Improve your Chances of Securing your First NED Position
If you are an executive thinking about taking on your first non-executive directorship there are a number of key considerations you need to make. First time NEDs are often surprised by the huge difference in the nature of the role. It can take time to adjust to being a non-executive as opposed to a full member of the executive team.
As an NED you need to bring an impartial, independent view to the boardroom. Your role is to scrutinise performance, constructively challenge, offer strategic input, identify new opportunities, introduce contacts, and highlight issues that executive colleagues have not.
Time management is another vital skill; NEDs can easily find themselves working far more than the two or three days per month they are typically remunerated for.
With a big push on diversity in the boardroom, there is huge demand for experienced all-rounders from a range of backgrounds who can bring industry specific expertise in key areas. Those with a background in risk/compliance and audit are particularly sought after given the increasing focus on corporate governance. But it can be difficult to secure your first NED position with no previous experience in a non-executive role. It can help to first take on a non-remunerated role in the public sector. You should arrange coaching/mentoring, ideally from an experienced Chair or NED with a number of non-executive roles under their belt.
Whether you are looking to move from an executive role into a portfolio career of non-executive positions or combine the two, you need to build up a range of marketable skills and develop your networks as it is likely to be a headhunter who is conducting the non-executive director search.
It is important to find the right non-executive role; it needs to be a good fit with your skill set and culture/values. You need to think carefully about the type of company whose board you want to join. After all, you will be carrying a great deal of responsibility for the company’s financial performance, controls and risk management, as well as executive remuneration and the appointment and removal of executives.
Your own remuneration is another important consideration; it will bear no relation to executive salaries and, many would argue, to the actual responsibility held – and there will be no bonuses or share options.
NEDs looking at holding a number of non-executive directorships can find it difficult to build up portfolios because of potential conflict; for example holding positions on the boards of businesses in the same sector. They also need to take care to not change their directorships too often, or their reputation for doing this could precede them.
Phil Moorhouse, Chairman of Newcastle Building Society for the last four years, has held a number of senior board positions, is also Chair of Molins Plc and sits on the board of North Group. He was named North East Non-Executive of the Year 2015 at the North East Business Executive of the Year Awards.
Phil said: “Perhaps surprisingly after executive careers, Non-Executive Director roles can also be challenging, interesting and enjoyable. NEDs need to remember that the executives live and breathe the business on a daily basis, but NEDs can help keep focus on the bigger picture and support as well as challenge the executive to deliver strategic goals. Don’t rush into the first non-executive position that comes along; consider carefully and take some time to get the right one. Sector experience isn’t always necessary or desirable; identify those companies where your experience might fit with wider business issues and where you could add value. Personally I have found a sense of humour and enthusiasm very helpful in contributing to the all-important culture of an organisation.”
Author: Pascale Gara is a Consultant in the Chair & NED Practice at HW Global Talent Partner.
Contact her at pascaleg@hitchenorwakeford.com or +44 (0) 781 258 2486 for a confidential discussion.
