Blog : BOARD TALK
|Posted on February 19, 2011 at 11:36 AM|
Excellent. At last, some of the spotlight is on the headhunters. Today's FT reports that the Davies Review- out next week - is demanding a voluntary best practice executive search code with regard to boardroom and other senior appointments. It 's about time.
While it's not fair to blame headhunters entirely - as they are the servants of the nominations committee and meant to be acting to a brief - they do have a lot to answer for. In particular, they often serve to spread what I would call 'disinformation' around this process.
In my years in the industry, I was always amazed by the fact that it is essentially unregulated. There are good headhunters, but essentially, as one who hired me put it - "it's not rocket science." There are large amounts of money to be made, and a great deal of it is made behind the cultivation of a 'mystique' which bears no relevance to the reality of the task at hand.
In the name of 'discretion', 'confidentiality' and just 'being frightfully important', many of the headhunters themselves reinforce exclusivity. In fact, I am willing to bet the use of the word 'agencies' in the FT headline will ruffle almost as many feathers among headhunters as the content of the piece. It will be amusing now to watch which search firms stand up to welcome the recommendations - Saxton Bampfylde appears to be one of the first.
It seems the Davies Review has indeed been thinking hard. While we are at it, let's hope we look at the idea of 'stress testing' our plc boards. A female NED was just telling me she could not understand why this is not taken seriously- except in sectors like oil and gas. "At the simplest level, it needs to be done to establish where the strengths lie, such as which board member would be best accompanying the CEO to the scene of a crisis" she says. BP and the Macondo well is a graphic example, but the potential need is there in every industry sector.
While regular board evaluation is now part of the corporate governance code, the very need for the Davies review suggests that sometimes boardrooms need to be given a hard push in the right direction. Otherwise people responsible - be they chairmen, board committees or headunters - tend to relegate what they do and do not do to practising a form of 'The Dark Arts' - possibly wondrous to behold but impossible to fathom without access to the spells employed.