MORE stringent demands being put on non-executive directors following the financial crisis and the “shareholder spring” will have an impact on board diversity, according to headhunting firm Korn/Ferry.
It says growing demands of time and technical knowledge are “shrinking the available talent pool significantly” and making it harder for firms to engage directors from outside the industries they operate in.
A study by the firm found that over the last seven years non-executive roles have required a greater time commitment, a broader skillset and a deeper technical capability, combining to produce an expanded and more demanding brief.
Recent events highlight these trends, with the “shareholder spring” earlier this year demonstrating the increasing focus on stewardship by investors.
Richard Emerton, head of Korn/Ferry’s board practice in Europe, said: “We last looked at this area in 2005 and the evolution of the role has been swift and broad-ranging.
“While boards still prize traditional non-executive director qualities such as independence and experience, the additional skills and responsibilities identified in this new report are significant and striking. With far greater technical demands in areas such as risk, finance and technology being layered on, it is clear that the days of gifted amateur are long gone.”
The increase in demands for the role means individuals working as non-executives are taking on fewer directorships, making it even harder for firms to attract the right candidates.
Emerton said: “This change poses important questions about the size of the non-executive director talent pool, with major implications for the recruitment process and board composition, and potentially poses an even greater challenge to creating more diverse boards.”