Have you ever considered becoming a non executive director? Not sure what it involves, or how to make it happen? On this week’s show we talk to Anne Watson. Anne is one of the UK’s leading experts on becoming a Non Executive Director, and she gives us a great insight into the do’s and dont’s of becoming a non executive director.
Anne’s career to date.
Anne claims to have lived a long time! Her first tip for having a successful career is longevity! Her starting point was as a head-hunter for 30 years. She was highly motivated to join the head hunting profession, because her husband and Anne had just bought a house and the mortgage rate rocketed, if you recall, in 1981. There is nothing quite like a rocketing mortgage rate to make you feel like you want to be a working mother!
Anne ran a business and sold it to a PLC in 1998. This was very liberating. The sale meant she had made a lot of money, which allowed Anne to do lots of exciting things. Anne wrote a few books, she lived in Belgium for a while, she developed a few women’s networks. Her clients also kept coming back saying do a bit more work for them too.
One of these clients offered her a role. She became this clients’ Global HR Director. Anne cunningly and instantly hired a qualified HR Manager. “to save her from running the business off a cliff and causing problems”. She had the most wonderful time. It was a global organisation, with factories in China, Mexico, Hungary and East Kilbride, along with design centres all over the world. She developed an e-learning platform for them so that people were connected.
The business was sold, as it was private equity backed. During that time, Anne learned as much about how people manage at board level as she did about how to motivate, develop and manage a workforce of 2,000 people of 14 different nationalities.
For Anne, the most intriguing bit was watching what happened at Board level. This segued to her current role at In Touch Networks.
What should we all be mindful of when selecting people? It has got a lot more difficult. The internet. Now, when candidates are in front of Anne they are significantly more polished than they used to be. They have a lot more knowledge about how to answer difficult questions, how to present yourself properly.
But, that isn’t what you want as a recruiter, because the candidate has a lot of qualifications, lots of success, ticks against the right attributes etc. What you REALLY want to know is how are you going to behave when you are inside my business.
Therefore, it is all about behaviour. Anne’s best tip for anyone recruiting somebody is yes, to go through all the competency based questions, but then have a cunning array of questions that will indicate to you:
- How do people respond under pressure?
- Are they ready to share and help?
- How collaborative are they?
- What are they like in terms of their decision making?
These questions will help you figure out whether they are likely to succeed for you and whether they will be liked.
Anne likes to have a scenario.
She’ll say… ’Picture this, and then lay out a scenario…’
- What do you do?
- What steps do you take?
Watch out for those who are calm under pressure. Emotion tends to step into the way of logical thinking. So how do you quickly respond?
Give them a question where the candidate feels a bit of the pressure. It’s slightly artificial, but it is better than saying tell me how you respond to pressure.
The Operational Assessor training designed for interviewing new people joining The Post Office mirrored Anne’s scenario approach by looking for
- Intellectual Application – the breadth of thinking through the scenario
- Imagination – the degree to which they founded new ideas to resolve the scenario and
- Practical Judgment – the way a candidate chooses between two alternatives.
Often, people in recruiting are lazy. There is pressure to field suitably qualified candidates in a short amount of time. The accent becomes highlighting all the reasons why the candidates presented to a business are right for this role.
Selling her business in the late 90s.
People told them in 98 that they were mad. It was a great lifestyle business. They employed about 35 people, and the office was a mile from her house. Her business partner was keen to sell. She agreed. It was the right thing to do. She sold at absolutely the right time.
What should we learn?
Nothing is forever. Have you had a great run? Have you an opportunity to move on? Well, change is good. Don’t be focused on the negative. So many of the people grow as individuals, greater confidence and self-belief etc. Fortune favours the brave.
What was the one stand out moment, when she sold out to the PLC? If she hadn’t done it what would have happened? She could have lost everything they had gained. Money is liberating. She wouldn’t have been able to do new invigorating things in her career.
When she first started HK was a British Colony. With WorldMark, a technology business, they had factories throughout China. What were the cultural things learnt?
- Going to a hospital at midnight because 2 of her workers had gone out on their e-bike and had a terrible crash. The ambulance took them to hospital, and they were lying on the stretcher in their equivalent of A&E, and no-one would treat them, because they didn’t have a credit card! Anne went to the hospital with a credit card to get them treated.
- Anne looked at the dormitories that their workers were in. She changed those immediately. She looked and said would I want my daughter living here?
- The factories are changing, from rows and rows of predominantly ladies, in blue coats and white hair nets, sitting on stools and moving little things along. Now it is all automated.
Worldmark has given Anne a huge insight into high-technology manufacturing (stuff for mobile devices), but she has always had a focus on people.
She has a unique perspective of people and people on the Board.
Sitting in a board room is a fascinating experience. You think it is all about the agenda, making the right decisions for the business and you know it is about corporate governance, delivering value to shareholders. You have all of these high-minded objectives as you walk through the door.
And when you get in, you realise it is ALL about personalities and behaviour.
What would trip the business up? It’s very unlikely that it is some major technical glitch. Generally, it is because of people falling out or being at loggerheads and because of those personality conflicts.
The reason Anne became so interested in the role of Non-Executive Director, is because Anne sees that person as the one who is in charge of manging behaviour in the boardroom. Having the influence to ensure that people are doing the right thing.
What makes a good Non-Executive Director?
There is such a thing as an effective NED. In discussions with others, one person said what you really need is a real ALPHA MALE! Get in there and sort things out. The effective NED is the one who clearly understands the divisions of the roles and the behaviours that are associated with an executive. They understand that those are NOT generally associated with a NED.
It is that ability to listen and NOT talking over people.
Kevin made the point that the CEO invariably is an Alpha Male/Female. The NED is all about asking questions without causing a riot. “So, when you say that Kevin, what exactly is it that you mean?” “Does it also include this other perspective?”. It’s about asking questions to force people to think in a different way.
A NED has an equal responsibility and shares the same legal duties and liabilities as does an executive director on the board. It’s a real responsibility. There is risk here.
As a NED, you must ensure that corner cutting is challenged otherwise you are in effect signing up to the results of the same strategy.
Professional Indemnity Insurance and NED
The view is the NED should go PAYE with the organisation. The first thing they should do BEFORE signing to be a NED, is to get the company to show you the directors and officers liability insurance. To make sure you are covered by that insurance. And every year you ask to see the certificate. Since when a business goes through tough times, once of the first things to go is insurance.
International Petroleum: https://www.hcrlaw.com/blog/non-executive-directors-held-personally-liable-1-75m-dismissing-ceo-whistleblowing/
Anne suggest relying on your own professional indemnity. £1m of personal indemnity would have left a large gap in the case of the NEDs on International Petroleum.
There are a good number of NED roles that are unpaid. But the responsibilities are exactly the same. Make sure the organisation carries the insurance. The quality of the decision making doesn’t rely upon how much you are being paid. Make sure you are covered.
What should you be thinking about when becoming a non executive director?
- Don’t do it unless you are sure you know everything about them, and are in-tune with their culture and values.
- Carry out your own due diligence. As if you were preparing to BUY IT, never mind work for it.
- Meet everyone on the board.
- Go way beyond just looking at their website. See the minutes of their board meetings for the last 12 months.
- Go onto LinkedIn and speak to people you know who have been employees, customers or suppliers of that organisation.
- Look at Trust Pilot to see what their reputation is like.
- Look at Glass Door, knowing you’ll get bad news!
People who agitate to get themselves a board position through working with shareholders. They get in to the company and find out what the breaches of compliance have been, where things have gone wrong. They are often truly aggressive.
Anne says THINK like a board activist. So, when you go in the door, you are confident that it is the right environment for you.
Guiding decision making
Look for where they are doing well and where they aren’t. LOOK FOR THEIR BLIND SPOT. Make sure you highlighted that within the meeting.
e.g. are they ready for GDPR?
What is the commitment of the NED?
Becoming a non executive director isn’t just about attending board meetings. Most organisations will have 10 board meeting per year. Then there is the board papers. Half a day. Phone calls with CEO, chairman. Just passing, catch up.
No one wants you dropping in.
20 days per year. 10 board meetings, 10 preparatory days.
So maybe it is about one month of your year.
You must work smartly.
You cannot expect to super-impose your style on their business. Be the guy who brings cohesion, intelligence.
- At the bottom is financial reward.
- Being inside somebody-else’s world
- An intellectual challenge
- Nice to get the feedback on your input
- Helping people do better.
Who inspired you?
Her father. A remarkable man. An exuberant character, who encouraged all four of his children. He was a painter and decorator. Undeterred by anything in life.
She also learnt from a mentor, at an executive search firm. She attended a client meeting with him. Afterwards, he asked her (much junior to him) opinion of his performance in the meeting. Once received. He provided Anne with feedback. She learnt then that feedback is critical to improvement.
In the next 100 days, if you are interested in becoming a non executive director, what do you do?
- Your CV reflects your skills as a NED.
- A process of self-awareness to understand what you’d add to aboard.
- Develop a network of like-minded people, find those events. It’s about a change and transition.
- Understand what it is you have to offer and how you present it and a community of people who are really supportive is important.
The Next 100 Days Podcast recommends you search out In Touch.
They are based in Manchester and soon London and New York. Still thinking about becoming a non executive director? It’s a great place to start.
It is a paid-membership business. For people who are changing career. For people who say, I want to develop a portfolio career. Either they are fed up of being an executive and want a different lifestyle. Or they have retired and are seeking more from life. Or their job was made redundant and they are facing choices about what they can do differently.
In Touch is all website based. They source lots of NED, consultancy and women director roles. They source and find roles for their members.
Anne was passionate about equipping individuals with the right skills. Such a CV writing, full events calendar and video course on learning about NED, development programmes.
Helping people move onto the next stage in their career.
Anne – the Author
The Book of Luck – Heather Summers & Anne Watson
- Defined the attributes of successful/lucky people are.
The Book of Happiness – Heather Summers & Anne Watson
The Definitive Job Book – Anne Watson
How to Succeed with NLP – Anne Watson
Her latest book is all about cross-cultural working. All about dealing with other cultures. It’s all about a flexibility of style and a different way of communicating.
The Next 100 Days Podcast is brought to you by Graham Arrowsmith and Kevin Appleby