No sign of boardroom shake-up

The expected shake-up of UK boardrooms has failed to materialise with boards of directors remaining conformist and conservative and the role of non-executive directors remaining unclear, research warns.

In 2003, Sir Derek Higgs’ report into corporate governance called for increased scrutiny into the role and purpose of boards, following corporate scandals, such as Enron and WorldCom.

The report said non-executive directors should be scrutinising and judging board strategy and performance, but research from Roffey Park and HR consultancy Cedar International says these changes are failing to materialise.

“Our study has highlighted how boards are becoming overly risk-averse with an emphasis on box-ticking style compliance rather than embracing diversity and utilising non-executive directors from a range of different backgrounds,” said Linda Holbeche, head of research at Roffey Park.

The study, based on interviews with chief executives, chairmen, board directors, non-executive directors of listed companies, trainers and recruitment experts, reveals that there is little desire in UK boardrooms to alter the status quo.

Further, the study suggests that board selection is frequently a closed shop with non-executive directors drawn from listed public companies and, therefore, likely to embrace a conservative approach to boardroom debate. Also, little help is provided to help non-executive directors develop and make a significant impact.

“The non-executive director can play an important and beneficial role in business strategy and development, yet there is still a lack of clarity about what the role is but the perception exists that the task is becoming increasingly onerous,” said John Gilkes, chief executive of Roffey Park..

“This, combined with boards preference to seek known candidates who will value unity, is discouraging potential non-executive directors.”

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