The Role of a Non-Executive Director

The Chartered Institute of Personnel and Development (CIPD) refer to the difference between a main board director and a non-executive directors (NED) as sometimes difficult to differentiate. However, a NED usually stands back from the day-to-day running of the business, drawing alongside the executive team as required to facilitate the strategic decision-making process.

Their role is to complement the balance of skills and experience of the existing board; their value being at every level to identify and advise upon new challenges, initiatives and market opportunities, and to develop and refocus strategic plans.

NED’ should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. They should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible.

How does a Non-Executive Director operate? How would this work for both of us?

Typically, as follows:

• Part-time: we would decide on what this would mean for you
• Hands-off: not involved in the day-to-day running of the business; you probably have enough people involved in this now
• Self-Employed: this would suit us both, as I would be able to operate from macro perspective, with an independent view, whilst retaining my other business interests
• No contract of employment, rather a letter of appointment: this would be on a fixed-term basis i.e. 12 months
• No line responsibility: again, you probably have people to manage this already
• Without portfolio: I can use my expertise in all areas
• No Executive responsibility: however, able to attend board meetings in an advisory capacity. This could change in time, if you wanted it to
• Consider and review strategy: giving direction at all levels as required
• Macro view: not micro