The Boardroom Path

[00:00:03] Ralph Grayson: Welcome to The Boardroom Path by Sainty Hird & Partners. I'm your host, Ralph Grayson, a partner in the board practice. In this series, we'll offer practical steps and useful perspectives for aspiring and newly appointed NEDs. Throughout its 30 year history, Sainty Hird has recruited senior board members across the City, Industry, the Public Sector and NGOs.

We're now also evaluating those boards, as well as coaching and mentoring those seeking to transition from an executive career into the boardroom. So we'll be speaking to some leading figures in the board advisory and NED world. Specifically, we'll seek their counsel about how and where to spend time and energy to make an effective transition into the boardroom.

The goal is to equip recent and aspiring NEDs with tips, tactics and strategies to be most effective and build a successful career as a board director. In the process, we aim to help you to think more about who you are, how you operate and how you can make this work in the boardroom.

My guest today is Elise Perraud, who is a board trustee with a background in risk management. Elise currently serves as the Chief Operations Officer at NEDonBoard, the Institute of Board members. A mission-driven professional body for non-executive directors and board members. Elise has extensive experience in board, non-executive, and executive, committee roles across regulated financial services, education, and other membership bodies.

Elise is a vocal advocate for sustainability and good governance and passionate about positive change and business for the common good. Elise, we've known each other a long time and I've had the pleasure of doing a number of Q&As with you over the years. But are particularly welcome to our podcast today.

Perhaps you'd like to kick off and just tell us a little bit about your own background and experience.

[00:02:05] Elise Perraud: Thank you for having me and it's nice to be on the other side answering your questions today. So, as you said, my background is in financial services. I served as Credit Officer and Chief Credit Officer in banking and then in insurance. I moved to NEDonBoard in 2018 working with boards and individual board members to achieve their objectives, by being more effective for securing a board role.

[00:02:36] Ralph Grayson: So mission and purpose for NEDonBoard. What was the North Star? What was the light bulb moment? In sofar, as you are one of a number of platforms, which will we'll come to in due course, what was really the purpose when you set out? What did you want to achieve?

[00:02:51] Elise Perraud: Yeah, so we were really set up to change how things were being done in terms of recruitment and with an objective of opening the boardroom to more professionals from diverse backgrounds. So historically you needed kind of what I would call the conventional background to enter the boardroom, and we thought actually a lot of individuals have value to bring to boards, and if they are trained, they can be of tremendous value contributing their skills and expertise.

So we really wanted to open the boardroom to more professionals and encourage more professionals to think about a board career, potentially, earlier in their career.

[00:03:32] Ralph Grayson: So if you profiled atypical NEDonBoard member, age, background experience, would they be a first time, aspirant NED, or would they be somebody looking for more professional development and coaching?

[00:03:44] Elise Perraud: So we are diverse in term of our audience and in term of our members. So we support the needs of professionals that have an executive career who want to become a non-exec and we also support the needs for professional development of established non-executive directors. So it's very diverse in term of background, in term of industry, but also in term of the stage where they are at in term of their board career, aspiring NEDs, as well as establish experienced portfolio NEDs and board chairs.

[00:04:20] Ralph Grayson: Fascinating. Something we've talked about in past podcasts, particularly with Graham Durgan at NEDA is the role of certification and as Graham's talked about in the past, the fact that it's almost harder to be a taxi driver than it has become a board member. Where does NEDonBoard stand as far as certification is concerned?

And I know you've launched the NED Diploma, you've introduced the Board Digital Leadership Certificate,and I think there's now a NED Accelerator Program. So perhaps you'd just like to spend a bit of time talking about the different parts of the NEDonBoard program or programs where does that fit in the model?

[00:04:56] Elise Perraud: Yeah, I think certification is very important and underrated when it comes to the boardroom. There's no requirement.When you want, for example, to be an accountant, you need to be professionally qualified. You don't have an equivalent when it comes to the boardroom, and there is value in getting a certification and it's really about understanding what the non-executive role is about and making sure that you will contribute and know your place from day one.

So I think it's very important for individuals to get on board and NED training when they start and it's also very important, as an ongoing professional development, just to remain relevant because things are changing all the time. So you need to remain up to date. So training, certification, is important at every stage. But definitely underrated at the start when you are transitioning.

A NED career is a different career than being an executive or being a consultant. It's a new job and nobody would start a new job without any sort of training. So if you've been doing marketing and you're moving into sales, very likely you will take on training. If you start to do public speaking and you have no experience of public speaking, you'll take training to be good at it.

Why, for when it comes to non-executive directorship, people don't have that same mindset and thinking that because they've had a successful executive career, that automatically they'll be a good NED? It's not automatic. So certification is important to know what you're doing. So we have different programs depending on your professional development needs.

The NED Accelerator is our kind of starter course for those that are aspiring to become board members, and in there we've kind of leveraged our years of experience as institute professional body membership organisation to design a course that has everything that aspiring NEDs need to know, need to do to be successful and secure a role. So that's NED Accelerator and that's the place where aspiring NEDs should go when they start the journey.

Then we have some training courses for those that have some gaps in knowledge. We have the Digital Certificate. It's primarily for board members that have a non-IT, non-digital, non-technology background to be able to contribute meaningfully when the digital topics or tech topics come to discussion in the boardroom and the NED Diploma, also a certification, a professional qualification, is meant for those that are on boards and are appointed for their expertise. So maybe that's your kind of cyber expert, IT expert that hasn't been exposed to the range of topics that boards to debate and discuss. So the NED Diploma will cover the full range of topics that come in the boardroom: strategy, audit, risk, sustainability, stakeholder relationships, and boardroom dynamics, very important.

[00:08:10] Ralph Grayson: And I think social aspect of NEDonBoard is also important as well. I always comment on these podcasts, most NED positions are not filled through search firmsand indeed perhaps not even formally. So maybe just talk through a little bit about how the social context of your network gatherings, the opportunity for people to meet like-minded, aspirant and existing NEDs and learn from each other.

[00:08:33] Elise Perraud: So networking is really part of the job of a NED. Whether you are at the very start of your career where you need networking to find a role, and it's not about being recommended by your friend. It's about finding that there is a vacancy in that you can apply. Networking is as important when you are more experienced because you'll have some specific needs, when you are on the board and it's good to have a network where you can recommend people. So networking, super important and that's part of membership. But membership, our membership, it's broader than just networking and it's just not about securing a role. There is more to it. Fundamentally, what we do is professional developments, whether you are at the start of your board career or far more experienced.

So for experienced non-executive directors, we have a number of targeted events to create a safe space to exchange on some complex situations that you face as an NED and where you find it difficult to discuss with your fellow board members for different reasons. So we create that safe environment where you can exchange and also advance, governance practices. So it's very important for listener to see that we are a non-executive organisation, institute, professional body, nonprofit, run exclusively for the benefits of our members aspiring, as well as, more experienced.

[00:10:02] Ralph Grayson: Yeah, I think it's important to note here that NEDonBoard is a not-for-profit.It does have a purpose. It is a membership. and to that extent I think it does stand differently from a number of similar type of platforms in the marketplace.

Development starts with knowing yourself and I always think that NED being an iNED is a label that is all encompassing, but is actually very misleading cause it could imply being a coach, it could imply being a mentor, a board advisor, an advisory board member,or a formal independent non-executive in a strict governance sense.

Can you maybe just look at that in terms of your membership, and the different types of profiles you see and how you perhaps think about advising, particularly aspirant NEDs, as to where they might fit on that journey?

[00:10:52] Elise Perraud: So when you are an aspiring NED, the first thing you need to do is think about your value proposition, but then match it to your target boards and your target boards means the type of non-exec role you are aiming for. So as part of defining this value proposition, what you're solving for, you have to determine how you want your non-executive services to be delivered and whether you will enjoy coaching, whether this is about being a mentor, a board advisor, an advisory board member, or a non-executive director, and we have a mix in our members and sometimes it's not a clear cut. So if you have a portfolio of roles, you can be board advisor for a startup, or you can also have some formal non-executive director role.

So the beauty with a portfolio career is you can do whatever you want and you can have a really diverse portfolio with established companies in term of governance and working with startup founders and delivering non-executive services in a different way. For some people, it's very clear they don't want to be NED, they enjoy the advisory, strategic advisory, side of things, and they don't want to have the fiduciary duties of a formal non-exec role. So that's part of the work, the homework that you need to do when you start your NED career is find what works best for you and answer these questions about the environment that will get the best out of you.

[00:12:28] Ralph Grayson: So as a peer group membership, how does that work at NEDonBoard then? How do you help people think about who they are? Think about their personal brand, what they want to do, why they want to do it?

[00:12:40] Elise Perraud: So that's how we've designed the NED Accelerator program, helping people through various guides, worksheets, presentations to solve these questions about the environment that will get the best out of them. So we have various interviews and we show them the branch, the spectrum, of non-exec roles available.

What we find is a lot of our members have commercial private sector background, and they want a NED role in the private sector not understanding, there are a lot of exciting roles outside what they've known and there is actually a lot of value in being able to transfer your skills in a given context to another context.

So we do have members that have a hundred percent private sector experience that secure public appointments and find a lot of excitement and fun in helping shape government policies, for example.

[00:13:41] Ralph Grayson: So skills, experience, knowledge, quite easy to have that a tick box. Think about where you might fit, adding most value on a board.

But that the whole area of board behavior, board practice that difference, fundamental difference, between being an executive and a non-executive director. Let's draw it out from that newly retired, or leaving CEO, who suddenly feels that their next career step is into the boardroom? How do you help them think through that change in board behavior, being part of a peer group team on a board?

[00:14:18] Elise Perraud: It's part of the various training programs that we run. So within the NED Accelerator, we have a number of interviews from people that have made the transition and explain some of the challenges that they have, not understanding initially the role and getting to operational potentially, so they are feeding back their, experience. In the NED diploma, we go deeper into boardroom dynamics and potential toxic behaviors, and then how you navigate the situation when you are a non-executive director. It's also through our events and networking where we create this platform to exchange.

[00:15:02] Ralph Grayson: Board dysfunctionality is something everybody talks about and nobody can quite accept until they've been in the boardroom, how many different manifestations there are of that dysfunctionality. But how do you manage to, or how do you attempt to, incorporate that then into the program?

So you've got an overbearing chair, you've got an overbearing CEO. What are those practical experiments work studies? is that looked at in a formal way or is it done through discussion groups? How do you try and approach that?

[00:15:29] Elise Perraud: Several ways. So first I'd like to say that we run a survey and 80% of respondents said that they have experienced dysfunctional boards. So it's unfortunately, quite common.

[00:15:43] Ralph Grayson: It's a frightening statistic.

[00:15:45] Elise Perraud: Hence the need for certification. So the way we've address, how can we help all those respondents that have experienced dysfunctional boards, there is an element of understanding what makes boards effective and having like a framework to understand the different drivers of bond effectiveness and then it's discussion groups to understand when you have, like, your typical situations will be complacency or like a tense relationship between maybe the chair and the CEO. How do you address the underperformance of a NED?

So how do you navigate those situations? And there are a number of tools and practices that you can use. It's part of what we are proposing as part of our training courses, but also just as part of membership. For me, for anybody serious about becoming a NED or being a NED and wanting to do a good job, the starting point is really our membership. It's a no brainer.

It's an affordable investments and you'll immerse yourself and gain a lot of skills and lots of knowledge taking from the experience of others and making sure that you learn from it and don't do the same mistakes.

[00:17:03] Ralph Grayson: So you've been around for 10 years plus. So during that time, we've seen size of the public company market, half fewer IPOs, different regulatory treatments of boards, but I think it's now a much more complex choice for board members to think about what type of board do I sit on. Early stage, series A plus more as a coach, a mentor with the founder, through then representing as an investor director, maybe for VC investor or PE investor and that's a very different role, different expectation, different style, rhythm, vocabulary of being a board member.

[00:17:40] Elise Perraud: Sure. Yeah.

[00:17:40] Ralph Grayson: Than it is being on an AIM board, a 250, 350. How do you try and think about that or help your members think about that of what type of culture, what type of purpose do I want to be solving for?

[00:17:54] Elise Perraud: So it's through resources, just bringing knowledge. So we have targeted events. So for example, we've had events around, Housing Association, NHS Trust, we talked with Sir James Wates about family businesses, employee owned trust, so we have some deep dives and we offer that obviously to members so that they can have an informed view about the type of role that's available to them.

We've done lots of work with the Commissioner for Public Appointments encouraging people to think about public appointments because there is this view that I've been in the private sector, I'm not interested. There are some interesting roles and I think the beauty, what I like about the non-exec career, is it's about your transferable skills.

So industry knowledge is important, but there is also value in transferring your knowledge from one industry to another. So you know financial services very well. It's a very regulated industry. You can take that knowledge to another regulated industry. So there is transferable skills and you can add a lot of value to a board outside your industry and people need to think about that.

[00:19:14] Ralph Grayson: I know you've got a great slide that looks at the maturity of businesses and the correlation with the type of board they need. I still find a bit of pushback from people, particularly who've come from an executive PLC background that in some way working on the board of a private company is not quite the status and stature that they expect.

I just wonder what your thoughts are on that. Notwithstanding, of course, you've got to offset working for an earlier stage company. There is that reputational risk, just the statistical chance of the company failing is that much greater. But where do you stand on that?

Traditionally, we've encouraged aspirants to, go on a charity board or do something pro bono or government work to learn about governance. But I think increasingly now being on an earlier stage board is much more relevant and indeed, perhaps even more relevant, in terms of how somebody can contribute on a board.

[00:20:05] Elise Perraud: When you think about the passway to non-executive directorship trustee role, definitely. Because at the end of the day, when you are a trustee, you are a non-executive director if the charity is incorporated. But advisory boards are also another way into formal non-executive directorship, and actually we have quite a few of our members that have secure advisory board roles through that on board and those roles have evolved into formal non-executive directorship as the company became more mature.

So that's a path that exists even within the same company. But advisory board is something we encourage our members, aspiring NEDs to consider.Typically, you join an advisory board of a younger company, you work with an entrepreneur, business owner so that's the start. But you contribute on a range of topics. So it's very relevant in term of building your non-executive career.

[00:21:02] Ralph Grayson: And in terms of compensation, of course, a public company is much more about the fee whereas an earlier stage company, is much more about stock participation which may be more or less interesting depending on your personal circumstances. We can't not talk about Trump bonfire of the acronyms. We talked a little bit earlier about JP Morgan's statement. Today they are changing references to DEI Equity to DOI becoming Opportunity. Working from home, ESG, there's a lot of things to talk about, but the one thing that is certain is that the rails that you and I have talked about in terms of board governance for the last five years have changed, particularly since Trump arrived.

How are you trying to factor that into how you think about board members approaching some of these issues?

[00:21:52] Elise Perraud: I would say nothing has changed in our approach. DEI or whatever you want to call it or rebrand it. It's a business imperative for a lot of organisations, because you want to retain your staff you have. It's kind of managing your stakeholders, so definitely your employee, but also your customers.

So I think DEI needs to be considered as like a strategic imperative to remain competitive. So regardless of the international agenda, think about your business and your stakeholders

[00:22:35] Ralph Grayson: Stakeholders keyword, obviously there.

[00:22:38] Elise Perraud: Exactly and the regulators the expectations in your industry. But there has been a lot of research about the impact of diversity on boards and Trump or no Trump, those research papers reports, I mean there is data backing the benefits of diversity of thinking. But it's diversity of thinking, it's not necessarily how you look. It's really how you approach issues and the quality of the discussion thatyour different backgrounds allows. So this is true diversity.

If you are, and I can say that as a woman, if I'm on a board and have the exact same background as the others on the board. Yes, I'm a woman, but the way I will approach the board papers and contribute will be the exact same thing.

So the value I bring as a woman, it's diminished. So diversity of thinking is what you want. There's nothing worse than group think because the quality of the discussions you have in the boardroom gets very low and there is complacency and that's typically when things go wrong.

[00:23:51] Ralph Grayson: So let's turn diversity to age. So one of my earlier guests, Patrick Dunne's, written a fantastic book, encourage again everybody to read it. Which talks about five generations. First time, we have five generations in the workforce. How, if at all, has your membership changed in terms of its age profile?

How do you think boards need to be thinking about this generational shift? And to what extent are you seeing boards think more actively about the composition of their skill matrix relative to understanding who customers are understanding the application of cyber and AI and some of those themes.

[00:24:33] Elise Perraud: That's how it start is really the skills that you have around the table and given your strategy what skills you need to achieve and be successful with the implementation of the tragedy and and achieve your mission? You know, when it comes to digital, your typical board member won't be digital native.

So you need to think about bringing younger NEDs and that's just like reality. It comes, you know, from your strategy, the skills you have in the boardroom and age is just a consequence of this work around strategy and skills to achieve your objectives.

[00:25:14] Ralph Grayson: And young people can learn from old people and old people can learn from young people. Are you finding that in your social groupings with your members?

[00:25:22] Elise Perraud: You do have reverse mentoring. It happens all the time. So in our membership, we have young NEDs and we do have them because we encourage professional to start their NED journey early. Start early, you have a longer career trajectory and just more opportunities as you build on your non-executive experience.

So there is mentoring and coaching, like informally between members, those that are experienced NEDs that havemoved into non-executive directorship at the end of their executive career and they are mentoring those younger NEDs that are typically aspiring to a first role and then you have like reverse mentoring with those younger NEDs helping understand some issues that, let's say older board members, they haven't been exposed to those issue to the same extent.

So just think our membership is diverse when it comes to age and we have quite a few members, late thirties, early forties, that are starting their NED career typically with a charity role so they can manage their time with a full-time exec role and it's refreshing because this is also coming back to your questions about DEI and are you going to solve for better diversity, like visible diversity? Our solution be to build a pipeline and you start with bringing younger NED into non-executive directorship and you build pipeline of the next generation of leaders.

[00:27:03] Ralph Grayson: So next generation leaders. I think that's a fascinating subject.

Ollie at Nurole has talked on his podcasts about pop-up boards. So advisory boards being formed to deal with a particular situation and then collapse and move on. Board Apprenticeships are something that we're now hearing about here where dare I say more farsighted, heads of talent and HR are recognising the additional quality of a senior member of their executive team having board experience and being a more rounded executive manager when they come back into their company. Trends, themes around that? Some of the problems, some of the hurdles you see around this subject?

[00:27:43] Elise Perraud: Yeah, so I fully agree and we have like plenty of example within membership of executives that have accelerated their executive career through securing typically a trustee role and understanding better what it means to sit in the boardroom. They understand better the papers, the type of information you should receive to make decisions when you have decision making power as a NED.

There is a trend also for advisory board, but I will caution that you have different type of advisory boards. So you'd have the advisory boards of startup, scale up businesses that aren't mature enough to have a formal board of directors, and you can really transfer the skills you're going to gain from those advisory board into a formal NED position. If you join a specialised project specific advisory board it's likely that your remit will be narrower than like a board role. So, transferable skills will be less relevant than a startup boards where you will probably be involved and work with the founder on strategy, recruitment, processes, and a number of issue, risk, like set up the whole thing.

On project specific advisory board, you are here for a limited amount of time and to work on a specific project and you are reporting to an established governance structure, so you are not here for the long term. So slightly different angle and people need to understand obviously when they're joining an advisory board. Check the terms of reference, check what is expected of you, because even if being an advisory board member is not as formal, well, it's not as formal as being a NED, you still need to have terms of reference and you need to know why you are here and what is expected of you.

[00:29:39] Ralph Grayson: But a great stepping stone and building block in terms of building that NED CV.

[00:29:43] Elise Perraud: Exactly, especially for the younger NEDs and also for those that haven't prepared necessarily their transition earlier in their career. When you stop your executive career and you decide, okay, now I want to be a NED. If you've never been a NED before, don't expect that transition to be quick and have those experiences on your CV, trustee, advisory boards. So at the time where you want to go portfolio career, then you have already some experience.

[00:30:14] Ralph Grayson: I think that's great advice. Try before you buy, right? Not everybody is cut out to be an NED.

[00:30:20] Elise Perraud: Exactly, and it's better to have the answer. The earlier, the better.

And the importance of joining a NED organisation, going on training, so you understand what you're getting into, and sometimes we have members or people that do the training to realise, well, actually what I want to do is coaching.

It's different than non-executive directorship, but at least they know.

[00:30:44] Ralph Grayson: So what surprises people? So when they come to your social events or they see you in the corridor and say, that was a great event. But gosh, I was really surprised by this or I didn't know it was going to be that.

[00:30:55] Elise Perraud: First comment is how enjoyable this is. Like the networking, the events, people have still an expectation of formality when it comes to non-executive directorship. It's not anymore, I would say.

So they are surprised by the fact that it's fairly informal and quite and fun. Yeah, exactly. The other element is how hard the job of the NED is. I think sometimes they underestimate the range of topics they will have to discuss in the boardroom, and they fail to understand that you are recruited for a specific expertise, but you are expected to contribute on a range of other things. So you can't turn to the risk experts when there is a risk discussion. It's the board operates as a collective, as a team.

So sometimes it's a surprise to them because they thought, oh, I'm just here as the accountant or the, audit guy on the board. But actually I need to have a view on remuneration. I need to have a view on our succession plans. So it's a surprise to some of them.

[00:32:06] Ralph Grayson: And if you're going to do it properly, it takes a lot of time. Whenever I look at a job spec and I see how many days are designated. I double it, at least. Cause if you're going to read the board papers properly, you're going to go to the dinner the night before the board meeting, you're going to do your homework, you're going to talk to investors, suppliers, other stakeholders.

It's double or triple whatever it says on the packaging, right?

[00:32:32] Elise Perraud: And it's regardless of the type of roles. So this applies to school governor roles it applies to all non-exec role type. Whatever is written, double it. You have what we call the unexpected, external crisis, like COVID, internal crisis, CEO leaving. So you have to put the time and efforts at a time where it may not be convenient.

So make sure that when you accept a role, you have the time to discharge your duties.

[00:33:03] Ralph Grayson: So let's try and pull this together. Apart from joining NEDonBoard, clearly the crucial membership to be involved in, what else should our listeners be thinking about in terms of both their personal profile, their positioning, and how and when to think about making that time commitment?

[00:33:23] Elise Perraud: Yeah, I think for those listening is start with membership to understand what you're getting into and if this is really a direction you want to take. Get training, that's critical to know what you're doing, be good at it and also to protect yourself. There are risk associated with the role. You need to understand those risks and you want to make sure you align that this is what you want to do.

So, training very important and making sure you've done your homework in term of the environments that you want to work in, or the combination of roles that you want to achieve given the time you have. Given, like maybe financial considerations. You need to audit a lot of things. It's your strengths, your value proposition, the type of NED roles you want, and like those additional consideration around time commitment, conflict of interest. So start with this homework and invest upfront so that you don't waste time applying for roles or accepting a role that actually it's not the right role for you at this stage of your career. Or just not the right role for you. So the more time you invest upfront, the better.

[00:34:45] Ralph Grayson: The fit is everything. Getting a board role is not spinning out as many CVs as possible to as many job specs as possible. Get it right. Spend time. Think about it. Do your homework. All great advice. Anywhere beyondthe great NED content that you put out on LinkedIn, any books, other podcasts, blogs?

[00:35:07] Elise Perraud: It's all about what our members will publish. So we get a lot out of our members discussing with members, but also what they post, when they write for our blog. So this is really a really good source of information because they are the one in the boardroom experiencing the issues.

So this is like the primary source, not books, the experience of our members.

[00:35:38] Ralph Grayson: So how do they come and find you?

[00:35:41] Elise Perraud: LinkedIn, our website, we have a number of partner organisations as well. So that's mainly our to who find us.

[00:35:48] Ralph Grayson: Excellent. Elise, thank you so much for your time. Some great content and advice in there. I hope our listeners found it useful.

[00:35:55] Elise Perraud: Thank you, Ralph, for having me. A pleasure.

[00:35:57] Ralph Grayson: I hope that you've enjoyed listening to this podcast and have found it helpful when thinking about how to approach your own path to the boardroom. If you would like to push this a little bit further, Sainty Hird runs a bespoke one to one programme designed specifically to this end. For more information, please visit our website, saintyhird.com, follow us on LinkedIn, and subscribe to the Boardroom Path to receive new episodes. Thank you for listening.