The Future Boards Scheme

HANDS-ON, PRACTICAL DEVELOPMENT OF HIGH CALIBRE FEMALE EXECUTIVES AT A FRACTION OF THE COST OF OTHER LEADERSHIP AND MANAGEMENT PROGRAMMES.

The 30% Club UK, the UK Government and Board Apprentice have recently launched the “Future Boards Scheme”, giving senior women a unique opportunity to get board experience to progress their careers to the next level. The scheme is aimed at FTSE 350 companies, SMEs and other major organisations. Several major companies and well-known public sector bodies have already signed up to take part in the scheme, including 30% Club members, Aviva and Hammerson. The 30% Club believes the scheme has the potential to significantly grow the talent pipeline of women executives by giving women 12 months’ experience on a major board. For more information please contact: Francoise Higson.

“Boards with blind spots are boards with potential issues. As shareholders we expect to see these blind spots addressed and boards strengthened through diversity."
- Colin Melvin, Hermes EOS


The Concept


The Future Boards Scheme gives talented, senior women board-level development opportunities on the boards, or subsidiary boards, of other businesses.

It represents a practical step to support the Hampton-Alexander Review’s focus on increasing the representation of women below board-level in the senior layers of FTSE 350 companies by giving them direct, first-hand experience of boards, as well as increasing the pool of talent of non-executive directors.

The concept has been proven through a number of successful trials run by UK Government Investments, Board Apprentice and the Institute of Directors in New Zealand. All three schemes have been very well received by participants and the public and private sector boards who have hosted them.

Now UK Government Investments and Board Apprentice are working together with the 30% Club to make the scheme more widely available across the public, private and third sectors.

Diversity is a business driver and by embracing differences we can then realise the maximum customer and shareholder benefits. As a result, there is a significant business need to improve the diversity of perspective, outlook, experience and thought that high-calibre, well-qualified, diversified talent can bring.


The Model


The scheme offers a development opportunity seeking to give individual participants the fullest possible board experience short of being a director. They take part in all day-to-day aspects of the board, with access to board papers and regular opportunities to offer their views in meetings when invited. They are encouraged to participate in sub-committees and offered the same induction and training given to non-executive directors and/or executives.

To ensure that there is no confusion about their legal status, they are not appointed, nor do they act as directors, nor are they paid. They have no voting rights, do not instruct nor direct the board in any way and are not part of the formal decision-making process. They do not form part of the quorum of a board meeting and are bound by the host board’s confidentiality rules. This is formalised in three legal agreements between Board Apprentice and the board, Board Apprentice and the candidate and the board and candidate (through a rider to the appointment letter).

Participants are not paid for their contribution and remain employed by their own company throughout. It is left to the board’s discretion to determine whether they can pay travel and subsistence expenses as they would usually for a board member and if whether to include the participant in their D&O insurance.

A good match benefits both the board and the participant, so boards will be asked what skills/experience they are looking for and matched with carefully-selected candidates. Individuals will not be matched with boards where there is a conflict of interest or a chance of them gaining a competitive advantage.

Each opportunity is typically for 12 months (one full board cycle) but can be ended at any point by either the host board or the participant. In exceptional circumstances, it can also be extended by mutual consent.
 
In the first instance, the scheme will focus on talented female candidates who are “board ready”, but who would benefit from the additional personal development, experience and direct access that the scheme brings. However, the intention is to look beyond this cohort of candidates to identify other rising stars in the female executive talent pool who will form the pipeline for the future.

The model has been designed so that in the medium term it could be expanded beyondfemale candidates, to improve broader diversity on boards.

“Different experiences, different perspectives and a new role to play have all added to the participant’s experiences.”
- Adam Lawrence, Chief Executive, Royal Mint


Benefits


Benefits for Participants

  • An opportunity for talented women who have no or minimal remunerated board
  • experience to accumulate credible experience for future non-executive or executive roles.
  • All five participants in the first round of the UK Government Investments pilot said they had
  • benefited from the scheme and would recommend it to others. Two of the five have already
  • been appointed to other organisations’ boards as independent non-executive directors.
  • This has been reinforced by the feedback from the Board Apprentice scheme.

Participant contribution – own time to prepare for board business.

"It is simply the best individual development action I have ever undertaken in my career."
- Participant, National Nuclear Laboratory Board

Benefits for Host Boards

  • A fresh perspective and viewpoint in the boardroom.
  • Demonstrating commitment to diversity and improving gender balance.
  • Helping to develop a deeper pool of talent for tomorrow’s boardrooms, giving more talented women the necessary additional experience to successfully apply for directorships, and ultimately increasing the proportion of women appointed to full UK boards in the future.
  • All five host boards in the UK Government Investments pilot felt that they had benefited from hosting participants and would recommend the scheme to other boards.

Host board contribution – addition to D&O insurance and payment of usual board expenses at board’s discretion.

“It has been a win win for NNL and the participant."
- Andrew Mathews, Chair, National Nuclear Laboratory

Benefits for Employers

  • Hands-on, practical development of their high calibre female executives at a fraction ofthe cost of other leadership and management programmes.
  • A means to tackle under-representation of women at senior levels in their own organisationand position the company as an organisation committed to diversity.
  • Helping to develop a deeper pool of talent for tomorrow’s boardrooms, givingmore talented women the necessary additional experience to successfully apply fordirectorships, and ultimately increasing the proportion of women appointed to full UKboards in the future.
  • Employers involved in the pilot all thought the scheme had a positive impact, with theiremployees contributing more to the executive team, bringing back examples of bestpractice and growing in self-confidence.

Employer contribution - £5k per participant placed and circa 12 days of the participant’stime per year. This is significantly less than executive development courses at leadingbusiness schools which cost £7k - £13k for 1-2 week courses.

"The participant has grown in self-confidence, breadth and insight since taking on the role."
- Nigel Keen, Chair, Oxford Instruments


How to join


The model will be to place board-ready women from the FTSE 350 or from equivalent large, complex organisations on each other’s boards, or subsidiary boards.

To participate in the scheme, 30% Club Members will need to do three things:

  1. Offer to host a participant on their own board, or a subsidiary board.
  2. Propose a high calibre candidate to be placed on another organisation’s board, or one of the organisation’s subsidiary boards.
  3. Pay a contribution towards the scheme of £5k for the placement of their candidate to cover the scheme administration costs on a not-for-profit basis.

Please contact francoise.higson@anz.com for more information.
Please download our scheme brochure here.


FAQS


What is the problem we are trying to address?

  • Women (and minority groups) are still under-represented on the boards of major companies and equivalent organisations in the UK. Some progress has been made, particularly in Non-Executive Director (NED) appointments, but there is more to do especially as regards the executive and non-executive pipelines.

 

The Future Boards Scheme aims to:

  • directly address current barriers to progress faced by women with board-level potential by giving them relevant practical experience;
  • help businesses and organisations develop their talented female staff more quickly in preparation for board-level responsibility; and
  • support the Government’s wider policy to tackle under-representation of women on boards in the UK.

 

Why does this matter?

  • Boards make better decisions where a range of voices, drawing on different life experiences and representing the full range of talent and customer bases, can be heard.
  • Evidence shows that companies with strong, diverse representation at board and top management level perform better than those without*.
  • More widely, it is important for our economy that businesses draw on the best talent from as wide a talent pool as possible.

 

* Diversity Matters, McKinsey & Co, 2014; Gender Diversity and Corporate Performance, Credit Suisse Research Institute Report, 31 July 2012; The Bottom Line: Corporate Performance and Women’s Representation on Boards, Lois Joy, Nancy M Carter, Havery M Wagener, Sriram Narayanan, Catalyst 2007.

 

So what’s different about this initiative?

  • There are some good initiatives out there which aim to help address this problem, including mentoring/sponsorship schemes, training and development programmes, and networking events and organisations.
  • But Future Boards is a co-ordinated, pan-UK initiative (drawing on the experiences of three strong partners) to directly place candidates in to training positions on the boards of commercial, public sector and other organisations to give them first-hand board experience.

 

Surely offering this to women only is discriminatory?

  • No. Participants are not being appointed as directors or paid for the role. It is a training and development opportunity, involving proportionate measures to try to reduce disadvantages currently suffered by talented women with director potential, and to try to increase their representation on UK boards.
  • Our view is that this amounts to lawful positive action under the Equalities Act 2010.

 

What about the Companies Act 2006 – won’t participants be directors?

  • The role is of a trainee, with no decision making powers or voting rights.
  • Participants do not count towards the quorum and they should not dictate or influence board decisions.
  • That said, the scheme aims to give them the fullest possible board experience. During the successful UKGI pilot scheme, both participants and host boards said they felt the greatest value was gained when participants took part in discussions where appropriate. This is reflected in the experience of Board Apprentice.

 

How are you going to ensure the best people are selected for this?

  • The majority of candidates have been put forward by major organisations from their existing talent programmes – in effect, candidates who those organisations believe fit the criteria of being “board-ready” or showing very high levels of potential.
  • In addition, each candidate will have gone before a preliminary selection panel to confirm their skills, experience and qualities. Board Apprentice will work closely with host boards to find suitable “matches” between candidates and host organisations.

 

Why should I release an employee for this scheme?

  • It helps develop your senior female executives, strengthens your own talent pool and helps develop a wider talent pool for the UK more quickly than has previously been possible.
  • Any candidates you put forward will gain a first-hand, practical understanding of how boards work and will bring that knowledge and understanding back to their workplace.

 

So what’s the benefit to my board?

  • The participants are all high-performing women who have been selected as having board potential. They will bring their expertise, skills, experience and a fresh perspective to your board.
  • Board Apprentice would match your needs with the skills that specific participants could bring.

 

Why should I have a stranger on my board – surely that’s rather risky? What about commercial confidentiality?

  • Participants are senior executives who in many cases are working full-time in commercial and other organisations and are subject to confidentiality and other contractual and/or governance requirements.
  • Participants are bound by the host board’s confidentiality rules (like external NEDs), and we recommend that the host includes them in any appropriate induction process.
  • This is formalised in the scheme’s legal agreements and it is for the host organisation to decide whether to also include their participant in their D&O insurance.
  • 14 October 2016

 

What is my £5k annual contribution used for?

  • The scheme is run by Board Apprentice on a not-for-profit basis, with the £5k contribution per participant covering the cost of administering the scheme.
  • This compares favourably with the £7k-£13k cost of 1-2 weeks of executive education at a business school for a development or strategy course.
  • If any surplus income is generated, this will be reinvested in the expansion of the Future Boards Scheme or other similar schemes.

 

What if our main board would not be suitable for a scheme of this kind?

  • While the scheme targets main boards, during the pilot we also identified a number of suitable subsidiary boards that could also host a participant and – critically - could also offer the appropriate level of practical experience.
  • Where your organisation has multiple companies/boards we would be happy to discuss the options.

 

Who else is taking part in the scheme?

  • The following organisations took part in UK Government Investment’s pilot version of the scheme: UK Green Investment Bank, Ordnance Survey, Nuclear Decommissioning Authority, Royal Mint, National Nuclear Laboratory, Energy Systems Catapult, UK Atomic Energy Authority, Competition and Markets Authority, Intellectual Property Office.
  • The Board Apprentice scheme has been running for two years in the UK and has included: Kennedy Wilson Europe Real Estate Plc (FTSE 250), JP Morgan Claverhouse (FTSE 250) and other listed and unlisted companies of a similar size.
  • Board Apprentice and The 30% Club, with Government endorsement, are now rolling out a dedicated version of the scheme across the UK. We are already actively discussing participation with FTSE 350 Boards and equivalent organisations across the public sector and elsewhere. Aviva and Hammerson are the first two 30% Club members to sign up to the scheme. 

 

Who is the scheme available to? What if I am a smaller organisation? What if I am an individual?

  • The Future Boards Scheme is open to all FTSE 350 and equivalent large, complex organisations.
  • Board Apprentice, who are administering the scheme, have a broader mission covering diversity beyond just gender (ethnicity, age, disability, thought, experience, etc.) with organisations of all sizes. If you are interested in getting involved, particularly if you can provide a host board, please contact Board Apprentice directly.
  • If you are an individual who wishes to be a trainee on a board, please visit the Board Apprentice website for details of forthcoming selection rounds.

 

Who are the organisations who are delivering the scheme?

  • The 30% Club are a campaign organisation seeking to improve gender balance at all levels of organisations and develop a diverse pool of talent.
  • Board Apprentice is a not-for-profit organisation which has been running an apprentice scheme for senior executive board-ready talent for the past two years in UK, Jersey, Cayman Islands and other territories.
  • The Future Boards Scheme has been endorsed by the Department for Business, Energy and Industrial Strategy. It was first piloted by UK Government Investments, the Government’s centre of excellence in corporate finance.