Train those independent directors

London , 23 June 2003

A high-powered task force headed by Laura D'Andrea Tyson, dean of the London Business School, recommends continuous training for independent directors linked to regular processes to evaluate board performance.

“It is both common sense and a documented conclusion of research in behavioural psychology and organizational learning that people and organizations do not learn without evaluation and feedback. Yet most UK companies are not providing these essentials of learning to their boards," says the report.

The inquiry, commissioned by the British government, also urges corporations to recruit more women independent directors and bring to an end to a regime of “middle aged, white male corporate executives".

There is a long way to go. According to the review, only six per cent of independent directors in Britain are women, and only one in a hundred directors is from an ethnic minority.

Dr Tyson's task force, comprising a nicely balanced team of seven men and seven women, also says companies should recruit more independent directors from outside the country.

Noting that insurance group Aviva, chaired by former Volvo chief Pehr Gyllenhammar, has just added two non-British independents to its board, the task force said globalization made it a prerequisite that at least one director should be a foreigner.

Four members of the task force were high-profile headhunters, so it was scarcely surprising that considerable emphasis was placed on recruitment.

The report contained an appendix with advice from leading headhunter Julia Budd on how to impress those selecting independent directors. Among the tips:

• Concentrate on performing outstandingly well in your day job - boards want existing high achievers.
• Build your network, particularly among the investment bank community and other intermediaries.
• Get on the radar, through speeches, articles and TV appearances
• Improve your finance skills
• Do not take the first job you are offered.

For The Tyson Report on the Recruitment and Development of Non-Executive Directors click here