Brits out – the new boardroom mantra
That Reed Elsevier (LON:REL) has changed its chief executive is noteworthy, but not as much as the fact it has replaced a British manager with a Swede. Foreigners now account for 42 FTSE 100 boardroom seats: before long they will have a majority of the top UK corporate positions.
We shouldn’t get xenophobic about this foreign takeover but we ought to be worried. Why do nomination committees and headhunters prefer managers from overseas rather than home-grown talent? Are we not training our own executives correctly?
Reed Elsevier says that it wants a chief executive with more international experience, even though the publishing group appointed Ian Smith, the former Taylor Woodrow CEO, only this year. Reed is a global business and the new CEO, Erik Engstrom is certainly foreign and, having worked in America, counts as international. And after five years at Reed, he is also internal.
But it says little for UK management if 42 per cent of the country’s top 100 companies are headed by non-Brits. Are British managers too parochial? Are foreign managers more global in outlook? Do overseas executives take management more seriously as a science? Or do they have a different attitude to risk or a different approach to people management?
Or is it simply that boards become so keen to try something different that they think a different nationality is enough. Do they argue that if the last CEO was British and failed, then the way to ensure success must be to go abroad?
There are some companies that seem to be serial searchers for overseas chief executives: Vodafone has replaced an Indian with an Italian, the London Stock Exchange swapped a Canadian for a Frenchman, British Airways exchanged an Australian for an Irishman and Rexam went through three Swedes before choosing a French CEO, for example.
But where are the British managers running foreign companies? Hard to find. Yet if there is a 42 per cent chance that the board will go abroad for its next CEO, what chance is there for British middle managers to get to the top?
