Transformation sweeps the board

IT COULD be an attempt to find a silver lining to a dark cloud, but the executive search company, Korn/Ferry International, is sure it has uncovered something special, writes Roger Trapp.

'The turbulence of the recession and the subsequent pressure for greater performance has resulted in a major transformation of the UK board,' said Michael Brandon, author of the company's latest annual study of British directors. He believes the changes in boards have substantially strengthened the leadership of industry.

For example, large boards seem to be going out of fashion: nearly 80 per cent of larger companies had boards with between six and 11 members last year. Of the smaller listed companies, three-quarters had fewer than nine members and more than a third five or fewer.

More than half of larger listed companies had at least as many non-executive as executive directors. And 85 per cent of companies - compared with 75 per cent in 1991 - conformed to the Cadbury Report's recommendation that the chairman and chief executive roles should be split.

At the survey's launch last week, Howard Davies, director-general of the Confederation of British Industry, welcomed these changes as 'a significant shift' in companies' attitudes towards corporate governance. But he added that the 'amazing numbers' which lacked audit committees suggested 'a significant group of hold- outs who still didn't see the point'.

George Bain, head of the London Business School, noted that the general level of education of the modern director had 'gone up significantly'. Two-thirds of directors under 50 had degrees. Until recently, fewer than a third were graduates.

Directors are also becoming better at languages and more experienced in working overseas. But Mr Davies, in particular, had concerns about companies' priorities.

Positioning in the West European market was high up the list. But breaking into Asia-Pacific was fairly well down. The CBI would attempt to raise British companies' consciousness in this area because they were missing opportunities, he said.