Brandon Horwitz discusses the value that actuaries can bring as non-executive directors, and how those interested can get involved
Non-executive directors (NEDs) sit alongside executive directors on the boards of firms, and are charged with specific obligations under the UK Companies Act 2006, as well as additional responsibilities when the firm operates in regulated financial services.
NEDs conjure up a range of images: the industry veteran dispensing the wisdom gained over a lengthy career; the plucky young entrepreneur whose ideas have made billions, now sharing their secrets; the celebrity ex-minister with the little black book to die for. But what about the mid-career actuary who is passionate about good customer outcomes and robust governance?
That latter image is me, a 40-something actuary who gets excited about value-for-money for customers and useful management information that could help govern a business effectively. I do stand out a bit in the NED world for a few reasons. First, I’m young (early 40s, if you must know). Second, I haven’t held a C-suite role, although I’ve sat on executive committees and been part of board-level discussions over my career. Third, I have a day job as a consultant.
What made me think I would be suited to being a NED? Simply put, because it’s incredibly interesting and I believe that I add value.
Seeing the big picture
Anyone who regularly attends board meetings might raise an eyebrow at my description of it as ‘interesting’. Meetings are often very long, have reading packs that are hundreds of pages long, and (especially in the highly regulated financial services space) involve a large amount of responsibility (and liability) for directors in overseeing what is going on in a highly complex business. This is made even more difficult as a NED, as you will typically know a lot less about what is going on than your executive director colleagues who work in the business day-to-day.
However, that is exactly the challenge I relish. I found life in the executive world frustrating at times because you typically only worked in your ‘vertical’ within the business, often having deep exposure to a few things but a limited view of the whole business. On a board, you have the exact opposite experience: ‘horizontal’ responsibility for the whole business, but typically only dipping into the shallow end of the detail. For the first time in my career, I found myself not only being able to see the big picture, but also being held responsible for ensuring it made sense and hung together sensibly (as well as being compliant with relevant legislation and regulations).
Hands up, hands off
I have always been known for asking questions. At school assemblies, whenever a guest speaker asked whether there were any questions, all eyes would invariably turn to me… and I was usually already bursting out of my seat with my hand in the air! I’m a curious chap, always trying to make sense of the world and never embarrassed to say that I don’t understand something. My studies of corporate failings and scandals over the years have revealed a pattern of ‘wilful blindness’ or simply a failure to ask the right questions – lessons I am keen to apply as a NED.
Being an actuary brings some extraordinary strengths to the NED role, especially our high-level numeracy, our problem-solving skills, and the strong sense of duty and responsibility that comes from being part of a regulated profession. These strengths are balanced out by some potential weaknesses, such as wanting to get into the minutiae of problems, having a tendency to focus on the micro rather than the macro – and that same sense of duty and responsibility. How can being dutiful and responsible be both a strength and a weakness? The clue is in the name: ‘non-executive’ – which means being ‘hands off’.
Many actuaries succeed in their careers through becoming subject matter experts and getting things done with their own two hands. While some naturally rise through the general management route in firms, many actuaries progress through technical expert routes and continue to get involved in solving problems in a ‘hands on’ way throughout their careers.
Being a NED means setting a strategic direction for an organisation and agreeing policies and high-level procedures, as well as a set of systems and controls for overseeing execution. The board’s job is to keep its eyes on what is going on at a high level, but not to manage a business day-to-day – that is the job of the executive. As frustrating as this may seem, it is actually the secret to good governance, whereby the board provides an important check and balance to how the business is being run.
Actuaries are well-suited to this role if they can reorientate their perspective to the big picture. This involves solving the problem of how to recognise what is going well and what needs attention from clues in high-level management information, and from observing the people who present to the board.
A different perspective
Diversity on boards is a major focus, with many experts agreeing that it’s not just about ‘external’ features such as gender, age or ethnicity (while acknowledging that much work is still required to address imbalances in these areas today).
A big part of the value of actuaries is the simple fact that we do often think differently to other people. We can bring a different perspective due to our neurodiversity (many actuaries are on the autistic spectrum) and our training and work experience (we think about multiple possible futures all the time!). This different perspective can combat ‘groupthink’, helping to improve decision-making and manage risk more effectively.
How to get involved
I was lucky enough to enter the NED world midway through my career. Traditionally, it has been seen as something to do after retirement, but there is increasing openness to younger NEDs with fresh perspectives and hands-on executive experience in key areas.
Two of these areas are digital transformation and risk management, both areas that are in demand and important in regulated financial services. Given that most actuarial work involves both, actuaries may find themselves with skills that are readily transferable to board work, especially if you have been involved with change management committees or risk, actuarial and compliance committees in your executive career.
“Being an actuary brings some extraordinary strengths, especially our high-level numeracy, problem-solving skills, and strong sense of duty and responsibility”
My advice for navigating this world is to network, network and network. Your first NED role is likely to be on a subsidiary board of a larger firm, and a good way to learn about these roles is to meet people who already sit on boards in these sorts of firms. It is also worth joining professional networking groups, including the IFoA’s NED Member Interest Group to meet people who already work as NEDs and fellow aspiring NEDs.
It is also worth considering formal director training, making sure to check whether a given organisation and qualification is recognised and valued on the boards in which you are interested. In addition, specialist search consultants (or ‘headhunters’) cover the NED market, so it is worth familiarising yourself with the main players and making them aware that you are in the market for roles. Finally, while there are many websites and services offering to help people secure
NED roles (often for substantial fees), it is worth doing your own research on these before signing up to their services.
Brandon Horwitz is an actuary, independent consultant and NED