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The role of the Non Executive Director (NED) is changing. A few years ago, when we started in the recruitment industry, a NED role might have been viewed as mainly about complying with corporate governance best practice. However, the role has dramatically evolved, and the expectations of NEDs from executives and other stakeholders is far greater than it has ever been. The modern NED will support the Board and CEO by challenging and offering a different perspective. With the modern CEO under increasing pressure, add to that the current turbulent political and economical climate we find ourselves in, it is extremely beneficial to have trusted NEDs to advise and support.
That said, several recent high-profile business failures have thrust the NED onto the front page of not just the business publications but our national newspapers. The recent collapse of Carillion in January 2018 is a prime example. The second largest construction company in the UK went into liquidation with a huge pension liability and over £2 billion of debt to suppliers, sub-contractors and creditors. Their downfall was described by a Parliamentary Inquiry as a “failure of a system of corporate accountability” and their board, five out of seven who were NEDs, were described as “both responsible and culpable for the company’s failure”.
When we see a corporate governance issue, it often comes down to whether the NEDs have truly challenged both the strategic direction and decision-making that failed company has made. To be a good NED, that ability to challenge, now more than ever, is the critical factor. A NED should be independent thinking, valued for their objective insights, sharing a wealth of experience and networks, and ensuring best practice and excellent corporate governance. This external perspective can also offer a fresh insight into the strategic direction of your organisation or bring diversity to your Board. However, above all of those things, that ability to be a ‘critical friend’ by constructively challenging the Executive Directors, in my opinion, is the key to being a good NED.
Why NED recruitment is vital to an organisation
NEDs round off a Board by not only providing experience and knowledge that other directors may not have, but also by being able to take a slightly detached, perhaps more objective view of issues affecting your business. As a leading executive search and senior management recruitment firm, Barron Williams have provided NEDs to organisations of varying shapes and sizes. They partner with us to recruit high calibre individuals who will add significant ROI to their organisation. We have the experience and the network to quickly and easily identify the right NED talent. Approach us, and we will already have several people who may come quickly to mind. We are speaking to high calibre senior execs and NED’s on a daily basis. Others in our industry would say the same of course. However, they may also look to charge similar fees to those they’d charge if the brief was to find a new CEO or CFO for example.
To us that is now just counterintuitive. We’ve adopted a change of approach to the recruitment industry norm. We will structure our fees to reflect the organisation. We can view a NED search assignment almost like a “loss leader”. We will cover our costs, of course, but we view NED briefs as a great way to establish relationships with new clients and to cement our relationships with existing clients. To establish good will. Long-term relationships are what we strive for. We want to build long lasting mutually beneficial relationships and ensuring that our client organisations have great NED’s fits perfectly with that strategic goal.
What makes a good NED?
We’ve helped a number of people find their first NED role. It can be a difficult role to find, you must have the relevant skills and experience to add value. An organisation wants to find individuals who will analyse their performance, constructively challenge the Board, offer strategic insight, help identify new strategic opportunities, perhaps introduce a new network of contacts, and highlight issues that other execs might of missed. However, for me, probably the most important skill for executives taking on a NED role is excellent time management. Sounds simple, however, this is the part many people under-estimate. You need to find the time to fit that extra responsibility into what may be an already busy schedule. As a NED you could easily find you are committing more than the day or two a month you are contracted for. Effective management of your time is critical.
At the moment, with greater emphasis on corporate governance, there seems to be an incredibly high demand for NEDs with risk and compliance experience. If you are thinking of a role as a NED for the first time, then research what skills are needed, look at the gaps in your CV, identify ways you can gain that experience. Securing a first time NED role can be a very difficult challenge, and we have spoken to many over the years that want to make the move. My advice is always the same, build your network. A strong, relevant network will introduce you to the right people and then opportunities. If you don’t have any NED experience, then another good starting point is to take on a non-remunerated role in the public or charity sectors. Demonstrate to people what you can do, gain experience and maybe fill those skill gaps on your CV at the same time.
If you are interested in finding the right NED’s for your organisation, then at Barron Williams our partnership-led approach to working with clients has helped us develop in-depth knowledge and understanding of the needs and objectives of senior level recruitment. We will challenge and ask the difficult questions to make sure we match an organisation with the right NED candidates, and very cost-effectively.
If you’re looking for your next role, then please feel free to Upload Your CV or Call Us for an exploratory conversation. If you’re looking for a senior executive for your organisation, please use our Client Upload Form or Call Us now.
