IT MAKES a company director’s day to open a magazine and find a picture of an A-list celebrity clutching the company’s brand of phone, cola or sunglasses. That is worth any amount of paid advertising.

Now some firms are putting a bigger stake in celebrity than the mere hope of a chance encounter with the paparazzi — by appointing well-known faces to the board.

Anna Ford, the former newsreader, joined the board of J Sainsbury two months ago. Nick Mason, the former Pink Floyd drummer, is on the board of HR Owen, the car dealer.

Small and medium-sized companies are getting in on the act, too. Hot Tuna, a small surfwear company that floated on the Alternative Investment Market last year, announced this month that Elle Macpherson, the Australian supermodel, was joining their four-strong board as an executive director.

Ex-Big Brother housemates need not rush to ring their agents in the hope of landing a non-exec position, however. Kingston Smith LLP, the accountant, says that companies think very carefully before they ask a celebrity to join the ranks. Paul Samrah, a partner at Kingston Smith, said: “The best reason for asking a well-known face to join the board is if they are associated with the sector you are in and if they are switched on and can offer value for money in the boardroom.”

Ranjit Murugason, executive chairman of Hot Tuna, agreed. “Elle Macpherson has a successful business of her own. We don’t see this in any way as a celebrity endorsement, in fact it is the opposite of that,” he said. “Elle has built a brand around herself and we want to benefit from her brand awareness.”

As a working model and the founder of a successful lingerie and swimwear company, Ms Macpherson may miss meetings because she is travelling. Mr Murugason sees this as an advantage. “Part of the reason we wanted Ms Macpherson on the board is that she is extremely mobile and her effectiveness is recognised all over the world, especially in America.”

Mr Samrah said that celebrities joining a firm’s board should be fully aware of their responsibilities. “The celebrity should ensure that they are aware of the director’s fiduciary duties. Key duties include safeguarding the assets and liabilities of the company. They will also need to be aware of the financial status of the company and should conduct their own due diligence.”

Asking a celebrity to join the board will raise a firm’s profile, but Doug Richard, chairman of Library House, a consultancy that monitors new companies, said that the firm must be prepared. “A celebrity can provide exposure to a company, which is generally a good thing — except if a company is not ready for exposure, either because they haven’t got their act together or because their products are not ready.”

There may be some fallout when a celebrity director leaves — but that does not worry Mr Murugason. “If our target market of young people aged between 18 to 25 are buying our clothes, it is because they like them, not because of who is or isn’t on the board,” he said.

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