Board Search Principles
We support the AICD’s current target of 30% gender diversity in the ASX200 by the end of 2018. This is more than the initial target that the Davies Report laid out in the UK which was for the FTSE 100 to have 25% of their board positions filled by women by 2015. In 2015 it is worth noting that this target was both expanded, to the FTSE 350, and increased, to 33% by 2020.
In Australia, despite significant progress over the past seven years, we will not hit the AICD target of 30% female representation on the ASX100 boards by the end of 2018…however we are a lot closer than we were.
The Davies report proposed that the executive search community draw up a voluntary code of conduct to address gender diversity on corporate boards and best practice for the related search processes. At Watermark, we are committed to helping our clients increase the effectiveness of their boards and acknowledge the value that diversity can bring. We also strongly believe that the diversity conversation would benefit from shifting to being primarily about gender to being about diversity in a much broader sense.
The Davies report proposes that the executive search community draw up a voluntary code of conduct to address gender diversity on corporate boards and best practice for the related search processes.
The Report proposes challenging targets for improving the representation of women on the boards. Watermark Search is committed to helping our clients increase the effectiveness of their boards and we acknowledge the value that diversity can bring. We also believe that the diversity conversation would benefit from shifting to being primarily about gender to being about diversity in a much broader sense.
It is interesting to note that the Parker Report , commissioned by the UK government, which reported in 2017 and focussed on board ethnic diversity, has also set a target of One ‘Director of Colour’ (Despite the fact that this is term we do not tend to use in Australia the intent is clear) in every FTSE 100 board by 2021 This is extended to the FTSE 250 by 2024.
We accept the important role that executive search plays in supporting chairs and nominations committees as they take steps to increase board diversity, in both the private and public sectors.
The Watermark Board Search process, outlined below, lays out steps that we follow throughout the search process, from working with the client on the brief through to the final induction of the new board member.
Watermark Search International Board Process
- Succession Planning: We support Chairs and their Nomination Committees in developing medium-term succession plans that identify the balance of experience and skills that they will need to recruit for over the next two to three years to maximise board effectiveness. This time frame will allow a broader view to be established by looking at the whole Board, not an individual hire, and will help facilitate an increased flexibility with regard to candidate specifications.
- Skills Matrix: Where one does not exist, we will work with the Board to devise a skills matrix that is suitable for inclusion in the annual report. This helps identifies potential areas in which to concentrate when inviting new directors to join the Board.
- Diversity Goals: When developing a specific brief, we look at overall board composition and, in the context of the Board’s agreed goals on gender balance and diversity more broadly, explore with the chair if recruiting from a more diverse pool of candidates is a priority on this occasion.
- Defining Briefs: In developing the brief, we work to ensure that the appropriate weight is given to a broader range of skills and personal qualities. We encourage our clients to look at more than proven operational experience and be considering capability around innovation, digital capability, culture change etc. Doing so helps extend the pool of candidates beyond those with existing board roles or more conventional corporate careers.
- Long lists: When presenting long lists, we strive to ensure that there is a diverse long list. Some specific board requirements which might focus on specific experience can make that hard. All that means is that we look that little bit harder.
- Supporting Candidates: During the selection process, we provide appropriate support to candidates, in particular to first-time candidates, to prepare them for interviews and guide them through the process.
- Emphasising Intrinsic Value: As clients evaluate candidates, we ensure that we continue to provide appropriate weight to intrinsic factors, supported by thorough referencing, rather than over-valuing operational experience.
- Induction: We provide advice, and when required assist establishing the process, to clients on best practice induction and ‘onboarding’ processes to help new board directors settle quickly into their roles.