Briefing: The contrarian’s guide to nepotism

It will surprise no one that knows me to learn that I’m a bit of a contrarian.

That mindset has served me pretty well across the boards I’ve served on and, as part of a management toolkit, the willingness to take an unpopular stance or seek out alternative views has led to some pretty creative breakthroughs.

So, I wanted to see if I could turn that contrarian mindset toward tackling an issue that’s ostensibly seen in a purely negative light – and yet can be beneficial.

It’s also already reality of our industry and many others, so it’s a topic that can’t be ignored.

The word ‘nepotism’ carries all sorts of negative connotations, as it must. And yet, as I’ve learnt over the many years of hard experience, the real world has a habit of making things just that bit more nuanced than they would otherwise first appear.

Insurance undoubtedly has a strong thread of nepotism running through it – and running an eponymous company with your family’s name above the door could be seen as the ultimate example of this.

It requires some self-reflection to ask ‘am I the best person to take over my family company?’ But, actually, the better question might simplynbe, ‘am I the only person that can?’

Like so many of us, I fell into insurance. In my case, my father’s illness was the catalyst that forced my hand. But it was absolutely not the original plan. My first plan was to become a middling jolly naval officer, which appealed a lot more than donning a suit every day. And yet I obviously wouldn’t swap it for the world now.

And this is at the core of the questions that we have to practically answer before we dismiss nepotism out of hand. What talent would the industry otherwise have lost out on if it wasn’t for family, friends or connections working in insurance?

Facing reality

I spoke to one legendary insurer founder recently, who, having read PPE at Oxford, decided not to try and rule the world, but rather fell into insurance via one of his dad’s unloved subsidiary companies.

How many thousands of careers does he support now? How many grateful insurance companies have underwritten risks, and how many businesses have enjoyed protection, because of one of the demonstrably good guys running a fantastic business?

Why would an Oxford PPE graduate have got into insurance for any reason other than necessity – being the only person that could step up?

Let’s be honest, despite our best efforts, insurance will likely never be a top-tier destination and it’s always going to be an uphill struggle to fill the talent gap – especially given the impending retirement cliff edge.

As someone who has pushed hard on apprenticeships at my firm – having undertaken the toughest of all apprenticeships with my own father – I can say that, while we have found difficulty attracting talent from general employment markets, we do exceptionally well with those who already have family friends or connections in insurance.

The best advertisement for a career in insurance is someone already in it, who always tend to love it and therefore advocate successfully to their circle.

Positive promotion is a key aspect of why, when a youngster looks to someone they trust or admire and thinks “well, they’ve done pretty well”, they can see that there is a pathway to success in an effusive proponent of the industry.

It’s not to say that there aren’t negative aspects of nepotism. Not least the problem surrounding internal promotions, where connections matter more than talent.

But one thing I do know is that if talent is not looked after, it quickly disappears, so promoting friends and family beyond their talent limits is a high road to losing your most valuable asset – your people and maybe even your business eventually.

There is also the potential for weakened governance due to family ties.

Furthermore, we must do everything we can to diversify the talent pool, especially to better reflect the changing nature of British society. It will be all the more important to build deeper connections with different communities and to ensure representation that makes us look like a modern and inclusive industry. Nepotistic tendencies might be a challenge to achieving this.

Yet the blunt reality is that we do need to fill the funnel with talent. To do so, frankly, we don’t have a choice but to do our bit to attract talent and the most obvious way to do that is to talk to the people we know, especially youngsters, and encourage them to consider insurance as a potential option. Frankly put, we need them.

You are therefore the industry’s best and most cost and time-efficient recruitment tool. And given that we do not operate in a perfect world or ideal market conditions, but rather in the real world, we have to accept shades of ambiguity, be realistic and ultimately tolerate these compromises.

I don’t think that catchall notion of nepotism will ever disappear, as crudely labelled as it is. We arguably just need a better name for it.