Investment bankers may not be right stuff for non-exec jobs
Many senior investment bankers who are leaving the industry have unrealistic ambitions of becoming non-executive directors at top companies, according to Chris Leslie, a leading headhunter at Whitehead Mann.
Some of them "perhaps do not realise their currency is not in demand for the type of company they often want to join as a non-executive director," said Leslie, chairman of the financial services group at the UK-based search firm.
Many such bankers are in their late 30s upwards and have decided it was time to retire from banks such as Goldman Sachs and Morgan Stanley. Often they are accustomed to dealing only with very large companies and are not interested in joining firms as non-execs unless they are multinationals such as BP or SmithKline Beecham, he said.
However, the largest multinationals were not necessarily looking for ex-investment bankers to sit on their board. Mid-sized companies were more likely to do so, particularly if they had problems that may require investment banking skills or if they wished to look more credible in the eyes of the City of London, Leslie said.
Clients of Whitehead Mann's board practice include retail banks, insurers and fund managers. "They are often looking for people as non-execs who are not from within the industry, to provide balance," said Leslie.
So a retail-oriented fund management group might want a marketing expert coming out of FMCG on the board, or someone with technology experience, rather than someone from a financial services background.
Whitehead Mann is currently doing searches for the board of directors of Lloyds of London, and here too it is looking for "a blend of experience".
Leslie said it was increasingly difficult to find people to fill non-executive roles at financial services companies, because of the number of people whose reputation had been tarnished by being associated with companies in financial trouble. "Issues of regulatory risk do not make the job (of finding non-execs) any easier."
US-based headhunter Jeff Christian recently said regulatory legislation there was making it much harder to persuade people to become non-executive or part-time directors. But in the US, payment to non-execs in stock options enables some to make large sums of money.
In the UK by contrast, non-executive directors are typically paid by a fee arrangement, and the top 30 or 40 FTSE companies typically offer between 45,000-50,000 a year for a non-executive board appointment, says Whitehead Mann.
At the very top end of investment banking, there have been successful moves into senior board positions. David Clementi, who recently stepped down as deputy governor of the Bank of England, is on the board of the Prudential financial services group and is chairman-designate there.
John Nelson joined the board of BT in January when he retired as chairman of CSFB Europe.
But Leslie cuationed: "These are very well known people who knew the companies. There is more supply than demand in this market."
Some bankers who have managed to win non-exec positions have used them as a stepping stone to bigger things. Michael Dobson, CEO of Schroders, the UK fund manager, first joined the board as a non-exec. Peter Davis, CEO of the Prudential, also moved over to that position from an initial non-executive role.
