NED recruitment
Ian Wright

Member Article

People of Vision, Non-Executive Directors and £1,000,000 Payouts.

The recent decision by the BBC to introduce more non-executive directors to the board in the wake of the furore over severance pay rings into sharp focus the role and influence of non-execs.

Their presence on any board is in several ways a safeguard: they provide advice based on experience, of course, but they also offer a view of things that only outsiders can give. In the U.S. non-execs are called Outside Directors for that very reason. And frenzied and unrealistic severance payments would certainly be an issue of concern to any non-exec. worth his or her salt.

They would ask the hard questions.

They would make suggestions based on sound business principles untainted by bias or the ‘wink-wink’ concept behind any golden handshake pay-off.

This is all very well and laudable, as long as the parameters for non-executive representation are rigorous and made clear from the outset. A non-exec isn’t a hand puppet. Nor is he or she a rubber stamp. If those are the roles envisaged for them before they are incorporated into the board then there’s a seriously myopic state of affairs that runs the risk of unfocused decisions, blurred and unsatisfactory outcomes.

Think of a Non-Executive presence on the board, then, as sharpening the vision of the company, offering clarity and focus, doing the metaphorical job of a pair of spectacles. Hard to understand, then, why the non-exec presence already on the BBC board failed to spot the dangers of overblown severance payments.

So what went wrong?

Again, think vision. Some people have reading glasses and distance glasses, and they use each pair according to the situation. Now, if you’re at a football match and try to watch the game with your reading glasses you’ll see a blurred and very indistinct version of the game. You certainly won’t appreciate the intricacies of the way the game is going, nor see the dangers lurking at the back through a leaky defence!

So it may well be with the BBC, where members of the board looked at the severance issue with the wrong glasses. With the right clarity of vision, with glasses that focus on distance, on longer term ramifications of any decisions taken, then the adverse publicity might well have been avoided.

Indeed, companies in similar situations need to undertake some serious research before making the decision to appoint a non-executive position. If you want the right pair of glasses to suit your vision you go to an optician.

Perhaps the BBC should’ve gone, not to Specsavers, but to NonExecutiveDirectors.com!

This was posted in Bdaily's Members' News section by Ian Wright .

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