Wednesday, 8 October 2014

Critical Friends: Why academics make great NEDs ?

NED's (Non-Executive Directors) play an important governance oversight role acting as 'critical friends' within a board of directors (& sub-committees), offering strategic external perspectives and fulfilling a key role in board level oversight, ethics and remuneration.  

Having reached the C-suite there appears to be some value attached to the networking and experience that can be gained from taking on one of these 10 to 20 days-a-year roles.  NED positions additionally under pin an increasingly popular 'portfolio career' concept for well rounded and networked silver backs.  

O'Brien "Business School Academics 

can make great NEDs"

Many of my peers who remained in industry are at a point in their career when they are looking to broaden their CV and take on a NED role or two.  The entry point that is often recommended is to find a position in a charity or not-for-profit, who often welcome the business experience and contacts in a sector that is leaning more heavily on commercial business approaches. Leading blue chip companies might look for both extensive NED experience and a complimentary functional skill set that augments their board e.g. mergers, finance, politics and governance.

Mr Steele quoted in the FT noted that a NED "must be skilled in corporate governance, change management, remuneration policy, strategy development, finance and accounting, leadership, the law, corporate governance, and about 15 other things ... and have the personal skills of a saint....Risk: potentially enormous; pay and benefits: negligible."

I argue that more businesses need academic NEDs and here is why;

  • Freedom of speech is enshrined in university lecturer contracts, they are comfortable speaking frankly and directly without undue fear of reprisal.  Career changers are often surprised at the directness that can be used in non-adversarial collaegue exchanges, seen as either rude or grounds for a swift and unplanned career change in a plc, academics do not easily kowtow to authority. 

  • Many academic contracts allow for, or indeed actively encourage, 30 to 50 days of consultancy, which is seen as offering opportunities to develop professional practise that benefits business school teaching and research activity.  Whilst term time teaching is sacrosanct academics are afforded considerable flexibility on how they manage their non-teaching time, which can be three days each week.   

  • The UN Principles of Responsible Management Education (PRME) sees leading academic institutions well versed in ensuring appropriate engagement with corporate sustainability and social responsibility.  Questioning accepted behaviours using an ethical lens is often second nature to academic minds, where much of the work can have intricate layers of individual and organisational complexity.  

  • Charged with delivering to a diverse range of stakeholder objectives, academics are increasingly tasked with carrying out professional managerial roles in departments and Universities that operate in an ever more dynamic marketplace, under stringent moral, political and financial controls that necessitate a 'balanced books approach' every year end.  

Thus objectivity, a strong ethical compass and preparedness to speak out are often strongly enshrined in the academic experience set. And whilst beatification is rare for Higher Education professionals, the challenges of motivating millennial 'fresh minds' stuck in an iPad and coping the multi-farious conflictions of the public sector on a paltry salary, probably makes business school academics more qualified for NED roles than you might at first have thought.