“The fact HR professionals are not instantly valued as great board material is utterly senseless; they should be up there in contention as NEDs on a regular basis.” Strong words from Advanced Boardroom Excellence chair Helen Pitcher. But although the supply of HR directors looking for NED roles still outstrips demand, the tide appears to be, slowly, turning.
“There’s an increasing focus on HR in the boardroom now because organisations are looking for a broader mix of leadership skills to be represented on the board,” says Anna Penfold, executive director at search firm Russell Reynolds Associates. “CHROs will innately bring a focus on any business decision to what it means for people. Slowly but surely the influential role an HRD can play is increasing.”
But given slimmed-down executive board representation, this often means in a non-executive director role. Penfold is seeing increasing numbers of HRDs taking on NED roles, particularly on RemCos and NomCos, but that is starting from a low base. However, she is less encouraged by not unusual cases where boards look to the HR function to “fulfil diversity in a transactional way”, by finding a woman to sit on their board.
Senior and Bekaert NED Celia Baxter, a former FTSE100 HRD, says she is also seeing more interest from chairs in having people from HR backgrounds as NEDs. “Chairmen see the value of having someone from an HR background on their RemCo,” she says. “And if you have a people-centric business, people are a big issue. But it’s not just about the people agenda – for example, HRDs with international experience can bring cultural awareness.”
To make HR directors attractive as NEDs, Pitcher says the HR profession needs to make “a conspicuous effort to overcome this perception of financial incompetence – the financial glass ceiling… Whether this is achieved through the profession developing a ‘senior HR financial professional certificate’ or some other creative means, it needs to be addressed.”
Overall though, Penfold is positive about the potential for more and more HR directors to find and add value in NED roles. “We are seeing all these pieces around a more educated, well-rounded board that recognises the role we can all play,” she says. “It’s a really exciting time for HR.”