Review recommends role for HR on boards

HR could find it easier to gain a seat in the boardroom after an independent
review highlighted the key role senior members of the profession can play as
non-executive directors.

Derek Higgs’ review into the role of non-executive directors, commissioned
to try to prevent an Enron-type scandal, is calling for firms to recruit HR
professionals as non-executive board members to improve diversity.

The review noted that one of the reasons boardrooms remain dominated by middle-aged
white males is that areas where women are more strongly represented, such as HR
and change management, are not regarded as traditional routes to the top table.

Former investment banker Higgs called on boards to draw more actively from
these groups, particularly individuals just below board level in non-competitor
companies.

HR’s role is also likely to achieve greater prominence as a result of
recommendations by Higgs for non-executive directors to be appraised on an
annual basis and to receive specific training in their role.

CIPD director general, Geoff Armstrong, welcomed Higgs’ recommendation for
increased recruitment of senior HR professionals to non-executive positions.

"There is a vast pool of talent within the HR profession," he
said. "Such individuals would bring a new dimension to the non-executive
role and ensure that an organisation’s key driver of value – namely its people
– is taken seriously at board level."

The report challenges the ‘old boy network’, which has allowed company directors
to appoint friends and colleagues.

The review’s recommendations could be adopted as early as July.

www.dti.gov.uk

By Ben Willmott

Higgs recommends:

– A more open and fair appointment procedure

– Greater emphasis on independence

– Better training

– Guidance on remuneration

– Annual performance review

– Reasons for resignations to be circulated to all board members

– Half of board directors to be non-executive  

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