Benefits of Hiring a Non Executive Director
Most people in business will have heard of Non Executive Directors, also know as a NED. In a start-up environment, the hiring of a non executive director can be of huge benefit for both the business and its owner. A good non executive director will bring: experience, opinion, knowledge and contacts. Generally there will be no family members who understand, customers, suppliers and employees in this way, so the value of having this form of support at board, senior or strategic level is significant.
The decision to appoint a non-executive is not necessarily a ‘big’ or ‘onerous’ one however, what is important is the experience that they will bring. Obviously they will have needed to have operated at board level, within your industry, possibly even taking a company or business through the stages you are envisaging and to a suitable and successful sale. They need to be able to add a dynamic that you do not possess.
Once you have decided to appoint a non-executive Director then you need to ascertain the role they will perform. This will almost certainly see them attending board meetings, but may also be as an ambassador to outside events or conferences, representing your business, when you cannot or even just going there to see what the competition is doing. Think through some executive high level strategic roles, such as reviewing the sense of the 3 year business plan.
The time required from the non-executive is another pre-requisite to the appointment. There should be no less than quarterly board meetings, possibly even monthly, but then the impact may become less were it to be monthly visits. As of course one does not want to hear the same things and also the importance of the role is for the person to bring outside information, influences and market trends to the table. If the appointment carries some executive position such as agreeing wage/salary amendments then there will be specific times and dates that the meetings should be held.
What is the difference between a supermarket trolly and a non-executive director? You fill them both up with food and drink, but the trolly does have a mind of its own.
Overall, the non-executive must add value. He or she will be a great sounding board and should be utilised at every opportunity possible. A non executive director should be: the voice of calm and reasoning gained from experience.
Next week I will be discussing: 3 Ways to Motivate your Team. In the meantime, please do share your opinion on this post below.