A non-executive director, also known as an NED is typically brought in to a business to enhance the skills base of the board of directors and will generally serve the company on a part-time basis. Whilst they are not part of the executive management team or an employee of the company, they are normally paid a fee for the time they devote to the company. The purpose of a non-executive director is to bring the company valuable business expertise and a independent judgement in relation to;
- Performance – Analyse performance of management to ensure goals and objectives are met.
- Strategy – Challenge and contribute to the development of an effective business strategy.
- Risk – Be confident that financial information is accurate and that systems of risk management are robust.
- People – A prime role in helping to appoint, restructure or remove senior management members.
One of the major benefits of hiring a non-executive director is that he or she will have experience far greater than anybody within the company at the present time. They will hopefully have ‘seen it all before’, be dynamic, have operated at board level within your industry and experience in taking a company through the stages you are predicting to be suitable for yours. What a Non-Executive Director can bring to your business?
- A fresh perspective
- Wealth of experience
- Contacts / connections
- An objective view
- Ability to keep management in check
An NED is undoubtedly an asset. They should be seen as a long term source of business consultancy, primarily in the areas of strategy and development. For a company, recruiting a non-executive director can help take the business to the next level. For the NED, it can be a unique challenge and satisfying experience.