If E&Y thinks non-execs are a good call, so might you
The news this week that Ernst & Young is to appoint its first non-exec directors struck me as so interesting I posted it as a news story, even though it's only, on the surface, obliquely relevant to LSN readers.
Why? Because E&Y is a huge firm and I was surprised it didn't already have them, sure, but mainly because E&Y is doing this "to strengthen governance but also advise the organisation", says E&Y's chairman and CEO Jim Turley. E&Y isn't bringing external people in as non-execs, but it's a start as at least it breaks the grip on the board currently exerted purely by partners.
I bring this issue up because this is precisely the kind of thing that Professor Richard Susskind told us in his interview for Briefing a few weeks back that law firms could do far worse than consider getting non-exec directors in from outside to bring fresh ideas - and oversight - into the business.
"If one looks for example at the big accounting firms and they way they’re managed, the power lies really with a far smaller number than individuals. [But] I'm not sure the answer though is necessarily to bring in external chief executives to run the businesses," Susskind told us.
"Some firms have non-executive members of their board and that's worked, some even go as far as to have clients sitting on their boards, but the idea of having these new personalities sitting round the table bringing new thinking from other sectors, bringing the perspective of the client, challenging and probing in a way that perhaps firms haven’t been challenged and probed in the past. I think that in itself can bring major change."
Indeed, but if E&Y's example is a good one, it can also be good for risk management as well as a welcome commercial injection. One to ponder.