Why does construction have a NED-shaped hole?

Matthew Roberts, chief executive at website NonExecutiveDirectors.com, questions the dearth of non-executive directors from the sector.

Who wants join a board as non-executive director (NED)? Taking a look at our database, very few people from the construction industry, it would seem.

There are, of course, some NEDS from the construction sector on boards around the country. However, what I am seeing from our – fairly substantial – database of people actively looking for NED roles, is that only 2% of these are classed as working or having had worked in the construction sector.

Why would this be? A shortage of senior candidates from the sector cannot be accounted for, as many of them will clearly have the skills, talent and experience to offer boards.

When we speak to senior level people about NED roles, some of them say they feel they don’t have the skills required for the role. Yet being on a board is so much more than that – it is very much about the behaviours and attributes they display, such as confidence, self-control and the ability to challenge or support.

The role of a NED has changed over the years and their responsibilities have widened in what is an increasingly challenging boardroom role.

A priority for the NED is to remain independent of the business, its management and its day-to-day activities, but to have an in-depth knowledge of the organisation so they can ask tough questions, provide valuable insights and make informed decisions. 

Typically, they will not be involved in the day-to-day management of a company and that is where their value lies; they will focus on board matters and not stray into executive directing.

One prerequisite of a good NED is being able to see a company and its business issues in a broad perspective. 

So let me ask you this. What site manager or project manager hasn’t had to oversee a whole construction project, supervising and directing operations to make a project run smoothly and ensure it is completed safely, on time and to budget?

Don’t construction managers and directors have to be strong enough to deal with challenges every day from workers, suppliers, clients and other stakeholders? Do they not have to challenge back? Do they not have valuable opinions and strong communication skills?

Certain construction personnel will have the qualities needed to fulfil a NED role of contributing to strategy, monitoring management performance, ensuring robust risk management and getting involved in succession planning and remuneration for executive directors.

NEDS can come in all shapes and sizes and the more diverse a board the better.

According to our database, a typical NED is a 57-year-old male based in the south east of England, with 14 years’ experience as an executive. 

But we want to challenge the myth that boards should look this way – they should have a diverse range of people on them from a variety of sectors, age groups and life experiences, all bringing different perspectives.

From 4,819 male and 1,065 female members, a mere 18% are women. The gist of the feedback we’ve been given is that females still have a perception of “cronyism” and boardroom politics at this level, and that many intermediaries helping to find non-exec positions are also male, which they can find off-putting. 

This is the point I would naturally start discussing the number of women from the construction sector looking for NED roles, but I’ll leave that for another day.