Why aren't there more lawyers on boards?

The UK should follow the US's example.

A report studying the rise of so-called "lawyer directors" in the USA Today came to my attention recently. The academic study found that lawyers have become increasingly prevalent on corporate boards; as of 2009, 43 per cent of US companies had lawyer directors on their boards; rising from 24 per cent back in 2000. Indeed the authors of the paper opine that a company with a lawyer on its board has a corporate value typically 9.5 per cent higher than a company without and empirically performs better.

Appointing lawyers onto boards helps to reduce external legal risks whilst also improving internal corporate governance. In the USA there is a dawning realisation that lawyers make valuable board-level directors, as the statistics attest, and a cultural shift is well and truly underway.

In the UK however the boardroom narrative is markedly different. There are only 14 lawyers acting in any capacity on the boards of the FTSE 100 and only 20 qualified lawyers currently on boards of the FTSE 250. Very few general counsels or partners of law firms are making the step up to boardroom level and it begs the question, why this disparity between the US and UK? It is clear that there is a negative mindset amongst CEOs and chairmen of public companies in the UK concerning lawyers serving as executive or non-executive directors on boards. Part of this apprehension stems from the notion that lawyers are skilled craftsmen but not capable of managing businesses nor bringing anything other than endless polemic to boardroom discussions. There also exists a misconception that Limited Liability Partnerships (LLPs) are run as siloed businesses, but in today’s globalised business world large law firms are increasingly run in a form very similar to those of public companies, therefore partners are increasingly required to possess managerial skills to run an LLP successfully. Take my own career as a prime example; as Co-Chief Executive of DLA Piper I have not practiced law for years – my role is strategic and managerial, focussed on the day to day business of developing a global law firm.

The notion that lawyers do not possess the requisite skill set to sit on boards is a patent farce.  I would argue that lawyers have a lot to offer beyond their self-evident legal expertise (whilst not denigrating this offering). Most lawyers generally have the vitally important ability to absorb vast reams of complicated and granular information. Not only does this enable he or she to then précis this information into a clear 'big' picture, it is an essential skill for any board level non-executive (or executive) if he or she is to offer any value-enhancing interpretation of the business.

However at present, deconstructive analysis and corporate governance scrutiny is not always what a UK CEO looks for when considering the makeup of his or her board. Perhaps it is time that public companies started to consider more carefully the benefits of appointing analytical thinkers with a risk-averse and best practice approach to corporate governance. A lot of companies could do with a little more probity of that ilk. Lawyers seeking board level appointments must for their part look to expand their exposure to boards of all kinds, be they businesses, schools, local councils or charities, in order to gain more people management experience and learn to think less like a lawyer and more like a business person. Perhaps then we shall see more lawyers on boards and a cultural shift akin to the US will manifest itself here in the UK.

Photograph: Getty Images

Co-CEO of DLA Piper

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Taking back control... in the workplace

It’s time to reboot dignity and respect at work, says Frances O’Grady, general secretary of the TUC

Jess* lives in a small town in the north-west and is on a zero-hours contract. Some weeks she could work up to 50 hours, but others she works as few as 30. And when she got ill, her company refused to pay her sick pay. Sarah* is 38 and lives in a big city. She is employed through an agency and although she has worked more than 12 weeks for the same employer, she feels like she’ll never get the same status as permanent staff. She told the TUC: “I feel frustrated at the lack of permanent jobs in the market and how little control you have as an agency worker. Everything in my life feels temporary at the moment. My experience of agency working is that you are on the bottom rung. You can’t speak out or you won’t get work.”

Wherever you go in the UK, the story is the same. Too many working people are stuck in jobs that don’t offer enough pay or enough security to build a life on – in short, there’s not enough control. Working for the TUC, I hear these stories every week. Stories of workers who don’t know from one day to the next whether they’ll work that day. Working people in all sorts of jobs who can’t raise problems at work, because on today’s “flexible” contracts: the boss doesn’t need to sack you, he can just take away next week’s hours. Delivery drivers who have found themselves deactivated without warning. Warehouse pickers red-flagged by a gadget that decides they are too slow. And stories from careworkers whose work lives are governed by the ping of an app – but who never get enough time to meet their elderly clients’ needs.

This is the reality of work for too many people now. Isolated from colleagues and at the beck and call of their boss. Without the small measure of security granted by a permanent contract and some basic employment rights. It all leaves hard-working people with precious little dignity or control. The time is ripe for a new deal for working people – and that’s what must be on offer at this election. For a start, as we leave the European Union, every party must guarantee that our rights at work don’t go backwards. Hard-won rights such as holiday pay and protection from pregnancy discrimination came from the EU. We can’t afford to lose these rights after we leave – and we need to know that they can’t be watered down on the quiet by judges or by parliament.

And in the years to come we have to make sure that hard-working Brits won’t miss out on new protections that Dutch, Spanish and German workers get. That’s why the final Brexit deal has to include a level playing field on workers’ rights – making sure they will always be as good as or better than what’s on offer to the rest of the EU. Second, the rules to protect working people haven’t kept up with how working lives have changed. One in ten workers is already in insecure work – and if nothing changes, 290,000 more people will join them by the next general election in 2022. That’s the equivalent of 13 extra Sports Directs, or the entire working population of Sheffield.

These jobs don’t pay enough and they push all the risks on to the workers. Paying rent and bills can be a nightmare when you don’t know how much you’ve got coming in each month. Britain’s 900,000 zero-hours contract workers earn a third less per hour than the average worker. And every worker pushed into false self-employment loses their rights to sick pay and paid holiday. If Britain aspires to become a high-skill, high-productivity economy, the next government must drag the rules about work into the 21st century. Promising a review isn’t enough; every party must make real commitments to crack down on zero-hours contracts and bogus self-employment, and make sure agency workers always get the going rate for the job.

And Britain still needs a pay rise. Rising inflation and slow wage growth means a new living standards crisis is coming. And we’re still in the longest pay squeeze since Victorian times: workers are on average over £1,000 worse off each year in real terms than they were in 2008. Over the coming parliament, the minimum wage needs a serious boost, so that it reaches £10 per hour as soon  as possible. We need to get more people covered by collective bargaining agreements that raise wages and skill levels. And it’s time for the government to stop artificially holding down public servants’ pay. By 2020, midwives and nurses will have seen their real pay fall by over £3,000 – scarcely the right reward for years of dedicated public service.

Of course, the best way to raise wages is to bring great jobs to every corner of the country. In both 2014 and 2015, London’s growth was double that of the average across the rest of the UK. We still lag behind our competitors on the infrastructure we need to help the whole country – such as modern transport links and fast broadband. And our investment in infrastructure is the lowest in the OECD. More than ever we need an industrial strategy that delivers good jobs to the parts of the UK where they’re needed most. Improving the lives of ordinary working people and giving them back control of their rights – that’s what all of the major parties should be prioritising this election.

** Names have been altered to protect people’s anonymity.

Frances O'Grady is the General Secretary of the TUC. 

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