The NED Debate – a lively debate with another slant on the issue of diversity in the boardroom

On Wednesday 16 October 2019, the Non-Executive Directors’ Association (‘NEDA’) and Smith & Williamson hosted the annual NED Debate, in association with Company Matters (part of the Link Group).

THE DEBATE MOTION

“This House believes tomorrow’s boards must not appoint the NEDs of today”

The third Annual Debate sought to explore why Boards still appear to be locked in a syndrome of appointing new members in their own image and the resulting consequences of too much "groupthink" around the board table. Equally, with continued examples of corporate failure arising from accounting and other scandals and the potential for companies to face fines for regulatory transgressions, the traditional NED skillsets would appear to be needed as much as ever.

The voting from the Floor held firm on the Motion, whilst it seemed to swing in terms of the discussion and the very strong arguments expressed on both sides.

In summary the voting at the start of the Debate was:

For the Motion: 68%

Against the Motion: 25%

Abstained: 7%

The concluding vote was:

For the Motion: 69%

Against the Motion: 27%

Abstained: 4%

Overall it was recognised that NEDs do a difficult job and expectations are now very high, however whilst a small number of corporate failures grab the headlines NEDs are still an essential element of good corporate governance.

The world we live in is changing rapidly and the boardroom needs to reflect that change with the introduction of a new breed of NED however, the question raised was the balance between bringing in new blood whilst not losing the input from experienced hands.

Is a “revolution” needed for change or should we build on the progress to date. Either way NEDs need to hone their skills and experience and keep relevant and up to date, especially in terms of areas such as training, education and personal development.