The Evolving Role of HR on Boards

Boyden was delighted to welcome a range of HR Directors to our latest leadership event, hosted by Withers LLP in London. The evening was focused on ‘The Evolving Role of HR on Corporate Boards’, expertly led by Paul Forman, a highly experienced FTSE CEO and current Plural Chair. The discussion offered valuable insights into the increasing importance of HR expertise at the highest levels of organisations.

The value placed on HR experience within boardrooms has evolved in line with the complex challenges organisations face today. Successful companies must possess a compelling vision supported by leadership, culture, talent and teamwork of their people.

The CIPD ‘People Expertise’ Report published in July 2023, highlighted the increasing emphasis for HR skills on FTSE350 Boards, with 25% now having HR knowledge, up from 16% in 2019.

Paul led with 3 key points:

1. The role and voice of the HR Director has materially expanded in the last 20 years.
2. The role varies significantly between PLC and Private Equity ownership.
3. Board options exist but not necessarily in the way you might expect.

Historically, HR leaders often served as a business partner to the CEO, and functional advisers to RemCo when it was a significantly less charged environment than it is now. Today, HR’s involvement has expanded to the provision of strategic insight into a range of arenas, particularly NomCo, RemCo, and ESG. This is centred on people strategy, senior talent development, succession planning and employee engagement, including physical and emotional well-being, EDI and working patterns.

This change was accelerated by COVID, highlighting the criticality of the people agenda in most PLC's. Today, involvement is more frequent, strategic and interactive, with broader exposure that requires a greater skillset, and refined influencing skills to meet the increased responsibility.

In Private Equity, particularly in the mid-market, HR involvement will be similar in terms of business partnering and the requirement for HR fundamentals. Board interactions, however, are typically more limited to RemCo activities. Often, primary focus will be on building the ExCo and possibly managing post-merger integration. Overall, expect a narrower, lower profile remit and less intellectually stimulating interaction with the Board, but with the upside of Equity.

While the consensus was that companies are unlikely to appoint a third executive to the Board in the foreseeable future, HR leaders will continue to expand their leadership and advisory role. No serious PLC chair will contemplate a Board without HR expertise and often this will be achieved through non-executive appointments. Board options do very much exist and not just to Chair RemCo; a big contrast to historic Board composition. The critical factor is to invest time in achieving non-executive appointments whilst still serving as an executive.

Many thanks to Paul and the attendees for an informative networking event that highlighted the essential strategic requirement for HR expertise at Board level.

Boyden is a premier leadership and talent advisory firm with deep roots across the regions of the UK & Ireland. We offer three service lines, Executive Search, Interim Management and Leadership Consulting.

As a trusted global boutique with a values-driven culture, we have both a local and international footprint, helping organisations to thrive by discovering, nurturing, and optimising leadership talent, no matter where you do business.

David Thomas is responsible for Boyden’s UK Industrial Practice.