Getting started as a non-executive director

Is it for you?

• If you have built up expertise over time, it is altruistic to share that knowledge in order to assist other businesses in becoming successful. It can be very satisfying to feel like you are making a real contribution and adding value. It also provides a great opportunity to widen your own personal skill set.
• If you are still working full time as a practising accountant, taking on a non-executive role will give you a broader perspective and an added insight to the issues which are at the heart of British business. It will give you hands-on experience in a way that is impossible to replicate.
• If you are currently working in commerce, taking a non-executive role on another board will give you a broader perspective, expand your knowledge of a new or less familiar business sector and generally give you experience which will be useful in your present role.
• If you are not already on the board, taking a non-executive or trustee role will help you to develop the skills you will need to be considered for a board position. That is why a lot of forward thinking companies encourage their talented executives to look for a non-executive role. They realise that their business will benefit as much as the individual.
• If you are in full time employment, taking on more than one non-executive role is really not to be recommended. Today’s non-executive is expected to give sufficient time to really make a difference, to get to know the company and its markets, to understand its metrics, and that takes time.
  
  The amount of time depends greatly upon the individual company and is subject to negotiation but typically the non-executive director can expect to spend at least 18 days per year for a small to medium sized company, and significantly more than that as the Chairman.
• If you are approaching retirement or are looking at your lifestyle and want to build more variety and flexibility into your life, then taking on a number of non-executive directorships in a plural career can be very attractive. 
  
  This is a particularly good option for parents who want to work in an intellectually stimulating environment but without the extreme working hours and commitments that come with high level positions. However, once again be aware of the time commitment involved in doing the job properly and be wary of over-committing yourself.

There are also many skills you will need to be an effective non-executive director, these include:

• integrity and high ethical standards
• sound judgement
• a willingness to challenge
• strong interpersonal skills
• the ability to deal effectively with conflict
• the ability to listen
• excellent communications skills
• sensitivity
• the ability to be persuasive and to influence decisions
• the ability to inspire confidence and respect in others
• critical thinking skills, creativity and strategic awareness
• business acumen
• a willingness to embrace change and innovation
• an inquiring and inquisitive mind
• an ability to assimilate, assess and analyse information, especially financial information
• a strong sense of teamwork
• strategic thinking skills and the ability to see the wider picture
• determination
• a keenness to learn new knowledge and skills
• an ability to identify potential problems and deal with risk
• knowledge of the relevant business sector or environment.

A lot of the above skills could be termed ‘softer’ skills. Being a non-executive isn’t all about business knowledge and expertise. As a non-executive director you have collective responsibility for decisions made by the board without having any direct control over the management team. It is therefore even more important to be able to understand the motivations and agendas of other people, to listen and read between the lines, and to be able to persuade, cajole and manipulate rather than direct.

The most important skill though is independence. In fact, many other jurisdictions don’t use the term non-executive director, they refer to independent directors. The whole point of a non-executive is that it should be someone who has sufficient personal experience, combined with a knowledge of the company and its markets to be able to make a positive contribution on a totally objective basis. In order to do that there must be no personal interest in the company at all.

Getting your first role

It is not always easy to get started on a career as a non-executive. Anecdotal evidence is that once you have your first role, other roles become much easier to find but that first one can prove tricky.

One major setback can be that companies tend to want someone who already has board experience as a general rule. If you don’t have existing board experience it might be worth considering taking a role in the not-for-profit sector and gaining experience that way, either in the public sector or with a charity. Charities are always looking for trustees with sound financial skills.

If there is a cause close to your heart, why not approach them and ask if they are looking for trustees?  All public appointments must be openly advertised on the Public Appointments website. Often such roles do not carry any kind of fee other than expenses, but the experience gained can stand you in good stead when going for a commercial appointment.

It is worth looking at the papers, mainly the broadsheets, and keeping an eye on the web but in practice not many vacancies are actively advertised. There are a number of job sites where you can register your details and potential employers can search for suitable registrants. If you do go down this route it is worthwhile making sure your profile is as up to date and detailed as possible to ensure you get notified of every possible opportunity.

When you do apply for a position, it really is important to put in the ground work to ensure that your application is as tailored as possible to the requirements specified in any advertisement. This does take time but it is better to spend the time writing a really good application for a few firms you think you would like to work for rather than simply sending out your CV indiscriminately.

You don’t have to wait for positions to be advertised of course. If there is a firm you think you could offer something to, particularly if it is a small firm which may not have got further than having initial thoughts about having a non-executive as yet, why not contact them directly? And remember the value of networking. Make sure all your contacts know that you are in the market for a non-executive position and attend any events which you think might widen your range of contacts.

Why them?

The importance of doing thorough due diligence before taking on a role cannot be overestimated. 

• You need to be certain in the first place that the board has clearly thought through the skills and experience they need and that you are confident you can fill those requirements.
• You need to be able to assure yourself that the board chemistry will work. You should ask to meet all the members of the board and the company secretary and ideally the non-executive director you are replacing. In particular the relationship between the Chair and the CEO is of vital importance in a well-run company.

The company will usually make a lot of information available, often there will be a pack of information available in paper or on the web to accompany the application form. There are also many sources of externally validated information such as the published annual reports and accounts for the last three years, press reports and possibly (depending on the size of the company) Rating Agency and Voting Services reports.

It is very easy to be flattered by an offer of a role, and it is difficult to say no but it is important that you do. If you are not completely happy that the company is one you can add value to, that you would enjoy contributing to and that it is a sound business, then walk away. A good reputation is one of the non-executive director’s most important assets. It takes time to build up but it can be destroyed almost immediately.