diverse.

The B list

Unfortunately, when the headhunter returns the following week, it appears that four out of the five are not available for various reasons (maybe they did not know them as well as they thought?) including both of the women, so back to another longlist. Exit headhunter to find the B list, and the SID sets about agreeing an interview process that is not run by the CEO.

On a serious note it is extremely difficult to judge whether a chair (or a non-exec) is any good because “good” is so subjective; subjective to the person providing the view and to the job context upon which the view is made. When one is recruiting an executive, a level of reliance can be placed on salary growth, previous job performance, and third-party references. All much more accessible than the “inside” of a boardroom environment.

Wouldn’t it be interesting if there were balanced scorecards for boards that attempted to evaluate “good”? I am thinking of such headings as meeting market expectations, governance, diversity, tax compliance, tenure, legal claims, gender pay gap, etc. To be concluded…

A word on NDAs

So, to another subject; a brief note on non-disclosure agreements (NDAs) that have recently been in the press. Please can I suggest that you have a conversation with your HR departments to understand under what circumstances NDAs are utilised with employees? Clearly there are the standard non-competes, confidential data, etc., that need to be covered, but where an agreement is broader than normal, commercial business information, then a higher level of sign-off should be required.

Although there are whistleblowing policies in place they are not very effective if employees are effectively gagged by signing compromise agreements in return for small and/or large financial settlements that they may, or may not, have been entitled to anyway. This is an area for a good remco chair to be aware of.

The Secret Ned is a British board director with 30 years’ experience on the boards of the FTSE 250, small-cap companies and private, family-owned businesses.