[00:00:00] Ralph Grayson: Welcome to The Boardroom Path by Sainty Hird & Partners. I'm your host, Ralph Grayson, a partner in the board practice.
In this series, we'll offer practical steps and useful perspectives for aspiring and newly appointed NEDs. Throughout its 30 year history, Sainty Hird has recruited senior board members across the City, Industry, the Public Sector and NGOs.
We're now also evaluating those boards, as well as coaching and mentoring those seeking to transition from an executive career into the boardroom. So we'll be speaking to some leading figures in the board advisory and NED world. Specifically, we'll seek their counsel about how and where to spend time and energy to make an effective transition into the boardroom.
The goal is to equip recent and aspiring NEDs with tips, tactics and strategies to be most effective and build a successful career as a board director. In the process, we aim to help you to think more about who you are, how you operate and how you can make this work in the boardroom.
[00:01:14] Ralph Grayson: I'm delighted to welcome my guest today, Graham Durgan, the founder of the Non Executive Directors Association. NEDA is the professional association that develops and supports NEDs from diverse backgrounds with the right skills, knowledge and mindset to ensure they make a positive impact in the boardroom.
Members of NEDA are part of an inclusive and supportive environment of continuous learning and development to become and stay an effective and confident member of the boardroom through thought leadership, knowledge, events and networking.
Graham, you've got the most amazing background as an entrepreneur, a chair, and a board advisor, and your interests from the background I did have varied from Spitting Image, to YouTube videos entitled Cutting the Crap with Graham Durgan. So I can't wait to get stuck into this. Tell us a little bit about your background and the career journey leading up to your founding of the non-executive association.
[00:02:18] Graham Durgan: Thank you, Ralph. Sorry, I'm rather shocked. Nobody ever says I have an amazing background. My father and my grandfather, my uncles and my cousins are all accountants. So it was rather inevitable that I would become one. But the other thing they were, were entrepreneurs. So effectively, I was always going to be an entrepreneurial accountant.
And that's what I became. I trained at PwC, or what's now is PwC. And then I decided I really wanted to go skiing and spend all my life skiing. So actually the most interesting thing I've probably ever done is I set up a ski holiday business in the French Alps and had a fantastic time doing a lot of skiing.
Not probably the most profitable thing I've ever done, but probably the most fun. And then, after a while of kind of maybe not working as hard as I ought to, somebody said to me, would I come and teach law in an accountancy college? And that's what I did. And then I discovered this great passion for learning and, not my learning, but for other people's, and, for teaching.
And I really enjoyed it. And then that became my life and has been my life really for the last 40 odd years. I've always had an interest in a business that trains accountants. in the background, maybe I should say, you know, we've IPO'd some businesses, we've done some MBOs, MBIs, we've done all sorts of things, but mostly around that space.
And we've ended up with interest in recruitment business and advertising companies and all sorts of things. But really, the core to me is that I'm a poor accountant, and I like to think I'm an okay, trainer or educator. And today, we have a little business called M.L Wolf, but we believe in giving back.
And today, about 300,000 people, for example, across the world, will be using our books today, for which we're not charging very much. Maybe it's just our contribution to learning and education elsewhere in the world where people can't always afford it. We also have lots of people, fortunately, who can.
And we developed this kind of concept a while back, which was around book course test. So we write a book, and then we devise a course that fitted to that book, and then we test it, because we believe passionately that you shouldn't go on a course unless you test it at the end of it to check whether you've actually learned something from that course.
[00:04:35] Ralph Grayson: How does all that play into the vision of setting up the non-executive directors Association?
[00:04:41] Graham Durgan: Well that came about, actually, because, gosh, it must be, what, almost thirty years ago now, I was involved in a recruitment business, and I turned up one morning, and I was chairing their Monday morning meeting, and they said to me, Oh, Graham, they said, Who were you shooting with at the weekend?
I said, what on earth has that got to do with anything? Oh, they said, we need to recruit some Non Execs. And there must have been some good chaps on the shooting. And I said, what? You can't recruit people like that to be Non Execs. Being a Non Exec is an important role. And they said, oh, no, no, no, we haven't got time, Graham.
You know, we're getting paid X hundred thousand for doing this job for this investment bank. Okay. And we're getting paid, 20,000 for doing this non-executive director recruiting. You know, you can see where we're going to focus. And I kind of remembered that and about 20 years ago now actually, I had a bit of time and a little bit of money and I remembered that and I thought, do you know, I wonder actually what's happened in the NED world since I was last really involved with it from the recruitment side.
And so what I did was, I did a bit of research and concluded that there were literally hundreds of thousands of people who could potentially be non-executive directors. If only they had the self confidence to put themselves forward, and in order to get that self confidence to put themselves forward to do it, they probably need some training and some competence through maybe getting certified.
And so we came up with this book course test approach, where we wrote, a book called the non-executive director's Handbook, and then we devised a course to go with it, and then we had a test that linked to that, and we then, went and promoted it. And very quickly, we found that it wasn't just, my vision, other people actually bought into this idea about becoming certified as a non-executive director.
We were very keen to encourage people from all sorts of backgrounds to put themselves forward to do this. So we, and we tried, and we probably did it very badly, but we tried to market ourselves. And today, there's about 20,000 people associated in one way or another with the,non-executive directors Association, which is the organization that we set up back in 2006, actually.
And today we're running courses and we work closely with people like the Institute of Chartered Accountants, who offer programs to their members, but we work with them to do that. I feel quite good about it, actually. So that's really how we came to, to take the concepts that we used elsewhere in the accounting training space into the non-executive director's world
[00:07:12] Ralph Grayson: I must point out that executive search is far more reasonably priced these days. Certainly a service that justifies every pound spent on it. But it is, I think it's true to say that, that search and talent now has become a much more integrated process in which certainly we here at Sainty Hird think as search of only one pillar of what we do, which includes now, executive team and board assessment, executive and team coaching, and then search. So search is something you have to go to now if you haven't managed to do the succession planning internally and think about your talent team in a much more holistic way.
[00:07:48] Graham Durgan: However, you would still probably need to go out to find non-executive directors.Interestingly, one of the things we've done, as the Association is people come to us and say look we've got this big institution, they should probably come to you actually and do the same thing. But they come to us and say that we've got this big institution we've got people that we want to promote up through the organization to the board. But actually, they haven't got any experience of sitting on boards. And so what we do with them is we say to them, we'll put you through our programme, and then we'll help you find a role, because people often come to us and say, look, can you help us find somebody to do this role, often in not for profits.
And then so people leave this big institutional, well they're still working there, but they go off and they sit on boards, and then they come back to the institution, and actually they're less institutionalised. And then they go through, up through the boards of the business.
[00:08:47] Ralph Grayson: It's certainly true to say that you're, without wanting to be too sycophantic, you're one of the first people I really enjoyed listening to when I started thinking about boards and governance and what that means from a talent perspective.
And certainly you were one of the first people I really listened to talking about board apprenticeships, I think was an expression you used, and also you were one of the first people I really listened to talking about diversity, and the need for diversity of thought, action, background, perspective, that's most broadest sense of diversity on a board.
Can you just elaborate on that for me and what that really means for you.
[00:09:25] Graham Durgan: Yeah, well it's actually, of course, just become very unpopular,
[00:09:29] Ralph Grayson: I might come back to that in a second.
[00:09:30] Graham Durgan: In the light of some recent comments that have been made in the US. I believe that boards work best when there is diversity of thought in the room. And diversity of thought can come from backgrounds, it can come from education, it can come from experiences.
There's a whole raft of reasons why people have a diverse way of thinking about things. But my take is that if you then have effective chairing of a discussion of a group of diverse people or diverse thoughts into the middle, and it's properly summarised, etc., which is the chairing role. Then you will get better decisions at the end of it.
I'm not in favour of just of, there being quotas, except to the extent that quotas fast forward positive action. That I can get. But I, believe passionately that proper chairing of a group of people with diverse experiences and backgrounds, etc., can result in better decisions. And so it's all my idea behind it, and when I chair of business which has this as its kind of, byline, is that, we're building better businesses through enabling better diversity.
[00:10:39] Ralph Grayson: Le
t's just touch a little bit more, if we might, on Trump's bonfire of the acronyms, right? A lot of stuff around boards has been all around DEI, ESG, working from home, whatever that is, WFH. Any thoughts in particular on what you think that means for boards here in the UK and what that's going to mean for how chairs or heads of noms committees are going to have to think about board composition, board themes, board priorities, and therefore the type of people they might need on those boards going forward?
[00:11:10] Graham Durgan: What's happening in the US is playing out as we're recording this. And there have been various comments made which appear to be very against diversity. I believe that if you are a business in this country and you've got American capital involved or you're selling a lot into the American space, you're going to have to think through what the impact of this is going to be.
I believe that there will actually be a more focus upon the word inclusion, as opposed to the word diversity, because I think the word diversity, has many meanings to different people, and not all of which are positive, particularly in the U.S environment. Whereas I think it's more difficult to push back against the word inclusion.
I think the idea of including people in a board discussion, in order to enhance the value of that discussion, can't be argued with. If you start to demand that people are only there, because of a perceived diversity quota or something, then I think that is easier to push back on. I don't agree with that, but I think that's where we'll end up with.
There'll be more of a focus on the word inclusion, and the word diversity will start to fade a little bit.
[00:12:23] Ralph Grayson: I think it's absolutely true that you can't have diversity on a board without inclusion. There's no point in having a representative there, whether it's token or not, well meaning or not, if that person isn't encouraged to contribute to the debate, know where their skill spike is on the board, and what their fit in the team is.
[00:12:39] Graham Durgan: The point you make about fit is really important, because of course a good chair or whoever is putting a board together will be very anxious to ensure that there isn't just a mono thought process that's going on in that room.
If they're wise and sensible. Some people might just opt for an easy life where they just get their mates around and have a chat, but one tends to find that you get better decisions, where you have a more inclusive approach.
[00:13:04] Ralph Grayson: So let's just think about what that means for an aspiring or a first time NED. Because we've got this catch 22 in board composition that you can't be a board member until you've been a board member. So how does NEDA think about that? How does your training programme try and qualify the candidacy for a first time NED?
[00:13:24] Graham Durgan: Well interestingly, that's in a way how we got into it, because we did a bit of research, which said that there are a lot of people who were perfectly capable of sitting on a board and adding huge value, but we're never going to get the opportunity. For the reason you just said that they hadn't been a PLC director and therefore nobody was going to invite them on to be a non-executive director on the board.
And we thought, well, you know, if you've run a major division of a huge public company, that's often much bigger than a FTSE 250 would be, for example. And if you run a huge bit of the, say, the civil service or something, you might not have been the top person, but you still run a jolly chunky piece of stuff.
And irrespective of whether you run something that's big or not, you still could probably contribute very powerfully to a board which is appropriate for your skills and, what you can bring to the table. I think that from the NEDA perspective, we were anxious to equip people with the self competence that would come from having the knowledge that they would need to be at the board table.
I have to say that many of the people that have been through our programme are actually a lot better equipped with knowledge than people who have sat at boards and just simply believe that they know everything. I think that if I was the chair of a non co, or maybe the chair of a board, I would be trying to encourage more and more people to prove that they actually know that they've got the knowledge to sit there at the table, and not just rely upon their experience.
And I think it's not just in the non-executive director's world that this happens. A parallel would be, for example, in the accounting world. The last time I was tested in my knowledge of matters accounting was back in the early 80s when I qualified as a Chartered Accountant.
That's ridiculous. I think that people should be tested more often,and whether that's as an accountant or as a lawyer or any professional, I think the same rule should apply to people that sit on boards of companies. You know, you are a director of that company, so therefore all the directors of the company, in my view, should be regularly tested. Why not?
[00:15:30] Ralph Grayson: I think there's a number of things to pick on here. For the avoidance of doubt, I went through your programme. I've passed it, or else we wouldn't probably be sitting here. It was at the second attempt, and you did warn me that don't think this is something you just turn up and tick a few boxes online and pass it.
It came as a bit of a shock when I didn't pass it. I'm arrogant enough to say I don't fail many things and this was one I definitely failed the first time. So I did it properly. I did a lot of self analysis as well, in terms of what I thought I knew as well as what I knew I knew.
And one of the things that stood out for me as I was going through the book and doing the online course, was one of the slides we went through and debated was the four key skills on the board, strategy, risk, people and performance.
Do you want to just develop that because I think that's so integral for particularly first time and wannabe board members to understand and particularly those who perhaps come out of very successful executive careers and are thinking about their first step into the boardroom. What those differences are and how that, Strategy, Risk, People and Performance really encapsulates what your role is on the board.
[00:16:38] Graham Durgan: To be fair, it wasn't actually, we didn't come up with it. There was an investigation into some collapses about, I don't know, 20 years ago, and the person that did the investigation came up and said, Do you know, being on a board, not just as a non exec, is all about strategy, risk, people, performance.
Understanding the strategy, setting the strategy, assessing the risks, making certain you've got the right people in the right place to do the roles. And then to keep on top of the performance, and of course, we all know the most important bit of performance is cash flow.
To be honest, I don't think it really matters whether you're a non exec or an exec, and there's somebody the other day was going on to board as a director, and, not a very large company, but asked my advice, and I said, look,it's about these four things, strategy, risk, people, performance.
And they were actually asking me, they said, look, somebody suggested I have a non exec director here, and I've appointed this person and I'm paying them X. And they said to me, I don't think they're really adding very much. And I said to them, well, just look at them through the lens of strategy, risk, people, performance.
Are they adding to the strategy? No. Are they helping you assess the risks and making certain that you've got processes in place to reduce those risks or you behave in a way that reduces them? No. Do you have the right people? Are they helping you recruit the right people? Are they pointing out to you the gaps? No. And performance? Are they on top of it? Are they advising you about ways to help with your cash and all the rest of it. No. I said, well, frankly, in those circumstances, I think you're right in your instinct. And your instinct, I think, is to ask them to leave. And they said, yeah, I suppose I am. I just needed the courage to do it.
It's interesting how often that happens, actually. People come to me and say, Graham, you're supposed to understand this governance stuff. What do you think? I just simplify it down to those four words. Strategy, Risk, People, Performance. And say, look, are you getting value in that space? Do you understand? Often people come to me and say, I don't really understand what's meant by strategy. So I say, well, okay, then we talk it all through.
We tend to focus on non execs on large PLCs. But actually, as we both know, there are people fulfilling the role of non execs, in all sorts of places. It could be on the, the local church council, or something like this, or the local council itself, or on a local school, a school governor or something. Effectively, it's the same sort of role.
And therefore, again, I think, as long as you're over the four, things, and I encourage people who chair those things to talk about strategy, risk, people, performance. One of the big issues, I think, Ralph, is that people put up with poor chairing. I think the one thing that we're starting to see now in the Non-executive Directors Association is a growth in the number of people who are coming forward and asking to come on our chairing And it's interesting, the other thing that they're starting to say is, and to be honest, we don't really understand the finances, so we've got a lot of finance for non financial director stuff going on in the background as well.
[00:19:30] Ralph Grayson: I think so much of this actually comes back to something I spend a lot of time with, potential candidates on searches or people, who were trying to coach as they seek that first board seat. It's actually, what do you solve for? Let's not go back through the executive CV. Let's deconstruct it and say, Okay, where do you think the skills gap is on this board?
Hopefully you've done your research, you've looked at the background and the skills of the people on the board. Where are the gaps? What's the job spec telling you? Which hopefully you've read and digested. And then instead of trying to think of boards or NED roles as a generic label. It's actually just an umbrella title, which is much more about what do I solve for?
[00:20:14] Graham Durgan: Yes, the thing we haven't discussed is the knowledge of the industry that you're going into as well, or the knowledge of another industry that you're bringing to that table. For example, be it technology will be one example, but I agree with you totally. For aspiring NEDs, you have to think through how you're going to add value to that role and I've often thought that you must get thoroughly fed up with people that ring you up and say look I've just finished this big job and I'd like to be a NED when people do that to me I say well go and think about which company you'd like to sit on and why you'd like to sit there and how you're going to add value to that company and when you've done that then come back and then I'll from my perspective introduce you to Ralph, and Ralph won't go, Oh no, not another one!
[00:21:01] Ralph Grayson: Well, the key to this, of course, I mean, it goes into polarities in my experience. Either you've got very senior, seasoned and successful CEOs who suddenly have imposter syndrome about going in the boardroom, or people who can't take that step backwards in the old show don't tell. So many people want to tell me their executive history, and I say, Stop.
Not relevant. Show me what you've done, which will lead me to believe you will solve, for my client's problem, or if you're seeking that elusive first board seat, show me what you're going to add, which is the skill spike that's going to make you relevant to that chair of the noms committee.
[00:21:41] Graham Durgan: Yes, and then, of course, also, you've got the thing about the role of the non-executive director varies depending upon the type of business that they're going into. For example, I've just come from a board meeting of quite a small business, which I happen to be the chair of. My role in that business is far more hands on, and is, far more kind of encouraging and controlling on a really quite detailed way, than I would be if I was chairing a much larger company. It's more of a mentoring role than it would be in a much bigger business.
[00:22:14] Ralph Grayson: I'll come back to that a little bit later, because that's something I'd like to explore a bit,further with you. B
ut one of the things I'd love your perspective on is just this crucial difference between executive and non-executive. So if we think about non-executive roles, about being around oversight, challenge, assurance, the challenging friend.
What does board readiness mean to you in that respect? IE, what are you looking for when you look at somebody, interviewing somebody formally, or giving advice and saying, Yep, you're ready to go on a board.
[00:22:48] Graham Durgan: I think you're looking for the things that you just outlined. Do they understand what is meant by the non-executive as opposed to the executive role? Do they understand that a lot of what, has been incredibly important to them over the last 30 years, probably is not quite so important now.
We've also got a kind of mentoring and coaching business, and it reminds me of that. Because in that space, lots of, lots of people come to me, and they say, Well, I'd like to be a mentor or a coach. And I, I say, well, sure, come and have a chat. And we take on way, way less than 10 percent of the people that come to us.
And one of the criteria is for being on our kind of coaching mentoring panel is that you must have run a company with at least 500 million turnover.And so all these very experienced people are coming in to see me, and we give very few of them the opportunity to go forward, and the reason is simply because they don't listen.
They're too busy, they're so used to doing, and implementing, and driving, and making things happen, that they're haven't really thought through how different it is to be there as the advisor, to be there as the mentor, to be there as the counsel, to be there as the person keeping the ship on the straight.
But being prepared to put the hand up if things are going wrong, sure. But actually it's a, it's more of a kind of a guidance and counseling role than it is a doing and making things happen.
[00:24:07] Ralph Grayson: I think the challenge for both of us, it sounds at us from our respective seats is leaving the ego at the door, as the saying goes. Right?
[00:24:15] Graham Durgan: Yes, it's also leaving the training at the door because you've, spent 30 years being taught that this is how you've got to do it, and you've got the drive and, move and it's all about momentum and, determination, et cetera. Whereas I think the role of the non-execs are far more thoughtful role.
You will at certain times have to step in and make things happen in certain ways. But, if you wanted to sum it up, it may be it is, it's wise counsel and thinking as opposed to just doing it, making it happen.
[00:24:46] Ralph Grayson: I think one of the interesting things, and it's why we start our training course now with a psychometric test, so that people can actually look themselves in the mirror and think, not only, what do I think I stand for, but how do other people think about me? Not everybody is cut out to be a NED. Not everybody who's been a fantastic CEO has the right personality and characteristics to translate that.
It's the old, sage on the stage to the guide on the side, I think the saying goes. you can teach part of that, but actually fundamentally it's a DNA skill set.
[00:25:22] Graham Durgan: Yes, I would argue that the very best CEOs are really quite self aware. And therefore they can make that translation across. It's often,people have perhaps been over promoted who don't have that self awareness, and therefore find it difficult to move into the NXD.
I never really thought about that in that way, but I think that's so, actually.
[00:25:42] Ralph Grayson: Yeah, I think we're entering sensitive territory there, but it's good for the listeners to maybe do a bit of self analysis at that point. So look, I think we've established boards aren't a one size fits all.
Can maybe you just elaborate at this point on your understanding of how a prospective NED should really think about their fit on the board, the difference between a public and private board, which you've touched on in terms of the size of the company, and the need to understand the difference to really add value.
[00:26:12] Graham Durgan: Okay, well, so public private we touched on, and depending upon the size, you know, it's some very large private companies, but depending upon the size, your role will be slightly different. You're still going to have the governance space, but you're going to be more kind of hands on, I would say.
[00:26:26] Ralph Grayson: How do you convince somebody you're the right fit on the board? The personal brand bit, I'm sitting here as the chair and you've been a successful CEO, what's going to make me say, Yup, Graham's going to be a really good fit on my board. He understands the difference between executive and non-executive.
[00:26:41] Graham Durgan: Well, I think one of the things you're going to think as the chair is you're going to think, is this person going to be a bloody nuisance? I mean, are they actually going to come in here and try and run the show? And is that really going to hack off my CEO? So there's, there is that, kind of personal interrelationship.
[00:26:55] Ralph Grayson: Noses in, fingers out.
[00:26:56] Graham Durgan: Yes. And, and there's a bit around.can the person sit still? Is this somebody who's going to fit into the kind of, how can I put it, that intricate jigsaw that as a chair you're trying to put together to control your board?
It would be useful if the ex CEO, when coming to see the chair, they should turn up with their Non-executive Directors Association passmark, of course, but I would also expect them to turn up with a,maybe they're humble enough to come along to the table, it's an interesting word actually, but maybe they're humble enough to come along and be a supplicant at the table, as opposed to being the dominant personality that they might have been previously.
[00:27:32] Ralph Grayson: The certification bit I think is worth spending maybe a minute or two just delving into a little bit further. Because certainly I view it as the driving handbook before you do your driving test. And certainly I found a lot of comfort in that. Tell me a bit more about the rationale of why you chose to have it as a certified course, and how you think NEDA is therefore different from some of the offerings out there, and certainly the plethora of NED platforms there are these days.
[00:28:01] Graham Durgan: People that know me often use the expression of cut the crap. You said it to me earlier this evening when we met. So my approach is always, keep it simple, let's get round to the absolute core of what needs to be done or said or whatever. My take is that if you're going to do a really responsible role like being a Non-executive Director, then why wouldn't you, in your words, pass the driving test?
That, in some way, certifies you to do that. Now, there is nothing in law that says that you've got to pass this driving test. But, I don't see why there isn't. I don't see why insurance companies aren't saying to people when they're giving out D&O insurance, Excuse me, but have the people on your board pass the Non Executive Directors Association test.
And if you haven't, they add a kind of extra premium on the top of it. And if you have, maybe they take a bit off, who knows? I mean, one of the sponsors of the Non Executive Directors Association is Willis Taz Watson. And one of the reasons that they're involved is because they feel passionately that actually we help reduce some risk.
Because by people passing our test, they've proved that they've got the knowledge, and that knowledge will then help them make better decisions in the boardroom and understand what their responsibilities are. Well, I don't put words into people's mouths, but I think that must be part of it. And as I said earlier, for the last 40 years, I've worked in businesses where we're trying to get people certified in one way or another.
Either to pass their professional accounting exams, or law exams, or whatever. I see no reason why people should not be certified before they're allowed to drive a car to sit on a board. I actually think it's more than just the non-executive directors, actually.
My view is that all board directors, should be certified and should aspire to be certified. I mean, why wouldn't you?
[00:29:45] Ralph Grayson: I think it's so interesting that the corporate governance code is putting so much more emphasis now around boards showing the way they have thought and reached the conclusions that they've got to, and to that point, having some sort of traffic light system of, is this board actually qualified to make the judgments and think the way it should?
That's such an interesting theme.
[00:30:07] Graham Durgan: Yeah, I totally agree. So just to kind of recap, we've got the certification programme for all sorts of professionals, in all sorts of areas. Why shouldn't it apply to board directors?
[00:30:18] Ralph Grayson: Let's take that back a little bit to where we came in terms of the emphasis on diversity. Because that thought around cyber, social media, a number of the new issues that everybody's thinking about is driving, certainly when I put my headhunting hat on as opposed to my coaching hat, is driving us towards younger candidates to go on a board with perhaps more lateral skill sets than we may historically have thought, with a right ticks box approach to old school headhunting and recruitment. So,how do our younger listeners think how to position themselves, and what do you think is that right blend of maybe experience and enthusiasm, would that be the right word?
[00:31:03] Graham Durgan: Yeah, maybe. There used to be that old joke about what's the difference between a supermarket trolley and a non-executive director. Do you know it?
[00:31:10] Ralph Grayson: Go on.
[00:31:10] Graham Durgan: The supermarket trolley's got a mind of its own, and you can get more booze than a non-executive director, and that is the perceived view of many of non-executive directors.
Maybe there's some truth in there, but actually there shouldn't be.and I certainly, aspire to, let's call it the inclusion, using the new approach. Why would you not include young people on your board? And the answer is, oh, but they haven't got the wisdom because they haven't been there and done it and made all the mistakes.
Yeah, exactly. So you're getting a fresh approach to everything that's going on. I've never had time in any aspect of my life for people to say, Oh, we've tried it before and therefore we're not going to do it again. And at least often the youth will say, look, let's do that. And you say, well, you're tempted to say, well, we know we did that, and it went wrong.
And they'll say, Yeah, but things have changed. We're in a different scenario. Let's have a go. And I think, to your point, freshness, enthusiasm, but actually new skills as well. I mean, why would you not put them on the board?
[00:32:12] Ralph Grayson: So the board is a disruptor. There's a thought maybe.
[00:32:14] Graham Durgan: Well the board certainly in my view should be a disruptor. You know, when I've been talking to people about leadership, and I said, if you have to describe leadership in one word, what is that word? And people go, well, it's about vision, it's about inclusion, trust, and it is.
But my thing is that actually leaders are all about change. What I would be saying is to have people around you in a boardroom who want to go and disrupt is a hugely positive thing. You do not want people that's just going to kind of nod and go, yes, yes, yes. We've done it that way for the last 30 years and let's carry on doing it for the next 20.
Because actually they won't be there if that's their approach, in my view. And I love having younger people around in that it it pushes change.
[00:32:56] Ralph Grayson: House of Lords report earlier this week, or maybe last week, was talking about the lack of risk culture in this country, and how we don't celebrate wealth creators the way perhaps we do in the States.
[00:33:08] Graham Durgan: But if I can, right? We talk about strategy, risk, people, performance. People think, oh, well, risk is about reduction of risk. No, it's not. It's about understanding the risk and what you're prepared to adopt. More risk can certainly come from more ideas or maybe better, more incisive ideas.
Why would you not encourage that in the boardroom? Okay, you're gonna then go and mitigate the risk. Of course you are, but that doesn't mean eliminate the risk. And I agree with the House of Lords report, then I spent quite a lot of time in the States, so I was there last week and yeah. If I was advising my kids where to go now and have an entrepreneurial life, I'd still say go to the US because it's,it's got a different attitude.
However, that I have to then kind of modify slightly, because their corporate governance is different to ours. I actually think that our corporate governance is better here, which will probably get some of your listeners going a bit.
No, I do think it's better, But I think it is dangerous to think that it is automatically better in that it can be seen to slow down decision making and it can be seen to reduce risk to an extent. the minimization of risk is not something that people should aspire to.
[00:34:22] Ralph Grayson: I think that's particularly relevant in the context of so many public companies either going private now, being taken private, relisting in the U.S. So many aspiring NEDs come and see me and say, well, here's my executive background. This is, it was a FTSE, it was a 250, it was an AIM, it was a whatever.
Therefore, I should be on a comparable board, as a NED. and I try again, try and sit back and say, Okay, what do you solve for? Actually in a scale up, you're there much more to bring your network perhaps, your knowledge of investors to be supportive to the founder, totally different role to being on a AIM or any sort of PLC board.
I just wonder what, how you're finding the people you talk to or asking your advice, how they're trying to think about boards. The role on a board in the context of this public private pivot we're seeing going on at the moment.
[00:35:20] Graham Durgan: I have to say that, most of the people that come to us aspire initially to sitting on PLC boards. And after they've been through our course and our programme and the certification, they recognise that in many circumstances they can add more value and be more directly influential, on private company boards.
And that is because, as we both know, there's more corporate governance rules in the public company world.There's a separate issue, which is around the access to capital in this country, as opposed to the access to capital elsewhere in the world, particularly the U.S. And there's another issue around appetite of risk, as you've referred to in this country, and as exists elsewhere in the world.
So if you were a young entrepreneurial person, where would you want to be based? Would you want to be based where you've got more access to capital and you've got a,countenance of higher risk? Or based in a place where it's a bit fuddy duddy and that doesn't exist? That, I think, is what people are wrestling with in this country around the listing rules, et cetera.My advice to people wanting to be non execs is forget the public private stuff, just think about where you think you're personally going to add the most value and then find the business that you think you can add the most value to. And then go and give Ralph a ring.
[00:36:47] Ralph Grayson: The other thing I find myself talking about a lot, we've had this rather historical approach of you learn governance by being on a charity board or a not-for-profit all of which is great. What I'm increasingly saying to people is I, for example, sit on a couple of incubator boards and I work with the founders.
And I find that enormously satisfying because founders are desperately looking for some wisdom. And what you're not thinking about is that board governance process that you do as a PLC board member. And it also de risks it for a lot of particularly the younger people who perhaps don't want to, particularly in a FinTech, perhaps take on that regulatory risk.
[00:37:27] Graham Durgan: I would say, yes, but you've got a different risk there often running as well, which is basically you don't want to run out of cash.That's the fundamental one, isn't it? So as long as you've got that, we're talking about strategy, risk, people, performance, yes. What fun, but that's because you're kind of entrepreneurial.
I'm entrepreneurial. We love smaller businesses that are going to grow fast and they've got new ideas and with people who often yeah are younger and they're just a joy to work with because they're not encumbered by having made so many mistakes.
I mean what we bring to that I think, and what many of the people who I advise bring to it is, they bring wisdom, which is, basically it's accumulated cock ups, and what we can say to people is, don't do what I did. If you do this is what tends to happen.
And I don't think that's a good idea, and that's back to your adding wisdom.
[00:38:15] Ralph Grayson: I spend my life telling founders get a good chair and get some board advisors. But, don't get a board advisor who's an exited, founder who exited on the first time. Actually you want somebody who got it wrong five times, not the person who swung for six.
[00:38:32] Graham Durgan: That's very much the U.S approach. You know, you often find, you learn from your mistakes, rather than what actually went, well.
[00:38:38] Ralph Grayson: So, let's try and pull this together in a bit of a conclusion then. So, you've chaired a number of successful search businesses.
Other search businesses beyond Sainty Hird are available. How has the search industry approach to recruitment changed over the last few years in your, perspective, and in a world where most board roles are still filled by private networks rather than search firms per se, how do our listeners shape their strategy to get that first seat on a board?
[00:39:07] Graham Durgan: Hmm., It's interesting. You're talking about search firms. I do chair a search firm at the moment, which is very, very good at finding, diverse, inclusive candidates. That's its whole role.
[00:39:17] Ralph Grayson: Go on, give it a plug.
[00:39:18] Graham Durgan: Well, that search firm is called Audelis, and its consulting practice, which it runs alongside it, is called Involve.
And it's, a highly successful business specializing in finding people from different backgrounds to sit on boards and sit on management committees and in the C suite, etc. I love working with it because it's a very vibrant and inclusive, I mean it's a fantastic thing to work with because it's young and it's driving and it's doing stuff which is new etc. I think the search world actually has become more professional is what I would say.When I was involved in it the previous time, which is probably 20 years ago now, it was starting to use psychometric testing and other forms of testing.
Yeah, of course it was. But was it really paying much attention to the results that came out of that? No, I don't think it was.And I think there was still a bit of a, kind of an old boys club that used to operate in that space. I think it still operates in some spaces, but I think the search firms have become much more professional.
Is there still the opportunity for people to put themselves forward through the kind of friends? Yes, of course there is. That will always go on. But the friend of friend is not going to get much time, I would suggest you'd know more about this than me, because you're right at the sharp end.
But if somebody just turns up as a friend of a friend, you're going to want to see more than them, than just the friendship, and you're going to want to know that they've passed the Non-executive Director's Association test and that that, well, they've made an effort to understand which company they'd be most appropriate for, why they'd be appropriate for that business, and how they would add value to that business.
And I think that if you are therefore trying to get a job as a non-executive director, you better think through your answers to those questions.
[00:40:57] Ralph Grayson: Without doubt, there's a lot more emphasis placed around neurodiversity, psychometric testing. If anybody's interested in this, my partner, Rupert Matthews, has posted a number of, articles on LinkedIn, around, the use of psychometrics, both in individual and team context, and indeed we here are increasingly working with VC and PE firms who say we really like the look of this portfolio company that we're thinking about investing in or reinvesting in, in terms of its financials, but we're just worried about the founder fit, or we're worried about culture. Has it scaled up too fast? And is that culture becoming negative, not positive anymore? So I think that's a very important theme of all of us are having to be more professional and think about this.
[00:41:38] Graham Durgan: And I think we should have made more play, actually, in our conversation about culture, and the necessity to fit in the culture, or the necessity not to fit in the culture, and it to be understood that you're not going to fit, but you're going to add value, by probably challenging the culture that exists.
I've always believed that old saying that culture eats strategy for breakfast. I think that's completely so.
[00:41:57] Ralph Grayson: So much about being a good board member is about what happens outside of the board meeting. And when you're a candidate for a role, think about the dinner before the board meeting. Do you want to sit next to that board member? And is that board member going to want to sit next to you? So that defines a lot about, am I a fit in the culture of this board?
[00:42:22] Graham Durgan: And I think also the extent to which the board and the business is going to welcome you in as a non-executive director. Are they actually welcoming people to be non execs? Do they want you there as the challenge, are you there to make up the numbers? Are you there because they want you to be there?
And I think one way of testing that is the induction program. Because well run boards will have a very good induction program, and they'll make certain that you understand the business as quickly as possible. I've heard lots of people say, Oh, I never, I didn't really understand what was going on until I've been there for two years.
That's ridiculous, right? We don't have that time now. If there isn't going to be an induction program, you have to ask why. One of your key questions to the chair or to whoever, is what's the induction program? How does it work? And did it work with my predecessors? And then talk to your predecessors about, what was right, what was wrong. How does it all hang together?
[00:43:15] Ralph Grayson: Yeah. It's something I spent so much time with candidates saying, you can judge a lot by a company and the board and the role by what's the quality of the previous board pack,
[00:43:24] Graham Durgan: Yes.
[00:43:25] Ralph Grayson: Ask to see it.
[00:43:26] Graham Durgan: Yes, exactly. And, these 300 page board packs, which by and large had gone, thank goodness. But they were ridiculous, and they were just there to obscure.And it is the information that's going to flow out to you. You know, we're back to performance, the performance information, for example.
Is it appropriate? Is it obscured? There's a business I looked at, who was asked to go in and just had a conversation with a very large business. It had 200 KPIs. I mean, it was utterly ridiculous and we took the 400 page board pack and turned it into one that was about 40 pages at the end of it and even that I thought was too long.
So what are we saying? We're saying get some kind of certification. In my world, you have knowledge, skills, behaviour as increasing kind of levels of application, if you like.
If you don't have the knowledge, you are always going to be exposed, and if you haven't proved that you've got the knowledge, then you are definitely exposed.
[00:44:16] Ralph Grayson: So hopefully we've not put our listeners off. They've decided they're right for a NED role. They've decided, that they solve for something that they want to, give something to. So if they want to follow up with NEDA and they're interested to learn more, what do they do? Where do they go?
[00:44:33] Graham Durgan: nedaglobal.Com or graham.durgan@nedaglobal.com. N E D A Global, that is, and we set ourselves up as a not for profit and we're really anxious to encourage people to put themselves forward to be non execs and for us to help them become non execs.
[00:44:50] Ralph Grayson: So aside, finally, from NEDA membership, what practical steps should a prospective board member do in order to best progress their path to the boardroom?
[00:45:01] Graham Durgan: Oh, you should pass the NEDA exam. there is nothing else. I think the other thing is to ask yourselves the key question, why do you want to do it? Do you want to do it because you want to get paid X thousand a year? If you want to do it for that reason, forget it.
That's not what it's about. Are you going to be able to add real value to the business that might have approached you, for example? Or, again, are you just going along to make up some numbers? Being a non-executive director is a hugely responsible role.
And it shouldn't be taken lightly. You should prepare yourself for it, and you should do the due diligence before you go into it.
[00:45:34] Ralph Grayson: And it's just really hard, right? I think the stats suggest you've got a 1 in 17 chance of getting your first board role as a candidate. So if you don't think through the cover letter, if you don't think through the justification and the fit, you ain't gonna get the job.
[00:45:53] Graham Durgan: No, you're not. And there are an awful lot of people out there who think, because I've done X, I'm automatically entitled to Y. That's not how it works at all, as you know better than anybody.
[00:46:02] Ralph Grayson: So, on that bombshell, do your homework, justify your existence, be clear on what your personal brand is and what you solve for, and get out there and network.
Graham, it's been a pleasure. Thank you.
[00:46:15] Graham Durgan: Thank you very much.
[00:46:16] Ralph Grayson: I hope that you've enjoyed listening to this podcast and have found it helpful when thinking about how to approach your own path to the boardroom. If you would like to push this a little bit further, Sainty Hird runs a bespoke one to one programme designed specifically to this end. For more information, please visit our website, saintyhird.com, follow us on LinkedIn, and subscribe to the Boardroom Path to receive new episodes. Thank you for listening.