Thriving as a NED during COVID-19
19 June 2020: What do non-executive directors (NEDs) need to know about working effectively during the pandemic?
Non-executive directors (NEDs) should be a truly independent presence on any board. During crises such as the COVID-19 pandemic, the role of a NED does not significantly change, but certain aspects of the role become much more important.
So says Gary Dixon, an Astrophysics graduate and chartered accountant who has extensive NED experience across the arts, higher education, and business arenas. He recently presented ICAEW's 'Thriving as a NED during the COVID-19 crisis' webinar, which was hosted by Julia Root-Gutteridge, ICAEW's board effectiveness manager.
Since retiring, Dixon dedicated himself to several NED roles, including Chair of Council at the University of Leicester and the Universities Superannuation Scheme Ltd, Britain's largest pension scheme by assets.
Independence is everything
Dixon stresses the importance of NEDs being genuinely independent. They need to know who the stakeholders they represent are. They should not have shares or a bonus linked to performance; that could potentially compromise or taint that genuinely independent stance and overview.
Stakeholder engagement has been crucial during COVID-19, says Dixon. "For the theatre that I sit on, we have a number of different stakeholders, but we receive public money from the Arts Council England and our local city council. So as vice-chair of the charity, I've spent time on calls with people like city mayors and Arts Council reps, to make sure that they understand what's happening."
Information flow is also essential, as is giving the executive "the comfort and confidence" needed to know that they are supported. Ultimately, the aim is to make clear that the charity would not be in any difficulty throughout what is a challenging period.
A university presents an entirely different level of stakeholder engagement, due to the sheer size and complexity of its landscape. This ultimately translates into NEDs having less stakeholder interaction, explains Dixon.
Communication is key
Given the outbreak of COVID-19, the Department for Education and the Office for Students had declared a heightened risk attached to universities, so new guidance and parameters were quickly produced and distributed to council members.
Factor in the closure of campuses, outstanding research projects and the fact that thousands of students still need to learn, and the role of effective communication with the right tone becomes paramount, says Dixon. The need to reassure prospective students and their parents that the university will still be in the business of enrolling students in September and October is equally important.
More generally, NEDs give an extra level of objectivity to an organisation, with the ability to "step outside the business and return wearing a different hat".
In a theatre setting, that may mean renegotiating performance contracts into 2021 and beyond, says Dixon. The forthcoming autumn term in the UK higher education sector is "facing a cliff edge" as £7bn of anticipated income may be missing. "With little govt help so far, the exec team has to look very carefully at how to deal with that kind of change."
Meanwhile, the lockdown has meant a lack of "interpersonal" connection. Zoom and other video conferencing tools can only go so far; it can bring an extra level of formality that is not always desirable.
"From a personal perspective, I miss the interpersonal elements such as an arm around the shoulder, or glass of wine or cup of coffee with the chief executive or another board member, which is not quite so easy to do".
For those looking for their first foray in the NED world, Dixon suggests looking for a voluntary role as a trustee as a sound route to developing useful experience, especially as the NED market is a highly competitive field.
Demand for right skills
The coronavirus crisis has also created an appetite for skills. Dixon recommends you keep your CV up to date and ensure that it succinctly reflects what you can achieve. If your qualifications do not exactly match up, do not apply and wait for the right match to emerge.
Use search firms for pro bono voluntary roles and to build relationships with executive search firms to secure that perfect NED role.
In the webinar, Dixon advises on what is optimum tenure, how to keep your skills matrix fresh and challenging as a symbiotic benefit for both the individual NED and the organisation to which they are affiliated.