Thinking about working as a non-executive director in Jersey? Kevin Keen, Interim Leader, Executive Director, and NED explains how to be an effective director with offshore boards today
What distinguishes the role of the NED and how do you differentiate when working in different roles for different entities?
Non-executive directors are there to oversee management, to support and constructively challenge when appropriate. Of course, all directors, executive and non-executive, have the same legal responsibilities. How NEDs perform to meet their responsibilities is different, but through doing both jobs over the years I have seen good and bad examples of being a NED and learnt from both. I also learned a lot as a Chartered Director so a fair bit of theory and lots of practice has certainly helped.
What are the biggest changes you’ve seen in the Boardroom during your career? How have you changed to meet them?
From a non-executive point of view the expectations and standards have increased massively. My first experience of the board room was as company secretary of a local public company, over 30 years ago. Even then, it was changing. My predecessor used to read the minutes out loud and then the board would deal with each share transfer. There was not much time for anything else, other than lunch! When I started, things became much tougher. There is nothing better to remind you about your responsibilities as a NED than a load of unhappy shareholders at the AGM! Good executive directors recognise the value NEDs bring today and Chairs take a more active role in running boards properly.
What is the single most important factor in being an effective NED and why?
For me that is not about the qualifications it is about integrity and taking a long-term view. I only get involved with companies where I am clear about the purpose of the company and trust my colleagues. Process is crucially important, but people can override this so I want to be part of a team that want to do the right thing as well as doing things right. Of course, keeping up to date with developments in corporate governance and the law is important when working as a non-executive director in Jersey, and a professional qualification ensures you do that. However, most requirements are merely codifying what an honest competent person acting in the best interests of the company should be doing anyway.
If you could change one aspect of current governance in Jersey, what would it be and why?
Removing the temptation to allow process to be there for its own sake rather than the outcome it is attempting to deliver. For example, when compliance people talk about Health & Safety legislation, they try to scare people into compliance due to the legal penalties. Instead, we should consider the human impact, and how much suffering someone’s death could cause. How would you live with that? That is the bigger motivator for me. So, more focus on principles and purpose and perhaps less on process for its own sake.
Is the process of recognising, evaluating, and managing risk for entities well understood at board level in Jersey? What could NEDs do to improve it?
In my experience it is, but there is a constant need to keep it real. We should not turn risk recognition and evaluation into a tick box exercise. Most of us are in business to take risks on behalf of shareholders so it is about having people around who can ensure they are evaluated and managed. Therefore, diversity at board level is so important, not just gender, but experience and of course age. A diverse board with a culture that encourages honest debate can make a huge difference to risk management.
How have the Boards you sit on responded to the challenge of COVID-19?
There were some very comprehensive risk registers, but I don’t think any specifically called out a Covid like pandemic. This is a failing given there were plenty of warnings of it. But they all reacted quickly and with one exception have come out the other side in better shape than they went into it. I doubt there are many directors, executive or non-executive, who have not learned a lot from Covid. And not just how to turn the mute button off!
From your perspective, what effect is the civil penalties regime having in the boardroom and on NEDs in particular?
I do not sit on any boards that are regulated by the JFSC. However, from my experience board members are always extremely conscious of any potential personal exposure and act accordingly.
The JFSC is becoming more active challenging boards to demonstrate a broad and effective range of skills, expertise, and experience. Do you think this is an area for improvement or a matter of documentation?
Not for me to answer, other than as a citizen wanting to maintain Jersey’s excellent reputation as a well-regulated jurisdiction. But, a focus on principles as well as process, the right boardroom culture and all-important diversity will be key. I am also anxious to see more leadership training in Jersey. Over many years I have seen the difference good and bad leaders make. I really believe there is scope for leadership improvement in most organisations, regulated or unregulated.
Unlike in the past where working as a non-executive director in Jersey was often a lucrative and low-risk side-line for retired bankers, lawyers and accountants, it has become a viable career path for those in their 40’s (or even earlier). What advice would you give someone wanting to build the right profile, skills, and experience over the next few years to become a NED?
There seem to be plenty of people who see it as a career route or at least a supplement. I usually encourage those who have not been on a board before to consider the excellent Board Apprentice scheme. It deserves all the success it can get in promoting diversity on boards and a pipeline of suitable candidates. For those that have held senior executive roles and are looking for NED roles I suggest serving on a charity board. As well as gaining great experience they will be doing good for Jersey. Finally, although quite expensive, you should consider the Chartered Director role. Its value is sure to grow in the future given the competition for NED roles.
Where do you personally want to go next?
It is hard to beat the satisfaction gained from leading the turnaround of an important Jersey organisation. I love working with a team of people focused on doing something important. But of course, as you advance further down a plural route taking on full time or interim roles becomes much more difficult. I have learned from working as a non-executive director in Jersey that you can gain satisfaction supporting the Chief Executive and their teams in delivering an excellent and sustainable performance, and that is almost as much fun. It also gives me many opportunities to carry on learning. Every day is a school day, even for an oldie like me, and I would not want it any other way. I love my work and hope to carry on for a long time yet.
Find out more about risks working as a non-executive director in Jersey, in our article on the Jersey Civil Penalties Regime.