We need to find the next generation of chairmen
THE news that Carl-Henric Svanberg, a Swede, is to chair BP highlights the increasingly international nature of UK plc. But it also raises the interesting question of where the next generation of chairmen and women for Britain’s blue-chip quoted companies will come from.
Talk to any City headhunter and they will tell you more and more companies are looking abroad to find talent. Some believe it is about diversity and relevant experience and a dearth of quality here.
Other recruiters argue that to get the best talent you need a chairman who’s good at dealing with cultural differences because our biggest companies are now focused on emerging markets for their growth. The FTSE 100, particularly the top end, is now very international in flavour. BP is a good example of a British company that does most of its business outside these islands. So chairmen with experience of living and working in other cultures are attractive.
But perhaps the main reason to employ foreign nationals as chairmen is that a swathe of Britain’s leading chief executives have been discredited – bank bosses Sir Fred Goodwin and Andy Hornby being the obvious examples. The natural heirs to the top jobs at some of the UK’s best-known quoted companies are effectively ruled out. Instead we risk sticking with the same bunch of serial non-executives who pop up on every other board. One headhunter lays it on the line: “There are often very good European or international candidates because they are less hampered by some of the disasters we have had in the UK. And some of our chairmen have been passed around like parcels. It is just not good enough.”
Those up and coming senior executives with an eye on a future chairmanship are wary about taking a chance on a company that has seen its reputation damaged in the global crisis. They are instead content to bide their time, building up non-executive experience and managing organisational change – another skill increasingly in demand – and learning how to handle strong CEOs.
Rather than focusing on failure, candidates should look to the skills they can offer when the chairman’s post becomes vacant. In the wake of the financial meltdown, they will want someone who can form a link with investors because institutions are expected to grab much more power.
Crucially, headhunters and corporate governance experts believe that future chairmen need not have the skills of chief executives. Many successful board heads such as Philip Hampton at RBS, John Buchanan at Smith & Nephew or Jan du Plessis at Rio Tinto are finance men and have never been CEOs. It is not that we have a dearth of talent for blue-chip chairs in Britain but, in a multi-national Canada, the focus is now on finding global non-executives to help run truly global companies.