With European Commission statistics showing only marginal growth in female board representation in recent years, the EY report Time for Change: Recruiting for Europe’s Boardrooms – based on interviews with board members, headhunters, business leaders and advocates of corporate governance throughout Europe - exposes current barriers and highlights the need for fresh, innovative thinking in the process of making appointments.
It reveals the dangers inherent in “groupthink” at the top of businesses and of the need for businesses to better understand and reflect customers’ wishes.
Five practical steps are identified in the report to improve boardroom recruitment:
Realign the composition of the board with the evolving needs of the business, looking at issues such as numbers and profile of non-executive directors, duration of service and sector-specific needs. Consider rotating non-executive directors regularly and appointing individuals with a wider range of skills. This can help open up the board’s approach to managing changes effectively and sharpen its awareness of future developments.
Investigate ways of using headhunters more effectively, such as rotating recruitment firms and separating evaluation from search. Also consider hiring headhunters who represent the candidate, rather than the client. Advertise for boardroom posts, or use the growing number of databases to identify candidates who could bring new perspectives to the board.
In order to create a larger pool of potential candidates, abandon the requirement that candidates “must have experience of a PLC board.” Instead, widen the search to include those with analytical skills, independence of thinking and a capacity to support as well as challenge.
Make a succession plan and keep it transparent. Then, in order to create a high-quality pipeline of talent, provide training for would-be non-executive directors by placing them on committees just below board level.
Consider large cross-border businesses to collaborate in the creation of a “board secretariat” to provide support for all non-executive directors, in terms of resources as well as opportunities. Such an organization could potentially provide training for those who aspire to be non-executive directors, with their employers recommending them for participation in suitable courses. This is a radical idea, and one that would undoubtedly prove challenging to implement – but it may be one whose time has come.
Organizations need to fully realize the benefits that come from engaging a more diverse range of individuals at the top. Change is moving at a sluggish pace at best throughout Europe. We hope this report goes a long way to stimulate debate further and help organizations ensure best representation and composition so they achieve competitive advantage.
“It is nowadays more broadly accepted that, although unconscious bias exists, the “glass ceiling” might actually be more of a self-assumed “glass cage”. Reality is women do face more challenges than men in getting to leadership positions. The most important thing for me was to accept failure risk (more difficult in a downturn economy) and to know how to advocate own values. I believe that women that reached a leadership position embraced the idea that “People are capable of more than they think” (Lao Tsu) and often offer to the respective organization a breath of fresh, innovative ideas”, says Miruna Enache, Tax Partner, EY Romania.
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EY is one of the world's leading professional services firms with approximately 175,000 employees in 728 offices across 150 countries, and revenues of approximately $25.8 billion in 2013. Our network is the most integrated at global level and its vast resources allow us to help our clients benefit from every opportunity. In Romania, EY has been a leader on the professional services market since its set up in 1992. Our over 450 employees in Romania and Moldova provide seamless assurance, tax, transactions, and advisory services to clients ranging from multinationals to local companies. Our offices are based in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau. From 1 July 2013, Ernst & Young becomes EY, the logo has been modified in response to this change and the company's new tagline becomes "Building a better working world". The new visual identity reflects the new strategy of EY, Vision 2020. For more information, please visit www.ey.com.