The Value of NEDs

08 February 2023

Nick Graham set up our non-executive director (NED) register in 2007. Find out about the changes he has seen since then, and have a little a peek into his crystal ball.

Why was the register set up in the first instance?

“I was approached back in 2007 by the local branch of the IoD to see if I would be interested in setting up the register. The aim at the time was to improve the recruitment process for selecting board directors and to help address the issue of diversification of board composition. With years of specialist recruitment experience, OSA was an obvious choice. There was also a situation at the time where a very small number of NEDs held a very high number of board positions, raising the question around conflicts of interest and whether any individual could fulfil the role effectively when their time and resources were spread so thinly.

“I interviewed existing NED candidates as well as candidates interested in holding future NED positions and built a database of people with diverse skills sets, from different backgrounds and with a varied experience base.

How did the project develop?

“It was a slow start but the catalyst that led to the register’s success was a change in best corporate governance practice requiring boards to demonstrate an independent and robust recruitment process. We were in the perfect position to introduce them to new people they wouldn’t have previously known. One of their other options was to use an off-island recruitment firm but as well as a database of around 300 candidates, we also had invaluable knowledge of the local Guernsey recruitment market.

“The listed funds sector in a way has become the benchmark for best practice for NED recruitment and other companies have followed suit. More people began to recognise the real added value we can bring, helping them find new, highly-skilled individuals who can complement their existing board.”

Is it difficult finding the right candidates?

“No. Guernsey has an excellent pool of high calibre, qualified and experienced NEDs. The island boasts more chartered directors per capita than any other jurisdiction. Around 500 people have gone through the programme with GTA University Centre. This isn’t a prerequisite of becoming a NED but is a very positive reflection on the level of professionalism in the island. We are extremely lucky to have this resource to draw upon.”

How have things changed since the register was first set up?

“Back in 2007, the typical NED was male and 55 plus years; now the average age has dropped and our placements show a pretty even split between male and female candidates. Broadly speaking, candidates fall into two categories. Those who have a NED portfolio and are able to take on a new position, and those who are approaching the end of their executive career and who are looking for a new challenge and ways to use their years of experience to contribute to another company’s success.”

How do you see your NED recruitment service evolving?

“Guernsey has an extremely high number of small to medium-sized businesses. I am sure that most would benefit from appointing a NED to their board. Having an external, wholly independent person can bring new perspective to an operation. This is particularly relevant today when many businesses are still feeling the trail effects of Covid and lockdown. I believe that a growing number of companies - across all sectors of the local business community, not only finance - will see the value of drawing on the island’s incredible pool of talent that’s available.