How to Become a Non-Executive Director
Boards are spending more time in answering the crucial question of the skills and qualities they need to enable their company to be successful; some analysis such as a Board Evaluation (either internal or external) should be carried out to ascertain the required composition of the Board. A Non Exec is an excellent way to plug a skills gap which can include: industry knowledge, strategy, operations, entrepreneurial flair, risk, safety, finance, Corporate Governance, technology (digital, social media & cyber), a customer champion etc. some of these skills are new and represent the evolution of the role of the Non Exec.
The UK Corporate Governance Code provision B.1.2 states: “Except for small companies, at least half the Board, excluding the Chairman, should comprise Non-Executive Directors determined by the Board to be independent. A smaller company should have at least two independent Non-Executive Directors”. Companies should ensure they have a sufficient number of NEDs covering a broad spectrum of their required skills. In addition to diversity of skills, an effective Board will have gender, background and age diversity to avoid "group think" which as we saw with the Banks can be highly destructive.
The average number of roles a Non Exec should have is reducing as the responsibilities of being a Non Exec are being taken more seriously requiring a greater time commitment. We advocate that Non Execs should not have more than 3-4 roles, enabling them to spend more time on each.
Our partner, First Fight Non-Executive Directors, has placed many first time NEDs and see them being more enthusiastic, more committed and with more time to understand the business than the old fashioned “generic Non Exec “ who was on multiple Boards and cannot make a full contribution to all the Boards they sit on. They strongly advocate broadening the Non Exec gene pool and fewer roles per Non Exec mean that more new Non Execs are required.
Successful Directors and company owners are retiring or selling their businesses at a younger age and they have the experience to become excellent Non Execs. These Directors often become bored by no longer being involved in a business – a Non-Executive Director role with an interesting company is the perfect solution.
There are several benefits to becoming a Non Exec which will enable you to:
• maintain a business involvement
• give something back to the business community
• use your business experience to contribute to the effective running of Boards
Non Exec roles on average require 25+ days per year which enables you to put together a portfolio of several (3-4) roles.
To improve your chances of securing a Non Exec role we recommend:
• Creation of a specific Non Exec CV which demonstrates the diversity of your skill set
• Explain your area(s) of business expertise ideally in one or more of these four key areas: Strategy, Operations, Entrepreneurship & Finance – but also include specialist areas such as digital communications, social media, mentoring and your understanding of Corporate Governance
• Add your suitability for Sub Committees: Audit, Risk, Nomination & Remuneration
• Attend a Non Exec training Course or Workshop
• Acquire a pro bono role such as Trustee or Governor at a school or charity and put it on your CV to help overcome the often heard: “you can’t be a Non Exec until you’ve been a Non Exec”
• Consider looking at investing Non Exec roles in growth companies (more are embracing the benefits of NEDs) if you feel comfortable with this
• Network, network, network!
First Flight's Non Exec Workshops are an ideal way for potential Non Execs to gain a comprehensive technical overview and practical insight of what being an effective NED is all about, what companies will expect of them and how to further their Non Exec career. Their next Workshop will be held on Thursday March 20th 2014 at Regent's University in London. To download a booking form visit: www.nonexecutivedirector.co.uk/non-exec-training.asp.