Directors ‘don’t trust executive teams to get things done’

The traditional approach marking the boundary between non-executive board directors and senior management is weakening, with more than a fifth of business leaders reporting that boards do not “fully trust” their executive teams “to get things done”.

An annual report by Heidrick & Struggles, the headhunter, involving a survey of more than 3,000 chief executives and directors, including at FTSE 350 companies, said that both globally and in Britain board members were becoming more operationally involved, leading to increased tensions.

Crossing the “traditional line” comes amid rising pressure on boards from investors, regulators, government, media and campaigners, as well as the spread of issues such as artificial intelligence and cybersecurity, global politics and environmental, social and governance responsibilities. It means that the “challenges and expectations on boards are ultimately greater than ever”, according to Kit Bingham, partner and head of UK board practice at Heidrick & Struggles.

In Britain almost three quarters of respondents said that board members were more operationally involved, with 22 per cent saying frequently and 49 per cent occasionally. Chief executives more often than directors reported operational involvement from the board.

The reasons stated by respondents overall varied in Britain, from a desire to know more about operations (43 per cent) to the chief executive requiring assistance owing to demands on their “bandwidth” (21 per cent). However, “most concerning” was the perception among 22 per cent that the board did not fully trust the executive team to “get things done”, the report said.

Alice Breeden, a regional practice managing partner at Heidrick & Struggles, said that “we’re increasingly seeing tension” in the boardroom system. “Boards are potentially spending more time perhaps in the operations and the executive world than they should, just to reassure themselves that they know what’s going on, that the executives have got it.”

Board operational involvement varied by country and sectors, with respondents in financial services least often reporting it globally.

Mark Cutifani, the former chief executive of Anglo American and the present chairman of Vale Base Metals, who contributed to the report, said the board’s role was “changing quite significantly, far more significantly than we probably appreciate. I think the board needs to play a more active role in a whole range of things, because you won’t have the experience and capacity in the chief executive to deal with these complexities. You’ll need some of it from the board.”