Digital: The Rise and Rise of the iNED
It is widely acknowledged that COVID-19 has accelerated the existing digitalisation of the business landscape. Staying close to changing consumer needs and behaviours has become even more critical than before, and many businesses are turning to complex technology to enable this.
Whilst the day to day running of the business remains the responsibility of the executive team, it is also known that during periods of crisis and change, the role of the Non-Executive steps up a gear – taking on the more demanding requirements of challenging and supporting the Executive Leadership Team, acting as a “sounding board” for projects and so on.
However, what is less broadly discussed is the level of relevant experience around the board table when it comes to these highly technical transformations. By definition, Non-Executive Directors will have held senior executive roles, with impressive career achievements. Whilst the model is beginning to change, the most common ‘type’ of Non-Executive is the ‘Portfolio NED’ – individuals who have left their hands-on roles behind them and have now built out a portfolio career, in most cases at some distance from the “nuts and bolts”. In the intervening years, much has changed – even pre-Covid, the pace of technological advancement meant that technology, risks, opportunities, consumers were all very different now from the landscape five (or even two!) years prior. The last eighteen months has only broadened that gap.
Norman Broadbent recently ran an analysis into the background of current Non-Executive Directors within the retail and consumer sectors across the FTSE 350. The results made for interesting and thought-provoking reading:
- 19% of Non-Executives within these sectors are serving executives, experiencing these challenges on a day-to-day basis within their own businesses and able to share their perspective/current knowledge with their board colleagues
- Just 16% of Non-Executives within these sectors have in-depth digital experience that will have given them still-relevant digital knowledge and experience
Given the nature of the challenge facing businesses in the months and years to come, we would suggest that many boards are lacking essential skills and knowledge that would enable them to support Leadership teams through the challenges to come – and that Boards should consider how best to address this gap as a matter of urgency. This may include a brief for specific profiles as part of ongoing succession planning, recruitment of additional non-executive or executive board members, or possibly even a “shadow” digital board – as we have seen from time to time in Europe. It will be important to bear in mind that each business, sector and board will have their own specific requirements depending on a complex mix of factors including existing dynamics, target market, competitive landscape and maturity of the organisation – a recent IPO will have very different technology/digital non-executive needs to a mature FTSE 30, for instance.
With over forty years of experience, and an innovative Board Practice interlinked with its dynamic sector and functional hubs, The Norman Broadbent Group is well placed to support you. To find out more about us, or perhaps to talk through your Board needs in more detail, please contact Ross Stacey via email@example.com for an initial confidential discussion.