13 Jul 2021
Our last newsletter focussed on the role of a Trustee, and we get just as many questions regarding the role of the Non-Executive Director, from what does NED mean to what’s the difference between a NED and a Trustee and the most asked question, how do I secure one? So, below I’ve done a little deep dive which I hope you’ll find helpful…
A NED is a Non -Executive Director and they are a member of the board of directors. As a NED you are not a part of the executive board but rather, much like a trustee, are the custodian of corporate governance and are there to advise on long term strategy. You are expected to use your hard-earned expertise to help the organisation from an objective standpoint, with its strategy, performance, people, and risk analysis. You will also be expected to carry the same legal duties as the executive team, and have the same potential liabilities so you’ve checked whether the company’s insurance covers you or not (it normally does but you should definitely double check)
Fundamentally, you are there to listen, encourage, support and challenge in equal measures ensuring that the organisation continue to stay focussed on their strategy with a clear route to achieving their goals. Because of this, organisations will be looking for people who have either specialist knowledge within their sector or thorough experience of the stage of the growth the company is in, more than likely it will be both. As the needs of the business changes so too will the role of the NED, if the NED had been initially bought on to facilitate accelerated growth, as that’s their area of expertise, the business may require a NED with a different set of skills once the business moves on to the next stage in their journey.
A NED appointment can also often be at the request of shareholders, and in that instance, you are also there to provide additional confidence that their investment is not only being used effectively but is in a safe pair of hands. You may also be expected to leverage your network of contacts outside of the business for the benefit the company.
Unlike Trustee positions, NED positions are paid, how much is offered depends on the amount of time requested of you. Time commitments will vary from organisation to organisation and the more time typically equals more money, we can see salaries start from £4,500 and increase to north of £100k (you may also be offered equity but that is not a guarantee). Your time commitment may only be for a few days a month, but you will still be expected to show the same high level of commitment to the success of the organisation as your executive colleagues and if necessary, due to the organisation becoming distressed or involved in some type of contentious situation, your involvement may have to increase.
Securing your first NED role can not only be a little intimidating so below are some key things to remember:
- Do your homework before applying and make sure you have the right skills that the organisation needs at that time
- Try to get as much previous board level experience as possible – we always suggest that a Trustee position is a good first step, they’re not renumerated and there are more of them but they are able to give you an excellent solid base of relevant and transferable experience
- Be prepared to apply for more than one opportunity as demand for these roles outstrips supply but keep an ear to the ground and be selective
- Utilise your network as well as build relationships with a few select recruiters – we’re here to help.
Please come along to our drop in clinic tomorrow if you have any questions.
Next month - Are boards getting more diverse?