Why You Need a Non-Executive Director

A Non-Executive Director is exactly that: an individual who sits on your Board of Directors however is not a member of your executive team. Non-Executive Directors are involved in planning, policymaking, monitoring your Executive Directors, and ensuring that the Board acts in the best interest of shareholders. They do not oversee day to day operations or management.

A Non-Executive Director typically joins a Board in order to challenge how a company performs and directs itself. They are often seen as more objective than Board members who hold managerial roles, who may face conflicts of interest or issues within the Board.

In some cases, what is expected of a-Non Executive Director is fairly specific, providing mentorship or stewardship for younger companies. For example, a former CEO may exit a successful company, then provide these services for a start-up in the same field, utilising their highly specific knowledge and past experience in the industry.

Furthermore, these individuals help ensure that your Board is accountable. They help you determine and manage your strategy and performance, provide insights into potential issues that could affect your business, and reveal problems that may not yet be apparent. They ensure that stakeholders are being served, that the organisation is being fiscally responsible, and that controls, if needed, are in place.

The Non-Executive Director commits a significant amount of time to helping your company. These individuals often provide services for more than one company at once, and as a result they should tell you about any major time commitments they have and what their schedule looks like.

Finally, the Non-Executive Director should provide value through their extensive network of contacts, helping you get access to venture capital and other resources as needed.

What does a non-executive director do?

An NED sits on a business’s Board of Directors but does not have the legal responsibilities that are tied to an Executive role. They act as independent oversight, free from the possibility of conflict of interest department heads can experience, to challenge the Board’s decisions.

What’s the difference between Executive Director & Non-executive Director?

Executive Directors have a legal obligation to look after a business’s growth and provide profit for the shareholders. They tend to head up specific departments of the business. An NED does not share this responsibility and tends to act as a neutral voice to the Board as a whole.

What makes a good non-executive director?

A great Non-Executive Director has to be able to stand up to the executives and argue respectfully for their role. They provide an independent voice of reason to a Board and must speak up when they feel that personal agendas are getting in the way of what’s best for the business. But they also act in mentorship and advisory roles so should be good at teamwork and leadership.

NB: information researched online from various sources. Thank you to their helpful information