Drax

Headhunters must take plunge into diversity pool

Headhunters have a crucial role to play in widening the pool of boardroom directors - one of the key recommendations of the Higgs review - according to international executive search and selection specialists Drax.

Too often, according to director Graham Roadnight, the "usual suspects" are recycled around the appointments circuit with no active effort to seek out emerging talent.

Derek Higgs’ review of the role of non-executives called for the source of people available to sit on UK boards to be broadened and the appointments procedure to be fairer and more open. His report was published in January 2003 following a number of high profile boardroom scandals including the collapse of Enron.

 
"We are the supply chain and if we are not operating in a diverse way then we won’t attract the best people available for our clients."

 
Roadnight says: "We are the supply chain and if we are not operating in a diverse way then we won’t attract the best people available for our clients." He is, however equally emphatic that tokenism won’t be tolerated. "If diversity means dilution of calibre, no search firm will touch it."

Roadnight also says that Drax pre-empted some of the findings of the Higgs report by adopting a philosophy that emphasises rigorous selection to ensure there is a true assessment of a candidate’s ability to do the job, rather than a superficial market perception.

Drax, which has been shortlisted again as the Executive Search Firm of the Year by the European Technology Forum, can claim to be practising what it preaches - women make up a third of the workforce and staff are drawn from different ethnic backgrounds, public and state schools, Oxbridge and the new universities.

Roadnight believes that the changes set in train by the Higgs report offer the ideal opportunity to bring about diversity in the boardroom. He also thinks that in the new climate non-executive directors will have to work harder for their fees. As well as ensuring good stewardship of the business, they will have to take on increasing challenges in other areas such as corporate social responsibility (CSR).

This is a field in which Drax has a particular interest and an established track record. To increase awareness and promote informed debate on CSR and other issues, Drax holds regular executive briefings, drawing together small groups of peers to discuss relevant topics. A recent briefing focused on the relationship between corporate governance and sustainability.

The company also publishes Whistleblower, a quarterly industry review, deliberately designed to be provocative - the first issue ran a piece about how headhunters didn’t add value. The company also works with Business in the Community, a group of over 700 of the UK’s top companies committed to improving the positive impact of business in society.

 
"Higgs has opened up the debate and everyone is talking about it. Now it’s really down to the Government to see what they are going to do with it."

 
Roadnight suggests that increasing attention to CSR will be a driver for change. Candidates may well gravitate to a company that has good CSR credentials. Analysts, too, will be taking CSR into account. They might, for example, look beyond the bottom line to see how the balance sheet figures were achieved and scrutinise the company’s efforts to ensure business sustainability.

"CSR should be more than an external veneer", says Roadnight. "It must be about more than going through the green wash. It has to be an internal reality." He points out that in the United States CSR can amount to just a column on the balance sheet with a large donation to charity, whereas in some parts of Europe CSR is much more integral and non-executives have more involvement in decisions. He says it is vital that non-executives have the opportunity to challenge the board.

Roadnight has some unflattering views on some sections of the headhunting business. He says it is the industry that "wanted to have it all - we’ll provide you with a shortlist but don’t blame us if the exec can’t do the job." Good search and selection, he says, needs continuous investment.

One of the most useful outcomes of the Higgs review, he believes, is the way it has stimulated discussion. "It's opened up the debate and everyone is talking about it. Now it’s really down to the Government to see what they are going to do with it."

The Drax Group emerged in October 2000 after a management buy-out from the Spherion Corporation - then the third largest global recruitment group. Drax, the group’s search and selection arm, is involved in financial services, technology, media and utilities, not for profit, public sector, public affairs and corporate communications, and corporate social responsibility.