Why NEDs matter
As a matter of good governance, we have a strict rule at FSCS that our non-executive directors step down after serving two three-year terms.
This has a downside. It means we regularly lose outstanding non-executive directors who have provided, in equal measure, great support and rigorous challenge.
The upside is that we ensure that our cadre of non-executive directors – who are in a majority of 8-4 on the Board – is continually renewed. There is now no non-executive director on the Board who was here when I first took up post in 2010.
That offers an important guarantee that challenge will not be blunted by familiarity or by mutual regard.
As we approach 2017, we face one of these regular evolutions.
Four truly outstanding non-executive directors will come to the end of their terms: Liz Barclay, Jayne Nickalls, David Weymouth and Paul Stockton – in David’s case retiring just short of six years to take up the chair of Mizhuo.
So we have just begun the competition to find their successors; the advertisements will appear this week. We are using a specialist recruitment company to support the search.
So what are we looking for and what might a prospective NED expect?
Well, we always look in a number of dimensions.
We look for non-executive directors whose professional backgrounds and expertise can add value to FSCS. And FSCS is a much more complex organisation than it may at first appear.
Our primary role is to pay compensation, of course. But paying compensation involves often complex legal judgements as we apply our civil liability test to claims. And our compensation service must be able to gear up rapidly to meet the challenges of major failures or another financial crisis. That places a great deal of onus on the skills of our people and on the robustness of our processes and technology.
We do other things beside pay compensation.
We take over the rights of successful claimants against failed businesses and seek to maximise recoveries. These rights can be of long duration. We continue, for example, to have a £15.5bn stake in Bradford & Bingley left over from the 2008 financial crisis. That is matched by an outstanding loan from HM Treasury.
So our balance sheet makes interesting reading and presents significant challenges.
We seek to raise awareness of our protection, particularly of deposits, so that liquidity problems in any future crisis are not made worse by groundless public concern about the safety of their savings.
We work closely with a range of stakeholders in government, the regulators, industry and consumer groups.
The multi-dimensional nature of our role explains why we are seeking, in particular, to recruit new non-executive directors with, respectively: deep financial experience; a commitment to customers and good communication; and a background in operational delivery and change.
Professional expertise is not the only dimension of our search though.
We also like to maintain on the Board knowledge and understanding of the financial sectors we protect.
With the departures of David and Paul, we are losing some (though not all) of our experience of banking, insurance and the wealth management sectors. We should like to replace that experience, especially the latter.
And, of course, we want new non-executive directors who, personally, will fit in well with a dynamic and informal board, who can confidently challenge the executive and who can contribute to our strategy.
The one thing the FSCS Board is not is dull!
So if you think you fit this bill, or know someone who can, please do respond to the advertisement or get in touch with our recruitment consultants.
The Financial Conduct Authority website includes a searchable database of all firms authorised and regulated by the FCA and the Prudential Regulation Authority (PRA).