Last checked at 9 Aug 2010 11:00
For immediate release 9 August 2010
Norman Broadbent plc ("the Group")
FTSE FACES
SHORTAGE OF NON-EXECUTIVE DIRECTORS
Norman Broadbent plc, a leading provider of executive search, and leadership consultancy services today releases its first survey on: "The Future of FTSE NEDs" following the June 2010 update of the Financial Reporting Council's UK Corporate Governance Code following recommendations from the Walker Report.
The survey concludes that FTSE 100 companies face a serious shortage of non-executive directors, highlighting three principle causes:
·; The Code's requirements for companies to change their NEDs every six years means that the 32% of NEDs who have served on the same board for longer should either step down or be 'subject to rigorous review.' The 10% of the NEDs in the FTSE 100 who have served more than 9 years will be judged to have lost their independence.
·; 65 NEDs serve on more than one board, but the new demands of the Code will make it almost impossible to continue doing so. Executive Directors currently serving as NEDs on two FTSE Boards will be encouraged to have no more than one due to the increased time commitment required.
·; The continual training and evaluation demanded by the Code will cause NEDs to think twice about the non-executive directorships as too onerous for the financial return.
Andrew Garner, Chief Executive of Norman Broadbent plc, commented:
"The Corporate Governance Code was drawn up with the best of intentions, but it will cause an acute shortage of non-executive directors at FTSE 100 companies. Whilst the current pool of NEDs will shrink dramatically due to the restrictions of the Code, UKPLC will be in head to head competition with the increasingly attractive, and indeed less onerous roles, within the public sector. This can only result in either UKPLC having to pay more to bring top NEDs on board or a dramatic change in the type of candidates seeking NED positions.
"Whilst the revisions have already caused rumblings of discontent amongst some institutional shareholders our survey proves that the true extent of knock-on effects which will come from these changes is yet to be felt."
Please click on the following link to see the survey:
http://www.rns-pdf.londonstockexchange.com/rns/7481Q_-2010-8-9.pdf
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