Non-Executive Directors

Why You Need a Non-Executive Director

A Non-Executive Director is exactly that: an individual who sits on your Board of Directors, but is not a member of your executive team. Non-Executive Directors are involved in planning, policymaking, monitoring your Executive Directors, and ensuring that the Board acts in the best interest of shareholders. However, they do not oversee day to day operations or management.

A Non-Executive Director typically joins a Board in order to challenge how a company performs and directs itself. They are often seen as more objective than Board members who hold managerial roles, who may face conflicts of interest or issues within the Board.

In some cases, what is expected of a-Non Executive Director is fairly specific, providing mentorship or stewardship for younger companies. For example, a former CEO may exit a successful company, then provide these services for a start-up in the same field, utilising their highly specific knowledge and past experience in the industry.

Furthermore, these individuals help ensure that your Board is accountable. They help you determine and manage your strategy and performance, provide insights into potential issues that could affect your business, and reveal problems that may not yet be apparent. They ensure that stakeholders are being served, that the organisation is being fiscally responsible, and that controls, if needed, are in place.

The Non-Executive Director commits a significant amount of time to helping your company. These individuals often provide services for more than one company at once, and as a result they should tell you about any major time commitments they have and what their schedule looks like.

Finally, the Non-Executive Director should provide value through their extensive network of contacts, helping you get access to venture capital and other resources as-needed.

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Frequently Asked Questions (FAQ)

What does an independent non-executive director do?

An NED sits on a business’s Board of Directors, but does not have the legal responsibilities that are tied to an Executive role. They act as independent oversight, free from the possibility of conflict of interest department heads can experience, to challenge the Board’s decisions.

What is the difference between Executive Director and Non-Executive Director?

Executive Directors have a legal obligation to look after a business’s growth and provide profit for the share-holders. They tend to head up specific departments of the business. An NED does not share this responsibility and tends to act as a neutral voice to the Board as a whole.

What makes a good non-executive director?

A great Non-Executive Director has to be able to stand up to the executives and argue respectfully for their role. They provide an independent voice of reason to a Board and must speak up when they feel that personal agendas are getting in the way of what’s best for the business. But they also act in mentorship and advisory roles so should be good at teamwork and leadership.

…invaluable strategic business advice in many areas…

Ian Gosden, Managing Director, Higos Insurance

…valuable assistance in setting objectives and arranging strategy plans…

John Freshwater, Managing Director, Permaframe

…no hesitation in recommending him as a Non-Executive Director…

Colin Flaherty, Chairman, Academy of Business Strategy

…I was delighted to hear what a fantastic fit Boardroom Advisors were for my client…

Chris Budd, Founder, The Eternal Business

…he was a real asset in supporting us through rapid expansion…

Adam Ellis, Managing Director, Five Rivers

…he has had a significant impact on our approach to how we work as an agency…

Christian Harris, Managing Director, Sticky