There is a long running discussion within membership organisations on the subject of board composition and governance relating to elected and appointed members. Many boards historically, have been made up only of people elected from within the membership base itself.

The question is whether this all-elected structure is appropriate in meeting the needs of a modern professional body and its members. With a greater focus on the tangible benefits that organisations can derive from greater diversity, an all-elected board seems to be anathema and at odds with progressive and inclusive approaches. How is it possible to achieve any meaningful degree of diversity on a board when all of the members on it are elected from a relatively small homogenous pool? This does not just apply to demographic diversity, but also diversity in background, thought and experience. A room full of people from one profession will have exceptional subject knowledge in their professional field of expertise, but may well lack broader experience and knowledge essential to develop strategy and provide valuable guidance, input and constructive challenge to executive teams. Appointed members, being selected based on their skills and expertise rather than popularity within the membership, bring a unique and often underrepresented perspective to the board. This diversity is essential for ensuring that the professional body can effectively serve a wide range of stakeholders and adapt to an ever-changing professional landscape.

In my experience, as an executive search consultant and business owner, organisations rightly and very actively seek for my firm to scour the market place to find the very best choice of candidates possible to take on their most senior executive positions, either as Chief Executive or a member of the senior leadership team. These individuals will be impressive, not just for their leadership capabilities and strategic skills but also because of their wider business experience as well-rounded individuals with high levels of emotional intelligence and a collaborative approach to the workplace. Yet the same organisations who are recruiting their Chief Executives may well be compromised when structuring their own boards by outdated precedents which dictate terms which limit the ability to bring the right people to their boards. This is further compounded in cases where only a very small number of people stand for election and where the voter turnout is a low percentage of the membership, effectively meaning there is very limited or no choice of candidates and whoever stands gets in. As one Chief Executive said to me “I just have to make a meal out of what is in the fridge”.  

Unsurprisingly executive teams can find themselves underwhelmed by the all-elected governing body to which they report, frustrated that there is a demonstrable lack of breadth in business acumen, financial awareness, digital savvy or general awareness of the changing environment. At worst, this can lead to the development of a dysfunctional relationship and mistrust between the board and the executive team. 

It seems clear that membership organisations can significantly benefit from a blended board comprised of both elected and appointed non-executive members. While elected members bring deep sector knowledge and represent the voice of the membership, appointed members offer specific skills, new perspectives, and the ability to challenge conventional thinking, fostering diversity and enhancing the quality of outcomes.

One major advantage of appointing non-executive members is the opportunity to introduce specialised skills. Membership organisations often require expertise in areas such as transformation, digitisation, finance, legal matters, technology, strategic planning or international development. Appointing individuals with these skills ensures that the board has a well-rounded set of competencies to address complex challenges. For example, a legal professional with experience in regulatory compliance can contribute valuable insights in ensuring the professional body adheres to evolving legal frameworks.

Appointed members also introduce fresh perspectives and a willingness to challenge existing norms. This diversity of thought is crucial for preventing groupthink and avoiding the creation of echo chambers within the board. A board comprised solely of elected members may inadvertently reinforce existing ideas, limiting innovation and hindering the ability to think outside the box. By including appointed members, professional bodies can inject a healthy dose of constructive dissent, fostering a culture of continuous improvement.

An increasing number of membership bodies have recognised the benefits of transitioning from exclusively elected boards to a more balanced composition. At The LSL Group, we now are asked on a regular basis to instigate a search to fill an appointed board position. In the majority of cases the brief is very precise and deliberate. The assignment will be to secure an individual with a specific set of experiences or knowledge which the board is currently lacking. Each of these NED or Lay Member roles is crucial. There is often only a relatively small number of appointed positions, with the majority of the board members still being elected. This means that each appointed role really counts in the added value it provides. Not only are we seeking specific skills or experiences in the appointed candidate but, just as important, the board has the ability to achieve greater demographic diversity in a way in which it is simply not possible when electing from within the membership, especially where that membership itself is unrepresentative of the population. 

Recent examples of highly successful NED appointments that we have led include securing a digital experts for a leading professional body; a NED with deep experience of the Far East market to help introduce valuable understanding of the region to the board which had been missing previously; a senior finance professional to support a board which had no functional finance expertise; Chair of the Audit and Risk Committee with previous experience outside their sector, and many more. In every case the appointed candidate brought exceptional experience to the board that would not have been possible without making an external appointment.    

In conclusion, a blended board of elected and appointed non-executive members should now become the norm for achieving optimal governance. Elected members bring deep sector knowledge and represent the interests of the membership, while appointed members contribute specialised skills, diverse perspectives, and a capacity for constructive challenge. The inclusion of appointed members not only enhances the quality of decision-making but also guards against the pitfalls of groupthink and ensures the professional body remains innovative, agile, current, relevant and adaptable. There is a growing number of professional bodies which can now demonstrate conclusively that embracing diversity in board composition leads to more effective and responsive governance in the ever-evolving membership landscape.

If you would like to recruit an appointed NED to your board or are just interested to explore this topic further, or your organisation is on the journey towards bringing your first appointed member to the board please do get in touch at support@thelslgroup.com.

David Sneesby
CEO
The LSL Group

July 2024