The top tables where Brits no longer rule

Vodafone's appointment of Gerard Kleisterlee this week means only two of the top six companies in the UK have British chairmen. But does it matter?

It doesn't say a lot for the strength in depth of Britain's business management talent that four out of our top six companies are now chaired by foreigners now does it?

Vodafone's appointment of the Dutchman Gerard Kleisterlee, the outgoing boss of electronics giant Philips, to replace Sir John Bond as chairman is part of a growing trend.

In total 27 of the chairmen of FTSE 100 companies now hail from overseas. But this is a trend that is almost unique to UK companies among big industrialised economies. A cursory look at the boards of the biggest German, French and American companies will show that the men (and they're usually men) who chair their boards almost always hail from Germany, France or America.

Is this something we should be concerned about, though? The veteran city commentator David Buik, a partner at BGC Partners, certainly thinks so. He started a debate when he highlighted the issue in his blog.

Yesterday he explained his position, saying: "When it comes to a managing director or a chief executive, fine [to hire overseas]. But a chairman's role is to execute the policy of the board to make sure it is carried out (as well as liaising with major shareholders). If you mean to tell me that you can't find half-a-dozen top flight former chief executives, diplomats, civil servants, even politicians to become chairmen, well then I'm deeply disappointed."

And he's not alone in his lamentation of the apparent dearth of indigenous talent at the top of British business.

But others are not so sure that there is a a problem. Quite the reverse. They see the ability (and the willingness) of the top British companies to hire from a global pool of corporate talent as a source of strength. And a reflection of the openness of the UK.

David Peters, managing partner for the chief executive and board practice (EMEA) at Heydrich & Struggles, says: "I don't think this should be a worry. I actually think that it is encouraging and shows that boards are raising their game, and are more open to appointing people who have the knowledge and strategic ability to implement their plans. If you are looking at developing markets, for example, you need people with the right skills set and experience of working there. These people are international businessmen. They are not just from one country."

Kit Bingham, principal at Odgers Berndtson, the executive search firm, says: "If you look at the top six, their revenues from the UK are a fraction of the total. In fact 75 per cent of the revenues from FTSE 100 companies as a whole are from overseas." Mr Bingham notes that in the second-tier FTSE 250 index, whose constituents' business profiles are much more UK centric, only 19 of the chairmen hail from overseas.

But in general he, like Mr Peters, says it is a "good thing" that British companies are willing to hire the best talent, regardless of nationality, and a source of some strength.

"It is a great signal of London as a financial capital. About how open it is," he says. "The only potential concern would be whether these people have quite the depth of understanding of UK unitary boards (on the Continent boards are split into non-executive supervisory boards and executive boards running the company)." But Mr Bingham says this is a relatively small worry given the benefits.

Steve Tappin is the chief executive of Xinfu whose staff serve as "global confidants" for top directors. He works with 12 of the FTSE 100 chief executives and collaborated on the book Secrets of the CEOs. He notes that there is a limited pool of talent for top companies to choose from when seeking a chairman. And he says some of Britain's bigger companies have experienced problems when they have tried to globalise their businesses. He points to this as one reason for the overseas hiring spree among Britain's biggest corporations.

"When chief executives have tried to globalise they haven't always had good chairmen to support them. But I think this [trend] also shows that we are perhaps more open here in Britain than in the US, France or Germany, where there is a stronger current of nationalism. Perhaps it's partly because of our history that we are more willing to hiring internationally than our international competitors are."

The research, too, suggests diverse boards are strong boards. Says Mark Batey, joint chair of the Psychometrics at Work Research Group at Manchester Business School, says: "Research very strongly demonstrates that the more diverse a group is, the more flexible and creative it is because its members can tap into different ways of working and different experiences.

What about the investors whom the chairman is there to serve? A spokesman for the Association of British Insurance simply says: "It is for [companies'] nomination Committees to choose the best available candidate for the role. That will depend on the circumstances of the company and the nature and reach of its business."

But despite this consensus there still remains a lingering doubt. There are some who might fear that one consequence of corporate Britain's willingness to hire overseas is that the rest of Britain might suffer as a result as those companies shun what is, when all is said and done, still their home. After all, if a French company or a German company decides they need to cut staff, the perception is that they usually target their home markets last of all (although that might be as much down to their labour laws as it is nationalism).

On the other hand HSBC is one of only two of Britain's six biggest companies that boasts a British chairman, in the form of the Scotsman Douglas Flint. The same HSBC that has been loudly muttering about conditions in the City of London, with the implication that it might prefer life headquartered in Hong Kong. Patriotism and business, it seems, don't mix.

News
Ian Thorpe had Rio 2016 in his sights
people
Sport
Jonathan de Guzman of the Netherlands and Willian of Brazil compete for the ball
world cup 2014LIVE BLOG: Hosts Brazil take on the Netherlands in third-place play-off
News
Tommy Ramone performing at The Old Waldorf Nightclub in 1978 in San Francisco, California.
peopleDrummer Tommy was last surviving member of seminal band
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

PROMOTED VIDEO
Life and Style
Several male celebrities have confessed to being on a diet, including, from left to right, Hugh Grant, Benedict Cumberbatch and Ryan Reynolds
life...and the weight loss industry is rubbing its hands in glee
Voices
Spectators photograph the Tour de France riders as they make their way through the Yorkshire countryside
voicesHoward Jacobson: Line the streets for a cycling race? You might just as well watch a swarm of wasps
Life and Style
lifeHere's one answer to an inquisitive Reddit user's question
Arts and Entertainment
'Eminem's recovery from substance abuse has made him a more potent performer, with physical charisma and energy he never had before'
arts + entsReview: Wembley Stadium ***
Sport
Joe Root and James Anderson celebrate their record-beaking partnership
cricketEngland's last-wicket stand against India rewrites the history books
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice