This blog is taken from a paper I have delivered a few times to groups of people who were considering whether they could develop a portfolio career as Non-Executive Directors. Many people at a certain stage in their corporate career start to think about developing a portfolio career. While I don’t think you should be in too much of a hurry to do this it’s probably never too early to start thinking about it. So this is my story and I hope it’s helpful to you.
When I decided to leave full time employment I gave up many perks and privileges. But I can assure you I prefer it and enjoy the freedom and flexibility that comes with it. But it has not all been plain sailing and I imagine you will learn much more from me telling you about some of the mistakes I have made and the lessons I have learnt than telling how clever I have been and how all the head-hunters are falling over themselves to put me on the Boards they advise.
I first took on a Non-executive role over 15 years ago. I was then the fulltime Chief Executive of a fully listed public company and my Chairman thought it advisable, nay, necessary for me to have the opportunity to serve on another board and in his words, look at how someone else runs a company and in the process look back at yourself.
It was invaluable advice which I pass on freely. But first you need to understand some of your responsibilities as Non-Executive Director. The law does not distinguish between Executive and Non-Executive Directors. The Companies Act of 1985 was silent on the subject and the revised Act of 2006, which in the interests of deregulation is twice as long and was introduced in instalments, makes no mention either. A Non-Executive Director is assumed to be as liable as an Executive Director and under the new Act has a new responsibility, to strive for the success of the Company. This is no longer defined as being primarily in the interests of the owners, the shareholders, but rather the ‘members’, who may include employees, suppliers and customers and other stakeholders e.g. communities, as well as shareholders. This will lead to some interesting tests in the High Court e.g. will a pig farmer sue a major supermarket chain because he goes out of business under duress to supply his pork below cost? We shall see.
It is possible that even though few of you have faced such responsibilities as directors you may have faced them in other capacities. You might have been appointed as a trustee of a Pension Scheme – a pretty scary responsibility. Or some of you are probably Governors of a school- again a significant responsibility. There are over 90,000 Governors of schools in England & Wales- it’s the largest volunteer force in the country, and yet I wonder how many of them understand their legal responsibilities.
So a key lesson is to learn those lessons. If you want to take on this responsibility you need training. That applies to both Executive and Non-Executive Directors. There are several good courses. I have attended three plus several top-up seminars on specific issues, changes to the law etc.
So let me tell you something of my story and how I set about building a portfolio.
I left my role as CEO of NXT plc in May 2005. The chairman wanted to retire and I felt that I had taken the company as far as I could. We raised some fresh funds, secured the succession and made an announcement that covered all the issues.
I was then free to pursue other interests as they say and indeed I was. I had prepared for this moment, I had taken advice, but I must admit I had not really reached a decision. I felt that all the options were open to me.
I could look for more of the same. In the words of one leading head-hunter “I was in the right half of my sixth decade” and so could expect at least one more full time role.
I could start to build the portfolio. Long term this was what I wanted to do. The issue was, was it now or later?
I could build my own business perhaps as a consultant.
Some combination of all of these, because if I was going to be a full time CEO then there should still be room for another NED-ship?
This was a mistake because I was sending a mixed message to the recruitment community. Rightly or wrongly they want to know how to pigeon hole you, both as to your skill set and as to your aspiration. Saying that you want to have a bit of whatever’s going is not likely to succeed.
Consequently I had a few false dawns. I actually did option 4 in that I did a bit of everything but the result was that after a year I was not much further forward. I then had the opportunity to take a six-month assignment in a private equity backed situation. It was interesting and it paid OK but it meant that six months later, now 18 months from my decision to leave NXT, I was no further forward and crucially I was now in the wrong half of my 6th decade.
So in January 2007 I made a clear decision: I would not accept another full time role even if it paid brilliantly well. I was committed to a plural career. Indeed even the consulting firm that I had formed I killed off so that the message was clear. Option 2 – to build a portfolio career was my decision.
That immediately clarified my position vis-a-vis the head-hunters and indeed my other contacts.
Within a few weeks, by the beginning of March 2007, I was appointed to my first Chairmanship, Vividas plc. Vividas was a very exciting video streaming technology. We were small but already global with offices in Melbourne, London and Los Angeles. We competed with minor players like Microsoft and Adobe and although the market for internet TV was still immature when it arrived Vividas was well-placed to be one of the players.
In June I became Chairman of innovITS, a centre of excellence backed by the British Government for the development of Intelligent Transport Systems (ITS). Intelligent Transport Systems are used to improve road safety, reduce congestion and reduce carbon emissions.
In between I became a Board Mentor of Criticaleye, a peer community for senior executives. I looked after some of the other members and helped them in various ways, including getting the most out of their relationship with Criticaleye.
I remained a director of JP Morgan Japanese Investment Trust plc, my first NED ship and in February 2006 I had been appointed a Governor of the University of Bedfordshire. This was equivalent to an NED ship and again carried some important responsibilities for the character of the institution and the education of 23,000 students. It was of course pro bono and allowed me to say to other pro bono requests that that part of my portfolio was taken. I had been Chairman of Governors of a girls' comprehensive school. The university wanted someone to chair its Marketing and Communication Committee which concerned itself with the student experience, the reputation of the University, its position in League tables etc.
So I then had five engagements which kept me out of mischief for a few years.
This did not just happen willy-nilly. I set out to achieve a balance of work between different kinds of organisations. Part of the attraction and indeed fun of going plural is that I can enjoy different sectors, different types of work. I wanted to be Chairman of a listed company; that was Vividas. I wanted something in the public sector; that was innovITS. I wanted something in education; that was the University of Bedfordshire. I wanted to stay in touch with the City at the wider level; that was JP Morgan Japanese Investment Trust plc.
But how did I execute my plan? Well, I cannot over emphasise the importance of contacts, your little black book. Networking is a most important skill and needs to be developed before you abandon your corporate career. Your network is part of your value added. For many the idea of networking is pejorative. They imagine events with roomfuls of strangers thrusting business cards into each other’s chests and somehow imagining that offers of work will flow like honey from this process.
That might work for some - but it does not work for most. What does work is maintaining an ever wider circle of friends and associates. This will no doubt start with your immediate colleagues and peers in your profession. But over time it is important to enrich this with a variety of other industries, other professions. Look for diversity. I deliberately attend functions, for example, where it is not my specialist subject on which I am an expert and know what I am going to say. I do go to those events as well but more out of a desire to pass on my experience. But I like to go to events where I am the learner and look forward to meeting new friends.
One can connect with just about anyone if you try. But it is important to nurture these relationships. Thus of my engagements I was put into JP Morgan by the same head-hunter who had introduced me to NXT. I have known him for years. Another head-hunter asked me to join the University of Bedfordshire’s Board of Governors - she was the Vice Chairman and one of the leading head-hunters in the country. An old friend, also ex P&G, ex Mars and fellow Fellow of the Marketing Society was on the Board of Vividas and approached me to become its Chairman. The head-hunter who introduced me to innovITS was the one whose training course I had attended.
So, yes, three of my four principal engagements at that time came through head-hunters, but well-established head-hunters with which I had a well-established connection.
So in summary my lessons are these:
Know who you are and what you want to be
Position yourself clearly in terms of your target market and your route to market
Take the training to understand the responsibilities of being a director of a company
Build your network to build your portfolio
Set out to enjoy it.