Becoming an iNED
Cameron Marr talks to Justin Whitehouse, Director of Banking at Interim Partners about the role of an independent Non-Executive Director (or iNED).
What made you want to become a NED?
I had left my previous employer after 16 successful years. I had enjoyed a number of successful business directions there ranging from building new and successful international businesses, managing established operations, restructuring, closing and selling a portfolio of businesses during the Global Financial Crisis and building a risk management function from scratch for a troubled Irish bank in the heart of the Irish financial crisis. All of these had equipped me with a wide range and considerable depth of executive skills. When I left the bank, I spent some time thinking about where my career, at that stage I was in my early 50s, should go. I decided initially to pursue a career as an interim manager and risk consultant. This led to me becoming the CEO of a Bank in the City of London where I led what I believe was the first (and only?) orderly wind-down of a bank in the UK, under the overview of the UK Regulators.
This experience, of acting as the CEO of a Bank where my role was to close down the majority of the business whilst transitioning some small and profitable parts into new stand alone businesses, really brought me to the hard coal face of board management. The Board I joined and worked with was small but focused and committed to the task that lay ahead, even though it was ultimately to the detriment of their positions.
I evidenced personal and professional integrity in action and learnt a lot about how to manage a board in such challenged circumstances. In all the aspects of the role, it was working with my Board colleagues that I found the most satisfying. I worked to recruit the board to succeed the established board and evidenced the difficulties of transferring responsibilities and the benefits and detriments of direct shareholder intervention. I evidenced at first hand the impact of the senior managers’ regime and what a Director’s responsibilities really are when faced with such drastic business evolution.
I had worked at Board level for a number of years and evidenced good practice, poor practice and the indifference that many boards took toward the businesses they were supposed to look after. This final experience in an executive role left me feeling that I could contribute significantly, through my experience, perspective and attitude to some businesses at board level.
It was whilst undertaking the role of CEO that I was approached to consider an iNED role with a London based Bank. It was that approach that finally turned my mind to thinking about a portfolio career.
I had spent over 30 years in banking, built a successful career, had travelled very widely, undertaken a host of different types of transactions in over 35 countries and established and led successful businesses and initiatives. I could have continued with that course. On the other hand I had recently remarried, started a new family (that I wanted to experience and enjoy this time round) and wondered what new challenges another executive role could really offer me. As an ‘ex’ - global team head, country head, Group PMO head, CRO and CEO it was hard to envisage an executive role that would offer new and satisfying opportunities.
A successful portfolio career was attractive because it would allow me to determine (through the number of roles I decided to take up) the amount of time I would dedicate to working in the business environment, maintain a perspective across a number of businesses, contribute constructively to those businesses over time, apply my accumulated skills and experience and work with colleagues operating at the top level of their game. I believed that I had the basic tools for the job, in terms of board experience, operational knowledge and strategic perspective. A portfolio career was a way to continue operating in a business I knew well and enjoyed but from a new perspective.
What advice would you give to prospective NEDs looking to move into a plural career?
- Consider why you want to do it. It can be very fulfilling but carries a lot of accountability, reputational risk and it is a position of influence and guidance rather than instruction and direction.
- It will take a long time to build your portfolio. Putting yourself in the way of opportunities takes considerable effort and the process is slow. Expect roles to take between 6 to 12 months from identification to appointment.
- Think, realistically, about what you actually bring to the table. Create a very clearly focused statement of your value.
- Revise your CV. The iNED CV reads very differently from the executive CV. The role is very different, it is one of influence, guidance, listening and discussing rather than doing.
- It is almost impossible to be an iNED in a financial services company and continue with an executive role. The days of just turning up at the board meetings quarterly and the occasional AGM, EGM etc are long gone. You will contract for a certain number of days for each role. Expect to spend at least twice that in your first few years as you learn the role, the businesses and achieve the knowledge and experience to become effective.
- Network – more than you feel comfortable with, and on every possible occasion.
- Become your own ‘training and development’ manager.
- Find a mentor and/or business coach. The world of the boardroom is very different from the executive world and anyone who can guide you in what is, in effect, a new career, is to be valued.
Did you find it hard to secure your first role?
- My first role came about when I was referred to the headhunter handling the role by a friend and ex-colleague who had initially been approached for the position.
- Interviews for iNED positions are very different from those for executive roles reflecting that the role is one of governance, oversight, influence and guidance rather than actually ‘doing’ and executing within the business.
- I researched the company very carefully and tapped my network to find out everything I could about the company, its operations, its challenges and its ownership structure.
- Following my initial interview, the process went silent and I heard nothing for 3 or so months. I have discovered that this is very usual for these roles.
- Whilst my executive board experience, together with my non-exec experience on subsidiary boards also played a part. I think that my experiences in the areas of risk, governance, regulatory liaison and compliance were the key things that carried me through.
- Subsequent interviews were held with both executives of the firm (specifically the CEO) and a mixture of established non-execs, parent company board representatives and the chairman. Recognising the different perspectives of the various interviewers was important and tests my skills of interpretation and diplomacy. I have found that it is essential to remain consistent and honest in your own presentation. All of these people will be part of the ‘team’ that you are looking to join, the interview process is a good chance for you to review them both individually and as a collective to see how well you will fit.
- Eventually, and after what felt like protracted behind the scenes consideration, I was pleased to be offered the role.
What lessons did you learn?
- There will be a large number of stakeholders involved, each with their own perspectives, focus and time frames and these need to be aligned at each stage before progress can be made.
- There is some etiquette involved – you can convey enthusiasm but not hunger for the position being discussed. It is often not appropriate to follow up too enthusiastically with the people handling the recruitment – they will come back to you once the stakeholders involved have deliberated and aligned their thoughts. This can be weeks, if not months. Such timeframes are entirely normal.
- You have to have patience if you are to go down this route.
- You also have to be careful to pace your applications and opportunities as best you can.
- You need to identify, acknowledge and manage conflicts between roles and opportunities.
- You need resilience. You will need to invest considerably of yourself to elicit the opportunities.
- You will need to invest considerably in each process and be prepared for potential disappointment (for one role I had 8 formal interviews and a number of phone calls over a 5 month period, spread over a number of countries and locations – despite positive feedback throughout I failed to land the role due to a shift in strategy by the company owner). During the process I had decided to decline some other opportunities due to potential conflicts.
- The interview process is very much a two-way process through which you should do your initial due diligence on the company. It is your chance to ask the difficult questions, achieve a better insight into the company (see behind the curtain of its public image), review its operations, ambition and challenges and determine if the dynamics of the board are such that you will be able to contribute as you intend.
- Headhunters who handle Board roles, are very difficult to get in front of. There are a large number of people looking to move into the NED market and headhunters are overwhelmed with possible candidates. Given that you will have no track record or reputation at the outset you will need to use your network to achieve the necessary introductions.
What would you have done differently?
- I would have managed my expectations better throughout the process. I expected too much to happen too quickly. When it didn’t I became discouraged. However, this was mitigated by the use of a business coach and a couple of excellent mentors.
- I would have liked to have spread out the opportunities more evenly (they tend to come along, like buses, in groups). However, as the opportunities arise through the effort put in, and you have no control over when the opportunities will arise, this is a bit of a vain hope.
Moving from Exec to NED, what are the biggest differences you have found?
- You are semi-detached from the action and activity of the company. Your role is to advise and guide not to ‘do’.
- Your information flows are determined by the executive.
- You really need to be willing to read large amounts of information in a relatively short time frame and read between the lines, identifying the key issues and sorting the wheat from the chaff.
- You need to trust the management as they control the information flows, but you also need to be able exercise some insight into what they are either not saying, or what they are trying to say but perhaps are not expressing very clearly.
- You have to have the courage to speak up. But you also need to know when it is best to stay silent. Many things happen outside the board meetings, either through separate discussions, dinners or in the committee meetings. You need to be sensitive to the culture of the organisation to ensure you are able to tap into the key communication channels in an appropriate manner.
Have you found this transition difficult and what could make this easier for people?
- I have found it difficult to sit back, advise and guide and rather than to actually do. One of the biggest things a new iNED will be challenged on, both in interviews and then in their fulfilling the role, is their ability to sit back and not get directly involved – to stay on the right side of the non-exec and executive divide.
- Establishing a good relationship with the key executives and with the other non-execs on the board through meetings, discussion, lunches, dinners or just over cups of coffee is essential. There is a much higher level of personal commitment required than you would expect. You are hired and valued for your technical expertise and experience, but you are only effective to the degree you are able to establish the right relationships.