We meet lots of CEOs, CFOs and other senior executives who are starting to think about a plural career. You might want a future as a NED on a couple of boards or even a chairmanship, but when is the right time to launch a plural career and crucially what steps should you take along the way?
In this piece, we speak to three of our senior partners about how to launch a successful plural career. Between them, they have more than fifty years’ experience in recruiting senior executives and Board level directors for large listed businesses and PE backed private businesses and have helped many executives follow the path to a plural portfolio career.

You will need to work hard for that first board appointment!

A plural career with a couple of major board appointments – perhaps including a not-for-profit board – sounds very appealing to many people planning post-executive life.  For the vast majority of aspiring non-executive directors, the reality is a little harsher.  In fact, there is no easy ride onto that first board.  Even if you think you are very well qualified to make a positive contribution, you will soon encounter hurdles.

Be realistic: there are far fewer good board positions available than there are candidates.  Our analysis of the 2017 appointments to the FTSE 100 and FTSE 250 boards shows clearly what you are up against.  Some key findings include:

  • The FTSE 100 made 93 new appointments of which 44 (47%) were British nationals (26 male and 18 female). This reflects the heavy international composition of the FTSE 100.
  • Of the 44 British nationals appointed to the FTSE 100, only 13 had not previously sat on the equivalent of the FTSE 100 board and many of those enjoyed a particular rationale for their appointment. For example, Dame Judy Anne Macgregor, who was appointed to the board of Fresnillo Plc., the Mexican precious metals mining company, was previously the UK Ambassador to Mexico and Fresnillo has traditionally only had one British Non-Executive Director.
  •  The FTSE 250 made 203 new appointments, of which 141 (69%) were British nationals (88 males, 53 females).
  • Of the 141 British nationals appointed to the FTSE 250, only 55 had not previously sat on the equivalent of a FTSE 100 or FTSE 250 board.

Previous board experience:  As you can see from the above analysis, by far the majority of the appointments at the FTSE 100 and FTSE 250 boards are people who are already sitting on equivalent level boards.  This is true at the FTSE 100 level where 30% of the British appointments to those boards in 2017 were first time board members and the FTSE 250 (39%).  Almost every mandate for a board search has a strong preference for “previous Plc board experience”.  Breaking into the “club” is difficult.

Committee experience:  Most board searches are directed at particular competencies, such as industry or customer sector experience, sales, financial/banking, etc., and there is little scope these days for generalists. Further, many board searches are focused on fulfilling certain committee roles.  In particular, the Audit Committee chairman and, perhaps less often, the Remuneration Committee chairman, can be the sole objective of the search and experience and qualifications for these roles can be a very exacting.

Executive experience:  Successful CEOs and CFOs of major listed companies rarely find it difficult to find good board roles.  In addition to their track record in running big businesses, they will already be well known to investors and as they are generally executive directors on the boards of their companies, they are already well experienced in board room procedures and dramas. Indeed, such people often have the luxury of being selective about which boards to join.  Pretty much everyone else has to work for their first appointment.

Diversity: There is enormous pressure on companies to ensure they can demonstrate diversity on their boards and most particularly gender diversity.  Our analysis of the 2017 FTSE 100 AND FTSE 250 board appointments, shows that just over one third (38%) of the British nationals appointed to these boards were female. However, it is interesting that 61.5% of the first timers appointed to the FTSE 100 boards were female, whilst for the FTSE 250, it was only 35%.

It is now widely accepted that boards must have diversity of thought amongst their members (to avoid “group-think”) and the starting point has been the heavy emphasis on gender diversity (the “Women on Boards – Davies Review” in 2015, etc.) and, more recently, ethnic diversity (the “Ethnic Diversity of UK boards: the Parker Review” of 2016, etc.).  For good reason, there has been a positive bias in favour of such diversity, and probably more to come.  This can be a major hurdle if you are a white, 60 years old and male!

Networking:  For the aspirant non-executive director, a scientific approach to networking is very important.  This is at least as important if not more important than building relationships with the relevant executive search firms.  For example, if you are retiring from a career in professional services, your last couple of years should be spent becoming an indispensable trusted advisor to the chairmen of your targeted boards.  More generally, identify the chairmen and board members you know well and ensure you tell them directly that you are now looking for appropriate board roles and remind them of what you have to contribute.  The number of times a mandate to a search firm is accompanied by “and we would like you to consider these two candidates who have been recommended” will surprise many.  In your executive career you will have hopefully built those networks and dedicated time participation in a broader range of business related organisations, charities, etc.

Plan ahead and act now to build a future plural portfolio 

Since I have been in board recruiting, I have met with many individuals who either are or aspire to be non-executive directors. One thing that has always struck me is that in order to end up with an ideal mix of pluralist positions, there is a huge benefit to be had from some careful planning. As my colleagues will attest, getting roles where you can contribute and also where you can gain some valuable additional experience is not easy and will require a considerable amount of research and networking.

Plan ahead: There is significant benefit to be had by deciding what the ideal portfolio may consist of when you start looking.  Perhaps, one public company board, one substantial private company, one start-up and one charity/ not for profit.  It normally pays to secure the public company role first as an ‘anchor’ position and then to fit the other NED positions around the demands of this role. The benefit of public company boards is that the time commitment is usually well defined, and meetings are planned years in advance. With smaller or private organisations, the time commitment can often be much less predictable and meeting dates change all the time. That being said, public board positions will typically be the most difficult to obtain due to the imbalance between vacant positions and candidates willing to be considered.

Whilst many Board roles come through head-hunters (particularly in the public company space) many do not, and you will need to rely on your own network to make yourself aware of these.

Act while as an executive: Most public companies prefer board candidates that have previous experience as an NED on another public company board. As a minimum they typically would only consider someone with some previous Board experience in an organisation of similar complexity.  If you are considering moving from an executive career into the pluralist environment, you may therefore want to consider taking on one NED position as soon as possible, and certainly whilst you are still in a full-time executive role. Allowing executives to take on one NED role is something that is considered acceptable by most employers and may even be seen as advantageous if some of the experience gained in the non-executive role was useful to your main employer.  When you then come to making the switch to the pluralist life, you will be better placed.

My advice to those wanting to embark on a pluralist career is to plan carefully and start the process early.  Consider taking on a single NED position at least three to four years before you plan to switch to portfolio life.  Build your network with headhunters and industry contacts while you are still in full time work rather than starting the process when you step down.

Consider a plural career path via Interim 

Consider Interim as a path to NED: Many executives heading towards a Plural career path should strongly consider and opt for senior Interim roles as a conduit to their NED/Chairman goals. We have seen an increasing trend of CEOs, COOs and CFOs bolstering their credentials with Interim and Consultancy roles prior to going Plural full time. Whilst it is perfectly normal and, in some ways, expected for individuals to have a NED role alongside their permanent role, it’s not so easy to have more than one. The Interim route allows you to keep a hands-on focus whilst developing your NED skills with one or two roles before switching to a plural career. It’s not unusual for an Interim role to turn into a NED role at the end of the assignment for continuity purposes.

Focus on strategic or transformation type assignments: A typical Interim assignment can last from six to fifteen months, and as much as twenty-four months in large transformations. If your Interim role is around strategy, transformation or turnaround, I’d suggest you have a greater chance of the client wanting you to stay connected with the company after the initial work is completed. If you are looking to start your Plural career this way, I’d suggest avoiding the short term quick fix roles and gap management without serious business agendas.

Look for businesses that match your background: Initially businesses that suit your immediate skill set will be attractive for all parties or neighbouring industries that haven’t yet been through the same level of transformation that your sector has. Once you’re starting to establish yourself as an NED we’d recommend sectors that don’t compete and conflict with your current workload but could certainly benefit from your skills on a scenario basis such as M&A, nearshoring, outsourcing or getting the best relationship with an investment partner.

Try and get FTSE board experience: From the experience of watching and helping people move from Executive positions, through Interim into a Plural career, without exception they would have sat on the Board of a FTSE or similar size business or on the Board of an Investor backed portfolio company. In highest demand in the current climate for my client base is the individuals who’ve come from a sustained growth platform or from companies that have genuinely pioneered. Companies with a reputation of good governance that matches performance will always be of interest. As much as anything though, the character of the individual and their ability to listen, understand and challenge as a NED is essential. The transition from Executive to Non-Executive can be a painful one that some people can’t bridge.

PE houses will often source from within: If you are looking to base your Plural career around Investor backed portfolio companies, be mindful that the large majority of the NEDs will come from the investment house themselves, they often don’t see the need for external hires. When going externally these roles will mostly be hired by people who have been known to them or come from strong recommendations from a trusted partner. This is in contrast to hiring NEDs into a listed business. Being successful within Investor backed companies takes time to build the relationships and should be seen as medium to long term strategy so don’t put off the networking, start early.

Final thoughts

There will likely be changes to the UK board environment in the near future.  The very high-profile collapse of Carillion and other examples of corporate failure, coupled with the general underperformance of the FTSE 100 (in terms of shareholder returns) over the last 20 years, are putting the performance of boards, and the directors individually, clearly in the eye of the politicians, regulators, and investors.  The qualifications of non-executive directors, including their personal competencies for the particular roles, will attract increasing scrutiny in the future.  This will be true across the FTSE 100, 250, 350 and the big privately held companies. While this may open the door to more first-time appointments, there may be even more challenge to the qualifications of those candidates.

Be realistic with your expectations, consider what paths area available to you to bolster your experience (e.g. Interim), be prepared to work hard and get networking.

Subscribe to receive actionable leadership insights to your inbox