Non-executive directors (NEDs) were once famously dismissed by Tiny Rowland as 'Christmas tree decorations'. But now, urged on by the Hampel Committee's emphasis on their importance for good corporate governance, NEDs are in much greater demand. So how do you find a good one?
Companies are increasingly turning to head-hunters. Barry Dinan of consultants Hanson Green says that his firm treats the search for a good non-executive director in exactly the same way as a trawl for any other director. 'There is a lot of demand for non-executive directors, but for every 100 we get, only one usually measures up.' Hanson Green has three key criteria in the search for the fortunate few. The desirable non-exec will usually be less than 60 years old, will be currently running a big business and possess talents essential to the company.
The inevitable effect of tighter criteria means that, once the ranks of the top 250 chief executives have been quarried, the supply of top-notch NEDs begins to dry up. Finance directors are usually the next port of call followed by divisional managing directors. But some feel that any supposed dearth of quality candidates simply reflects a lack of imagination on the part of the companies who are looking for them. Recent research from GHN Executive Coaching and MORI highlights the rarity of female NEDs, for example.