THE OUTSIDER: Blame the headhunters
The buck has to stop somewhere. When we look at some of the broken banks in the City, the ones bailed out by baffled taxpayers, we all want to know why. With 20:20 hindsight, like any car crash, it was obvious. Between the risk takers and the risk managers, there was a disconnect. And there was a disconnect between risk management and the boards of directors who were meant to take ultimate responsibility.
The disconnect between risk takers and managers is understandable. Look at the pay differentials. The disconnect with the board is much less understandable, let alone excusable.
What is a board for, if not to exercise control, exert its authority throughout the organization and provide the strategic direction that stops the ship sailing onto the rocks? Did I hear a cynic sitting at the back suggest it's not for those things at all? That it's just a bauble?
Having a difficult, demanding board, particularly of non-execs, can be well, a little challenging for the average Chief Executive. Non-execs can ask difficult questions. They don't sing the corporate song the way executives do who depend on your good will at bonus time. They don't appreciate the kind of rah-rah, patronizing twaddle you can get away with at those awful town halls. They might even disagree with you.
It's important therefore that your headhunters serve you up a slate of manageable candidates, people who won't rock the boat, who are grateful to be asked and would like to be asked again in future. People for whom 45k a year matters.
Naturally, the headhunters do what their clients ask. They're in the service business after all, and they know who pays their fees. No left field candidates, no-one provocative, unusual or difficult, no-one out of the standard mould. Just round up the usual suspects, people already serving on other boards, so that the selection committee won't have to think too much, and hey presto, it's an easy win all round.
Or is it? The best headhunters, the ones who really earn their fees, don't do this, and for my money even the average headhunter will do it less in future. The best understand their clients' organizations thoroughly and their personalities at least as well. Their rather privileged position allows them to ask interesting - even difficult - questions, because without doing so they can't do the best job. And each slate that they serve up contains at least one interesting name that makes the interviewers think.
The City won't be put back together again by politicians - they have far more power to mess things up than to do anything positive. But it will be improved by a general realization that everyone needs to raise their game and behave a little more responsibly, with a little more thought, patience and even humility.
Headhunters certainly have a role to play in getting the right people into the most senior positions. In future let's hope for more imagination, a net cast more widely, and fewer familiar faces - and board meetings that are perhaps a little less comfortable than they have been so far.
David Charters' latest book, 'Where Egos Dare', is published by Elliott and Thompson, price 6.99.
