“Conservative” recruitment to non-executive roles is no longer appropriate and pay levels may need to be revised as the demands of the work increases, according to experts from the Institute of Directors (IoD) appearing on Governance Watch, the Board Agenda podcast.

Baroness Natalie Evans and Prof Irene-Marie Esser were speaking about their work on a report from the (IoD) examining whether the current conception of non-executives is fit for purpose.

Esser, professor of corporate law at the University of Glasgow, says: “In this report we really argue that conservative board recruitment is no longer appropriate in this specific context; specifically in a context where the way boards operate has fundamentally changed, becoming more complex, fast-moving and uncertain.

“Requiring NEDs primarily from traditional, well-trodden backgrounds risks reinforcing…groupthink and limiting the board’s ability to challenge assumptions or anticipate emerging risks.”

The IoD report highlights the need for the non-executive role to be “rewired” and the notion of independence rethought so that it is not only about conflicts of interest but includes “independence of mind”.

The report calls for non-executives to demonstrate more “courage and commitment” and bring “greater energy and curiosity to the role”.

Baroness Evans, chair of the report’s IoD commissioners, a non executive director and former Leader of the House of Lords, suggested the structure of NED work would have to shift.

She said often non-executives have a “transactional involvement” with their companies in which they read huge board packs and then attend periodic meetings.

But what the IoD suggests is that non-executives will move to a “more continuous involvement,” that could lead to a position where not all issues need to be on the table at board meetings because the board has already reached an understanding outside the formal setting of the boardroom.

For Baroness Evans that also means there may have to be a fresh look at pay levels for non-executives.

“Companies need to look, and boards need to look, at what they’re asking their non-execs to do,” she said.

Pay may be “fine” in some sectors and some companies, “but I don’t think that’s across the board.”

She added: “We felt it was for companies and organisation to really think about what attracts the best talent.

“We all know you have to pay for it in this increasingly complex world.”

The podcast is brought to you in association with  Nasdaq Governance Solutions.

You can listen to the full episode on Spotify, on Apple and on all major podcast platforms. You can also access the full podcast here.