The Non-Executive Director (NED)
A non-executive director (NED) is first and foremost a company director. They therefore have the same duties, responsibilities and potential liabilities under company law, as the executive directors. However, though NEDs are responsible for the success of the company, they have no executive responsibilities. They are also not employees.
It is therefore vital that when you offer an NED position, you make sure the individual completely understands your company’s operations and procedures.
Knowing your organisation has a strong induction process in place is therefore imperative.
The reason for this is because you’ll need to explain the precise risks, rewards and expectations to those considering the position.
This includes relaying important information such as whether they will be suitably remunerated for the risks involved. As well as this, you will also need to explain their precise role. For example, whether they are being given sufficient time to undertake the role, or whether the role has limitations (which may hamper their effectiveness).
Why Non-Executive Directors are good for your governance strategy
Using a non-executive director forms an excellent part of good governance strategy. It can strengthen your board by bringing in new skills, for example, improving areas such as diversity, accountancy, advocacy or indeed, governance. An NED can also help you keep an extra check on activities.
However, the role of the NED is also very different to that of the executive director. Expectations need to be managed, roles clarified and skillsets considered from the outset.
Resolute Consultancy can help.
We can help you review the structure of your board. This means looking at existing skillsets and backgrounds, together with market and company considerations.
Once complete, we can compile a board pack for potential candidates. Next, we can help you implement a comprehensive induction procedure. This will necessarily be very different from the usual staff induction process.
As well as this, we can assist new appointments by advising on the duties and responsibilities under the Companies Acts. This means you can rest assured your successful candidate understands how best to serve the company.
Resolute Consultancy are also directly available if you are looking for an experienced NED. If so, please contact us for a confidential discussion.