What is a Non-Executive Director? The NED’s role is to provide a creative contribution to the board by providing independent oversight and constructive challenge to the executive directors.
Of the utmost importance is NEDs’ independence from the company management and any of its ‘interested parties’. This means they can bring a degree of objectivity to the board’s deliberations, particularly in areas such as risk management, the interests of shareholders, business performance, and the effectiveness of the management team.
There are a growing number of private companies, including relatively small ones, that are now actively searching for the ‘right’ NED.
It is widely accepted that NEDs have an important contribution to make to the proper running of companies and, therefore, more widely to the economy at large.
NEDs are usually chosen because they have a breadth of experience, are of an appropriate calibre and have particular personal qualities. Additionally, they may have some specialist knowledge that will provide the board with valuable insights or, perhaps, key contacts in related industries.
NEDs cannot give the same continuous attention to the business of the company. However, it is important that they show the same commitment to its success as their executive colleagues. Also, as the Cadbury Report (1992) said, they “should bring an independent judgement to bear on issues of strategy, performance and resources including key appointments and standards of conduct”.
My Non-Executive Director services
Several of my mentoring assignments have developed into NED positions, including roles as a board consultant/advisor, and Chair.
If you would like to explore what is a Non-Excutive Director and how I might add value to your company as an NED, click here to arrange a chat.