Non-execs say boards are not utilising them

ALMOST half of non-executive directors feel their knowledge and experience is not being used to the full, according to a new study.

Some 46 per cent of those polled in the Korn/ Ferry Whitehead Mann and KPMG survey felt under-utilised by the boards they sit on.

The research, which involved 300 non-execs from FTSE 350 companies and was conducted in January, looked into their broad experience as directors and the dynamics of the boardroom.

It found that 47 per cent of respondents felt executive board members did not usually see them as valued business partners, while one in five said they sometimes or regularly felt out of their depth in boardroom discussions as they had not been given adequate information.

The survey, which was conducted on behalf of the Good Governance Forum, found only 37 per cent of boards regularly consider how they could improve the quality of boardroom debate, while 39 per cent rarely or never address the issue. The remaining 24 per cent only consider boardroom dynamics at the time of the annual board review.

Tony Manwaring, chief executive of think-tank Tomorrow’s Company, which created the forum, said: “The survey results reinforce discussions with many non-executive directors that the range and quality of conversations strongly correlate with the effectiveness of boards.

“There is compelling evidence that major corporate failures result from behavioural and cultural weaknesses resulting in huge losses in shareholder value – effective conversations build and protect value and help businesses shape strategy, manage risk and build resilience.”

The study found that the most important characteristic of those boards that have effective conversations is the quality of the chairman, cited by 93 per cent of respondents. Eighty-eight per cent put the most value on board members having a real interest in the company and its activities and 75 per cent thought adequate preparation the most important thing. Over half (55 per cent) said board diversity led to effective boardroom conversations.