The standard voluntary code of conduct for executive search firms
Updated 16 March 2021
© Crown copyright 2021
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/standard-voluntary-code-of-conduct-executive-search-firms/the-standard-voluntary-code-of-conduct-for-executive-search-firms
Search firms are committed to helping their clients increase the effectiveness of their boards and senior executive teams and acknowledge the value that diversity brings; they readily acknowledge the important role their profession needs to play in supporting chairs, nominations committees, CEOs and CHROs as they take steps to enhance the diversity on their boards, in both executive and non-executive roles, and in their senior executive ranks. The key areas of focus include increasing the proportion of women and broadening ethnic diversity.
The Voluntary Code of Conduct for Executive Search Firms (The Code), outlined below, lays out steps for search firms to follow across the search process, from accepting a brief through to induction. Since its launch following the Davies Review in 2011, it has been refined and enhanced over time, reflecting learnings from search firms themselves, the independent review of its effectiveness in 2014, the annual Hampton-Alexander reports and the Parker report in 2016.
Code of Conduct: Provisions
1. Board succession planning
Search firms should support Chairs and their nomination committees in developing medium-term succession plans that identify the balance of experience and skills that they will need to recruit for over the next two to three years to maximise board effectiveness. This time frame will allow a broader view to be established by looking at the whole board, not individual hires; this should facilitate increased flexibility in candidate specifications.
2. Executive succession planning
Search firms should support nomination committees, CEOs and CHROs in developing clear, appropriate targets for enhancing diversity in senior executive roles and in developing plans to strengthen the pipeline of diverse candidates.
3. Diversity goals
When taking a specific brief, search firms should look at overall board or senior executive composition and, in the context of the business’s agreed aspirational goals on gender balance and diversity more broadly, explore with the client if recruiting women and/or ethnically diverse individuals is a priority both generally and on this occasion.
4. Defining briefs
In defining briefs, search firms should work to ensure that significant weight is given to relevant skills, underlying competencies and personal capabilities and not just proven career experience, in order to extend the pool of candidates beyond those with existing board roles or conventional corporate careers. On Chair searches in particular, search firms should work to ensure that the briefs are framed in as open and inclusive a way as possible.
5. Longlists / shortlists
When presenting their longlists, search firms should try to ensure that at least 40% of the candidates are women – and, if not, should explicitly justify to the client why they are convinced that there are no other qualified female options, through demonstrating the scope and rigour of their research.
Search firms should seek to ensure that the shortlist is appropriately reflective of the longlist. They should discuss with their clients each woman on the longlist and seek to have at least two women whom they would ‘strongly recommend’ that the client should meet for Non-Executive searches; they should have a similar aspiration on Chair searches as well.
Search firms should also discuss and agree with the client and meet specific targets for ethnic diversity on the longlist and seek to ensure that the shortlist is appropriately reflective of the longlist.
6. Candidate support
During the selection process, search firms should provide appropriate support to candidates, in particular first-time ones, to prepare them for interviews and guide them through the process.
7. Supporting candidate selection
As clients evaluate candidates, search firms should ensure that they continue to provide appropriate weight to intrinsic competencies and capabilities, supported by thorough referencing, rather than overvaluing certain kinds of experience. Search firms should, as necessary, advise their clients on how to run their interview process to demonstrate the required rigour and professionalism and share best practices on how to reduce the impact of unconscious biases.
8. Induction
Search firms should provide advice to clients on best practice in induction and ‘on boarding’ processes to help new board directors or senior executive hires settle quickly into their roles.
9. Embedding best practice
Search firms should ensure that best practices in supporting clients on enhancing board and senior executive diversity are well documented and shared internally and that adherence to the Code is effectively monitored. They should discuss (or arrange training on) unconscious biases and how to reduce their impact.
10. Signalling commitment
Search firms should signal their commitment to supporting diversity on boards and in senior executive ranks, and their adherence to the Code, through their websites, marketing literature and client discussions. They should share data on their track record on their website as appropriate and include case studies of their success.
11. Broadening the candidate pool
Search firms should seek to broaden their own networks of potential candidates, leveraging as appropriate external lists produced by relevant organisations. They are encouraged to invest time into developing relationships with the pipeline of future female and ethnically diverse candidates.
Embedding and developing the Code
The revised Code has now been signed up to by over 60 search firms, who collectively account for the vast majority of the board work in the UK. All have committed to following the Code’s provisions in their board and senior executive search processes, irrespective of sector, company and organisation and to ensuring that the 11 provisions of the Code are embedded in their day-to-day practices.
We will continue periodically to review the effectiveness of the Code and progress towards improving board diversity, with the Hampton-Alexander and Parker Steering Groups and other key stakeholders and recommend changes as appropriate.
February 2021