Life as a Director in the UK

A new survey, unveiled this week, has revealed that some of the UK's business leaders now feel that the pressures of their role outweigh the benefits because of fears over personal legal liability, financial liability and increasing red tape. It raises the prospect of UK plc losing its best talent as they cut short their time at the top.

Eversheds, a leading law firm, surveyed 100 Directors from a range of the UK's major PLCs to explore their key business and personal concerns. Half of them stated that they were concerned over their growing personal exposure to legal risk and almost 60% were worried about increasing red tape. To add to their fears, over a quarter of those surveyed were not covered by Directors and Officers Liability insurance.

As a result of these concerns, a significant number of Directors appear to be reconsidering their positions; 38% said that their attitude to the job had changed, making them more aware of personal risks and responsibilities. 39% of respondents feel that their rewards package is now insufficient to compensate them in light of their increasing personal liabilities, while one in ten expect to reduce the amount of time they remain a director, some by four years or more.

Directors identified their biggest concerns as finding the right people for senior management (78%) and managing the financial liquidity of their business (68%). Fifty-four percent said increasing red tape, internal change issues and the current economic climate were a problem. Other concerns identified were workload (41%) and the physical and mental toll (40%); 38% said they were worried about the effects of their job on their personal life.

When making important commercial decisions 30% of Directors said they turn to other Executive Directors for support, 17% said their CEO or MD and 14% said they turned to their Chairman. Asked who they would most likely turn to when sharing things that have a personal effect, 29% said their spouse or partner.

The survey painted a worrying picture for the future of the UK PLCs, with Directors focusing on these `close to home' issues rather than wider areas of business leadership. For example, only 36% are concerned about managing City and shareholder expectations. These personal preoccupations are also diverting their attention away from areas such as corporate social responsibility and corporate governance: a mere 8% are concerned with what investors think of their corporate responsibility programmes.

Peter McHugh, Senior Corporate Partner at Eversheds, commented: 'This research demonstrates that UK plc board directors are feeling beset by concerns on a number of fronts. The implications for British business are extremely disturbing. There is a lack of knowledge concerning key legislation, and 21% said they found it difficult to get the right information to manage their business. These issues could add to the personal risks they face and factor in any decision to cut short the time they spend as a Director. A stronger support system should be in place to provide them with expert advice and free them up to deal with the broader governance issues.'

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.