In the current economic climate, demand is growing among aspirational recruitment firms, particularly small and medium enterprises (SMEs), to have a non-executive director (NED) on board.

But why are more recruitment agencies looking for a NED and what qualities should they be looking for? Experienced NEDs are pointing out that some firms are appointing NEDs without the qualities needed to advise the management team.

John O’Sullivan, managing director of peer-to-peer learning group Elite Leaders and an experienced NED, explained that care is needed to engage the right person. “Appointing a NED is one of the most important steps a firm can take. There suddenly seems to be a glut of people offering their services who, despite meaning well, are often totally unfit for purpose.”

There is no statutory definition of a NED, but such a director will usually devote part of their time to the affairs of the company as an iindependent adviser or supervisor. What type of knowledge does a NED in a recruitment firm have to have?

Jeff Brooks, director of recruitment consultancy firm WinMoreBiz and a NED on three recruitment firms’ boards, told Recruiter: “You want to see that the NED has good all-round business skills and can analyse your business at a high level.

“Also, it’s essential to know the recruitment business. If I wasn’t able to talk knowledgeably about staffing I’d struggle to get empathy with board members.”

O’Sullivan agrees. “There are some industries where outside experience is really useful, but in recruitment, deep industry knowledge of the workings of recruitment is vital,” he explained.

Not everyone agrees with this, though. Chief executive at financial recruiter Goodman Masson, Guy Hayward, believes that strategic business knowledge is just as important: “I’m not so sure a NED necessarily needs experience of the recruitment market. What is of vital importance is the design and then execution of a sales strategy; a NED will need a proven track record of achieving this.”

David Jensen, chairman and chief executive of Brooklands Executive, told Recruiter there were two main reasons why recruiters look for a NED. The first is for innovation for the business and the second is believing that bringing on board a NED is a positive move and would bring in more business.

“If the company’s looking for someone to boost sales, then they should hire a salesman,” he said.

As for why some are seeing a rise in the number of recruiters appointing NEDs, Hayward told Recruiter: “The current market has exposed the boards of recruitment businesses to unprecedented challenges. A NED can help a board meet the challenge, recognise it as an opportunity without learning through making mistakes.”

Charles Russam, chairman of interim specialist Russam GMS, told Recruiter: “Recruitment agency heads have found themselves with challenges, problems, decisions to make — practical, legal and strategic ones — that they’ve never had to make before. Finding the right NED to help them do this is a good and timely answer.”

With these positives, Brooks concludes: “There aren’t that many NEDs active in the recruitment sector but the pool is growing and that can only help make the industry grow faster and more professionally.”