As a former General Counsel and now board effectiveness reviewer, I often get asked by lawyers about becoming a non-exec and the best way to go about securing a role.
When they hear my advice – which is that few lawyers will make it as non-execs on boards of commercial companies, they often become a little dismayed and sometimes even defensive – I guess that is in the nature of their role however!
Still, if you are a lawyer wanting to transform yourself into a non-exec, in my view it is better to know the true picture. As such, I have set out below some of the reasons why it is challenging (that’s the glass half empty in me!) followed by a few tips on how you can improve your chances (the glass half full!)
Why the Lawyer to non-exec role transformation isn’t easy as it might seem
First, and this applies to all candidates whatever their background, there are far more candidates than there are roles in the commercial sector – that is, where you might expect to be paid.
If, for example, you take the listed sector and the FTSE All Share Index there are about 600 companies. Most Boards of FTSE companies comprise about eight to ten members typically with two Executives (the CEO and CFO) leaving about 6-8 non-execs on the Board. That means there are only about 5000 non-exec roles in this index.
And it is worth remembering that there aren’t 5000 vacancies at any one time. While I don’t and can’t know the precise number of those seeking non-exec roles, I am pretty sure it exceeds 5000. Of course, the FTSE All Share is just one sector of the commercial non-exec market, albeit an important one, but you get the picture.
Secondly, if, as a Chair you have only five or six non-exec roles there are certain skills and experience you are likely to want to prioritise, over and above legal ones. Boards like to have members who have run other companies or at least been at the forefront of doing so. So having a current or former CEO will be an attractive asset and most boards will need an accountant or two to Chair or be members of the Audit Committee.
Having someone steeped in strategy or marketing to help the executive will be seen as beneficial - these are important skills to drive forward in both the board and the company as a whole - while a non-exec with an HR background will be helpful with both the Remuneration and Nominations Committees and, more importantly, the people aspects of the company – after all, businesses are all about people (or at least they should be).
Sector experience is also important provided it does not lead into a non-exec acting operationally and here, of course, a lawyer with an in-depth knowledge the company’s particular sector, may have an advantage (see below). On the whole, however, Chairs of boards are going to look for the experience outlined above rather than legal skills for their pool of non-execs. This is particularly so in respect of having non-execs who have run organisations and few lawyers have.
Third, as a lawyer becoming a non-exec you are not there to act as the board’s legal adviser. The non-exec role is an influencing and oversight role not a doing or executive one.
There are two important aspects to this: the first is that, for a company of any size, there will be a Company Secretary who may well be legally qualified (possibly doubling up as the General Counsel) or, if not, someone who should have a good knowledge of company law. If, as a lawyer, you are lucky enough to secure a non-exec role it is really important that you don’t try and compete with the GC/Company Secretary – they are the board’s legal adviser – not you.
I recall speaking to a FTSE 250 General Counsel once where the board was about to appoint a lawyer to the board – he said he was dreading the appointment for just this reason. A few months later I spoke to him again and asked how the situation was working out. “Great” he said, “you would never guess in meetings that the non-exec had a legal background”. That was a compliment – the person concerned was an excellent lawyer but also knew when to take his lawyer hat off and act effectively as a non-exec.
Sure, having a legal background can be an advantage for the board in that you can act as a mentor to the GC and be someone he or she and other board members can discuss any legal issues that the company may be faced with (although it is worth remembering that with a legal expertise you will be judged as having a higher level of liability in respect of any legal issues that impact the Board). But that is a far as it goes.
The second aspect as to why your legal background may not be a valuable as you think is that if there is a material legal issue, the board and the company are likely to seek external legal advice. As such, it is a skill that can easily be bought in when and as it is needed.
So how can you improve your chances, as a lawyer, of securing a non-exec role?
Having set out the challenges, it is possible for those with a legal background to secure non-exec roles.
Here are a few ways you can enhance your chances.
As I outlined above, boards like members who have run organisations, and many lawyers don’t fit into this category. However, there are some that do.
So, for example, if you have been Managing or Senior Partner of a law firm or you have run a major department with profit and loss accountability, you should stress this experience. In these roles, you will have had to consider strategy, marketing and the like and so will be a useful addition to the board in being able to utilise this experience in guiding and mentoring the executives.
If you haven’t and are still early on in your career, try and direct your focus so that you can get this experience as it will be a useful foundation for a non-exec career. If you are working as an in-house lawyer, you might want to consider going to work within the business so that you acquire P&L accountability and the experience of running something.
Another strategy particularly if you have in-house experience, is to transfer across to other roles within the organisation which might give you a better chance of gaining the right experience for a non-exec role.
For example, I have seen lawyers move into the Chief People Officer role with responsibility for working closely with both the Remuneration and Nominations Committees. This is invaluable experience to have if you want to be a non-exec because it means you can serve effectively on these Committees and perhaps serve as a future Chair of one or both.
Indeed, in one of the board reviews I carried out, the Senior Independent Director and Chair of the Remuneration Committee was a former employment law firm partner who had specialised in advising Remcos and so was ideally placed to be both a non-exec and member of this Committee.
Another route for a General Counsel is to take on the Chief Risk Officer role. It is not necessarily an easy thing to do but if you can do this, you are well placed in sectors such as financial services to be a member of and/or Chair the Risk Committee which will give you a place on the Board as a non-exec.
You might like to stress your sector experience. If you are going to be a non-exec you are not being hired principally for your professional skills but more for your commercial ones and the knowledge of a particular sector. So, if you are a lawyer who specialised in property you might be attractive to a property company.
And it is worth adding that heavily regulated sectors - such as financial services or utilities - where there is complex regulation – are often keener than other sectors to have people with legal experience as non-execs, not forgetting of course that you are not being hired for your operational experience.
Equally, if you have worked closely with boards either as the General Counsel/Company Secretary or as an external adviser, make sure you highlight this. Working with boards can be complex and highly demanding so this too is valuable experience.
And a few final brief tips...
- Don’t leave it too late in your career. More importantly, you should never look on it as a retirement job. It is too important and demanding to view it in this way. If you are able to undertake a non-exec role with your executive career, then all the better but don’t underestimate the responsibility or the time commitment.
- As I said don’t underestimate the time commitment! If it says the role is 24 days a year, it will be far in excess of this if there is a crisis or any type of acquisition activity.
- Having a good head-hunter behind you who will champion your cause will help you significantly. Find one that specialises in non-exec roles.
- Understand and learn as much as you can on boards and governance.
- Attend one of the training courses on being a non-exec so that you fully understand what the role encompasses.
- Talk with current non-execs to understand their experience and perspective on the role.
- Finally network!
So, there you have it. I hope that I haven’t put you off – I have tried to end on a positive note! But it is best to have a practical understanding and approach for your search for a non-exec role. And good luck with your non-exec career!
Ian White is a consultant specialising in Board Effectiveness Reviews. Earlier on in his career he had 20 years’ experience in Executive roles (mainly General Counsel/Company Secretary). As well as his Board work Ian is an APECS Certified Professional Executive Coach and trained as a Team Coach with Meyler Campbell; and a CEDR Accredited Mediator. He is also a Founder member Board Effectiveness Guild and consults on leadership matters for in-house and private practice lawyers.
More information at www.ianrobertwhite.co.uk ian@ianrobertwhite.co.uk
