04/09/2023

The Power of Non-Executive Directors to Challenge and Support C-Suite Leaders

The Power of Non-Executive Directors to Challenge and Support C-Suite Leaders

The board exists to guide an organisation, each member acting as an expert in their field, an exceptional leader and savvy decision maker. It’s their task to navigate the market and implement a strategy for growth. But who is there to guide members of the board?

Enter the Non-Executive Director…

 

Enter the Non-Executive Director

 

An NED is a director who is not required for day-to-day business – in fact, they may only consult with the board a handful of days a year – leaving them free to work entirely at a strategic level. NEDs can apply all of their professional experience and their external viewpoint to see how decisions will affect various stakeholders. They are there to ask the difficult questions, contesting the CEO’s personal biases and preferences to ensure that your strategy is truly in line with your objectives at all times.

An Independent NED goes even further, having no financial ties to the business (such as holding shares) or personal ties to the management team. An iNED can offer purely objective advice to ensure the business is run responsibly and ethically, as well as strategically.

 

Why Companies Seek Non-Executive Directors

A Fresh Pair of Eyes: NEDs bring a fresh perspective to the table. As someone who isn’t embroiled in the day-to-day running of the company, their external viewpoint can spot potential opportunities and pitfalls that might have been missed otherwise.

A Skilled Consultant: NEDs often come armed with specialised skills and industry know-how. Their insights can be a source of wisdom for the C-suite, offering guidance on delicate matters and lending their acumen to strategic discussions.

A Networker: As the old adage goes, sometimes it’s not what you know, it’s who you know. A robust network can be a game-changer and NEDs, with their extensive connections, can open doors to all sorts of collaborations, partnerships, and opportunities.

 

Non-Executive Directors can be excellent Networkers

 

An Accountability Reminder: It’s easy for directors to get caught up in the whirlwind of daily operations. NEDs act as a steadfast reminder of accountability, ensuring that strategic goals and ethical standards are upheld at all times.

A Diverse Perspective: The need for diversity is becoming more and more apparent. The C-suite should represent a variety of backgrounds and experiences so as to better understand their audience and their own team. If a board is lacking diversity, NEDs can be recruited to expand the collective experience and enrich decision-making processes.

A Legal Requisite: Public sector businesses may be government mandated to have an NED on their board, ensuring that all business activities are conducted responsibly.

 

Recruiting an NED

As our managing director, Lee Bhandal, told Insider Magazine, “The NED recruitment process isn’t much different from any other executive search. There aren’t hundreds of relevant NEDs sat on recruitment databases. We need to go and find them proactively; quite often to very specific and demanding client briefs.”

 

Creating a Comprehensive Candidate Brief for a Non-Executive Director: Business goals and objectives, Required experience, Skills and expertise, Cultural Alignment

 

This proactive quest begins with a comprehensive search process. Our partners and in-house researchers delve deep into the reasons why a business is seeking a non-executive director, establishing a detailed brief of the required experience, sector expertise, and cultural alignment.

With this understanding to form our blueprint, we undertake a full market mapping process, coupled with a review of our existing networks, in order to identify a list of suitable NEDs to headhunt.

 

What to Seek in a Good NED

Of course, the answer to this question depends entirely on the company and their reasons for wanting an NED. However, certain qualities are always useful to look for.

A robust track record within the relevant industry will provide a solid foundation. NEDs who have already navigated similar challenges will bring valuable insights to the table, not to mention any relevant connections or an established reputation within their field.

Beyond this, NEDs should have a strong strategic vision that extends beyond immediate concerns. Remember, a key benefit to recruiting an NED is the outside perspective they can offer. NEDs can hold the company’s long-term objectives in mind at all times and tailor their advice around this.

Adaptability and curiosity are also vital traits in today’s rapidly changing business landscape. NEDS must be able to stay informed on current events in order to remain responsive and to identify possible opportunities.

Finally, NEDs must be confident in their recommendations so that they can say what needs to be said, even to an audience that doesn’t want to hear it. NEDs will challenge the CEO unlike any other director, as is their prerogative.

In the complex world of business leadership, Non-Executive Directors emerge as a stable, guiding light – to support leaders through difficult decisions, and to challenge them to do better.

 

As all board members know, making non-executive appointments can be a challenge: a challenge involving a number of important components- appropriate skills, a proper understanding of board governance, a balanced perspective on risk and innovation, appropriate fit for the existing board along with diversity of thought which can enrich the board and its decision making. We approached Lee Bhandal with this complex list of requirements: he listened and took time to understand our brief, showed genuine commitment to The Beverley Building Society and to our values. We found Lee’s approach refreshing and pragmatic and responsive: he provided us with a very high calibre of shortlisted candidates and ultimately with an excellent appointment. Thank you.
– Sue Symington, Beverley Building Society

 

If you’d like to discuss your NED requirements, we’d love to hear from you. Contact our managing director, Lee Bhandal, on l.bhandal@parkinsonlee.com to arrange a chat.

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