Alex and Caroline Keetch are the directors of Halsey Keetch, having taken over and rebranded the business following the passing of the firm’s founder, and Caroline’s father, Nigel Halsey, in 2015. In this conversation, they share some insights on the origins of the firm, the current state of play, and what the future might hold, with the firm’s valued senior adviser and co-head of the firm’s Board search practice, Mike Gostick.
MG: Let’s talk about the background to your executive search business. Where did the focus on governance, regulatory and controls functions come from?
HK: It’s a good place to start, given our focus on those functions underpins our business model. In 1988, when Nigel originally launched, it was an exciting time for the City. The topics of governance and regulation must have been in discussion, but the pursuit of new commercial opportunities was probably taking precedence. ‘Big Bang’ had taken place a couple of years before, and had opened up the City to new people, new influences and new opportunities, so it would have been an exciting and dynamic time for the financial industry. There were lots of new products being launched, companies merging, and international banking groups coming into London and expanding here in order to gain access to Europe. However, when Black Monday occurred, in October 1987, there followed a huge drop in stock markets and other assets around the world. Investors and financiers got their fingers quite badly burnt in the process, in the same way that the dot-com crash was very painful for those involved a decade or so later on. Among other things, Black Monday must have been a wake-up call for the financial services industry, and particularly for regulators, as far industry regulators went back then, and our company was born into this era of opportunity and turbulence. In the early 1990s, there was the Savings and Loan crisis in the US, and the Barings Bank collapse in the mid-1990s, which had implications both in London and Singapore. These were both horrible frauds in themselves, and indicative of huge lapses in controls at supposedly well-run, self-governing firms. The functions in which we specialise commenced their gradual rise in prominence at that point, to where we are today.
MG: And Halsey Consulting, as the firm was then known, caught the regulatory wave from there, would you say?
HK: Well, in the very early days the firm’s range was wider, in fact, but risk and regulation gradually became more of a focus as the demand for such people grew across financial services. I (Caroline) was only little back then, but I can remember helping my father move into his first office, unpacking his papers and stationery from cardboard boxes. Nigel spent the very early years of the company working on a fairly wide range of roles. He ran the graduate scheme for an investment bank on an outsourced basis for a while, he recruited accountants for the BBC, and did some commercial work in the investment industry as well. For example, he placed a young Anne Richards as a fund manager in the late 1990s. Anne has gone on to become Chief Investment Officer of Aberdeen Asset Management, and more recently CEO of Fidelity International. As mentioned, though, the notion of increased regulation must have been creeping up the agenda for all sorts of service providers – consultancies, technology providers, law firms etc. Slowly but surely, risk, audit and compliance played a bigger role for us. Nigel’s leaning in that direction started with the audit and controls roles. He had started out in the early 1980s as an internal recruiter for Peat Marwick, which is now KPMG, helping the firm to hire partners and directors into various practices, so he had gained a solid understanding of the audit space, and also started to develop a senior network amongst the accountancy profession. The next step in the regulatory and governance direction for Halsey Consulting was the formation of specialist regulators like IMRO and the SFA, and their interest in hiring chartered accountants into their ranks, presumably in order to bring some robustness to their processes, and that rigorous audit mindset to the supervision and investigation of regulated businesses. Nigel assisted in placing some of his contacts into those organisations, and some of the contacts made in those days remain amongst our best and most senior contacts in the market to this day. We’ve been in the risk and regulatory space ever since then.
MG That must have has played into your hands in the last ten or twelve years, as the dramatic increase in industry regulation and improved governance standards in finance, particularly since the financial crisis, have put these roles in the spotlight, and increased their remit and strategic importance. What key issues do you perceive when it comes to hiring at senior levels in these areas today?
HK: For the last few years, everyone has been looking for the same thing simultaneously, so hiring into these areas these days has been made most challenging by a good old-fashioned talent shortage. Finding strong and dynamic leaders across these functions is a real challenge, and one made harder by continuous supply vs demand issues. The challenge for functions like audit, risk and compliance is that they have been enlarged and upskilled on an industry-wide basis in the last decade, so there have been wars for talent, significant compensation inflation, and generally insufficient supply to cope with such demand. Managing client expectations for firms like ours in those conditions is challenging. At the same time, it has been a positive development for various reasons. For one thing, the enhanced prominence of these functions is generally a good thing, and points towards a safer and better governed financial services industry. We’ll never patch every hole in the boat, but it’s fair to suspect that a lot of wrongdoing and a lot of mistakes will be avoided in future, thanks to stronger, more independent compliance, risk and audit functions across the industry. Another positive is the cross-pollination you have seen from other departments. Lots of lawyers, ex-business people, former accountants and others have migrated into functions like compliance and risk, adding real depth and substance to both the talent pool and the quality of leadership in these areas.
MG: Yes, I certainly saw quite a bit of such movement in my time in HR. My sense is still that there still aren’t enough people in the governance functions to go around.
HK: Well this is certainly true at the most senior levels. Investment in people, and the development of leadership in these areas is on the rise, but it takes time to develop leadership-level talent in what have typically been heavily technical roles. Regulation is ultra-heavy already, increasing, and continually changing. The industry keeps evolving too, so firms need a lot of expertise and hands on deck to keep up and maintain control. An obvious point to make in this regard is on the rise of regulatory technology, or Reg Tech, which is a super hot area for investment and innovation, but for the foreseeable future, there is only so far that can go. The real modern issue in governance, controls and regulation is leadership. The concept of leadership comes up in almost every client conversation we have, and it is a problem to be solved in very search that we run.
MG: Can you expand on that a bit?
HK: From what we can see from all our work at the senior hiring levels, these functions now need to be led, managed and developed by really high-quality, inspiring people with the ability to set the agenda, influence those around them positively, develop the next generation, and cement the importance of good governance and controls in the administration of the industry, for the good of society as a whole. It’s no mean feat and these are high-pressured roles. For obvious reasons, therefore, the industry is really struggling with a supply problem in this regard.
MG: And in this disintermediated age, where does a search firm add value to a senior recruitment process nowadays?
HK: The quickest answer to that question directly relates to the previous answer. Where there is a genuine talent shortage at senior-levels in a certain function, a search firm can provide a client organisation with a real edge when it comes to identifying and hiring the best people. A search firm’s reason for being is to find, engage, and then secure people the best people, where a non-retained or direct recruitment exercise might fall short. A specialist firm such as ours understands the environment in which we operate. We understand, and know, the people we interact with. We know what good looks like, and we understand the challenges that organisations might face when it comes to attracting the best people. Where we are able to truly partner with our client, discuss these issues and advise accordingly, we are able to provide a true competitive advantage to that firm. Regardless, the management of expectations is always key – and some clients are more open to the reality of the talent market than others. Additionally, senior-level talent, even though often committed to their current roles, still remain ambitious and still want to know what their options are, and what a sensible or exciting next career move might look like for themselves. It’s easy to think that accomplished and driven people already have all of this figured out, but the fact is, they are often too preoccupied by the content of their current roles to give much thinking time to their next moves. Coming into contact with the search industry allows for a pause, some time to reflect, and an opportunity to bounce ideas around. That’s especially relevant in the non-linear careers world of today, and it’s also relevant where someone actively wants a change, or where a potential employer wants a person with a bit of a different background for a particular role. Our network know that they can get in touch with us and have an open discussion about their options, based on our understanding of their specialist areas.
MG: And in terms of actually doing the work, how do you create that advantage for your clients? How do you achieve those results?
HK: We believe a great search firm is able to blend the art of finding the right people, based on intuition, knowledge, experience and human instinct, with the science that only a detailed process and through research can provide. Our attitude towards our methodology is traditional but incredibly robust. Despite the fact we live in a highly technological age, we believe in the value of human connection when it comes to our work. We invest in a lot of facetime with our clients and candidates and we encourage our clients to invest in that time with us too. This enables us to have continually open discussions around processes, and to overcome obstacles effectively with those we are working with, albeit driven by the underlying agenda of filling a given role. Transparent reporting is a key factor for us too. We provide detailed longlists, market insights and intelligence, and incredibly thorough candidate reports on every search that we handle. Our goal is for our clients to have full-view of the search process from start to finish, and to develop a real understanding of the market in which they are hiring as part of the exercise. This enables people to truly understand why they are hiring one individual over another.
MG: And amongst search firms in the market, does HK have a clear differentiating factor that you trade off?
HK: Most definitely. Our longstanding focus on governance functions has consistently given us an edge in the processes we run. In our experience to date, it is one of the key reasons why our clients work with us – our understanding is naturally focussed and more detailed than a generalist firm, and our network amongst what is a fairly close-knit community is particularly well-developed. Risk, compliance and audit are continuing to develop as disciplines as well, and we are right on top of that in terms of subject matter expertise, best practices, what strong leaders look like and so on. The other key advantage that we have is that we are owner-managed; we strike an effective balance between winning the work by having our clients place their trust in us, personally, and doing the work, in that our presence and input through the introduction and hiring process is truly value-adding to clients. Plus we love doing what we do – we’re hugely motivated by the mission of preserving and adding to our firm’s legacy, and supporting the strengthening and increased resilience of the financial services industry.
MG: How should your clients expect to work with you? What do you ask of them?
HK: Whilst the onus is obviously on us to get the job done for our clients, the success of a search exercise depends hugely on the relationship we are able to strike with the stakeholders of the search. Of course we can map the market, meet people, sell a role and bring people to the table, but we also need to be able to work closely and openly with clients in order to manage the search successfully post the shortlisting stage. It is not easy to hire leaders in the governance and controls functions so joining all the dots within an organisation is key – it is important that everyone involved is aligned when it comes to the reason for the hire, and the profile and impact of the person required. Crucially, we must be able to talk openly and honestly with clients at every step of the way in order to navigate any obstacles that may occur. On a more process-focused point, it is important that a good degree of momentum is maintained once candidates are introduced to a client. These hires can take time, of course, but allowing a search to take months due to internal diary management or lack of communication around changing plans can damage the integrity of a shortlist, and the engagement of those on it. Ultimately, the search business is a people business, through and through. We are only successful if we treat everyone we interact with respectfully and stay in close contact with those we are working with and for. We ask for the same back in return.
MG: What do you think the future holds for the search industry, and for your business in particular?
HK: Well, like any business person, we hope that the future holds plenty more work! Plenty more business for the firm, interesting assignments for our team to work on, and genuinely, more scope to make a positive contribution to the improved governance of the financial services industry. To focus on one particular area, we are finding the board-level search work we have been doing of late absolutely fascinating, so we are hopeful that there will be more opportunities to help clients to find INEDs for their boards in future. For the search industry, we think the future is generally an exciting place, although there are a few pitfalls for us and our peers in the search industry to watch out for. Advances in technology that may change and redefine how we interact with clients and candidates are already here: we’re all in constant communication thanks to mobile communications and mobile internet, and social networking has brought us all a lot closer, which is both very helpful and also a competition factor. There’s a tendency towards more detailed assessment of senior individuals, in order to understand the likelihood of success in a given role from one person to another. A facilitator of that analysis is the field of psychometric-driven leadership assessment. Almost every large firm we speak to has an interest in psychometrics and how we use them, and progress in fields such neuroscience, behavioural theory and social anthropology will continue to drive advances in that space. We think that is exciting, especially when a general psychometric assessment is tailored to the particular requirements of a senior governance role, like a Chief Risk Officer or modern Chief Compliance Officer. Returning to our business, we’ll maintain our specialist focus on our key areas, and continue to increase our footprint in London and Edinburgh. A Europe office opening as a reaction to Brexit is almost a certainty. Brexit is a bit of an extraordinary situation, and the outcome remains unclear, but most of the firms we have spoken to our doing the best to turn the situation to their advantage, which seems like a constructive approach. We’ll respond to Brexit in our way because of the implications the process has for London, which is our key market, but also because of the size of the industry on the continent. There are huge opportunities there. London remains our home though – the City is in our blood, and it has always been a fantastic place to work.
