If you are a small business, you may be wondering what a Non-Executive Director does. If you are a larger one, you may already know, but then again…
The UK Corporate Governance codes states, “Non-executive directors should have sufficient time to meet their board responsibilities. They should provide constructive challenge, strategic guidance, offer specialist advice and hold management to account.”
There is so much more that a good NED can bring: problem solver, cheerleader, financial scrutiniser, planner and most importantly someone who tells you as it is, not what you want to hear. A good NED will bring integrity and will always maintain their independence.
It is critical to see the wood from the trees, but often organisations need a little help. Constructive criticism is often required. Rigorous analysis needs to be done and tested, but sometimes the most important strength is a creative viewpoint, to find the solutions that seem out of reach.
Whatever tools your business uses, performance measurement against company strategy and objectives is vital to take the organisation forward.
Sometimes it is easy to lose objectivity and focus in regard to people, their performance and rewards, which is why you need someone who can take an independent viewpoint.
Environment and society
It is sometimes easy when you are in the “bubble’ of your business and your day to day challenges to fail to take note of societal changes and expectations. In years to come your commitment to the world we live in may be the difference between success and failure – you must not lose sight of this important area.
You are known increasingly by the company you keep; and your company is no different. The right sort of connection can make a real difference.
Finance and Governance
Your finances need to be robust and in order, so expect to be challenged robustly. Expect your risks to be questioned and evaluated, and your systems and processes to be tested.
Support and Backing
Most NED’s try to be the Executive’s conscience, giving them the support and backing they need to move forward, and offering constructive criticism when required.