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The role of the Non-Executive Director (NED) can be both challenging and rewarding, but it is important to know what you are getting into. It is quite a step change from an employment role because you are only in the business part-time and it can be difficult to feel an integral part of the day-to-day activities of an organisation. However, the role itself is critical to a well-run company and boards are waking-up to the need to find the next generation NEDs.
NEDs are appointed based on their knowledge and experience – they should bring to the board a range of different perspectives and provide an independent, broader view drawing on their previous roles and responsibilities. The ability to compare and benchmark the organisation’s approach to certain situations can act as a positive challenge to executive management’s thinking.
Tips for preparing for a NED role
“Boards’ need more diversity of thought” … “Boards’ need people who understand business” … “Boards’ need people who positively challenge the status quo” …
Chartered accountants can respond positively to the statements above and have a head start on a number of other professionals given finance and risk are a key element of the NED role. The skills and attributes of a chartered accountant align well with the requirements of being a NED (strategy-led; financially literate; enquiring mind; communicator; listener). Chartered accountants should be stepping up to the plate to perform NED roles, especially with the input they can provide to audit, risk and remuneration committees.
To help you chart a course there are 6 simple tips to consider on the road to becoming a NED.
Start early, set your objectives and make a plan – What are your strengths and weaknesses? Plug any gaps with extra training or education, especially the new Board Development courses run by the ICAEW Academy (see below).
Start with small steps – There are a range of NED-related roles in a variety of organisations such as schools, charities and sports bodies – what are your interests? – where can you gain some useful initial experience in a non-threatening environment.
Rewrite your CV – Look at your CV in the light of taking on a board-level role. You will need to revamp and re-shape the document to sell your ‘value’ – it will be a very different CV to a traditional employment model. This may link to point 1 above regarding highlighting any gaps and development areas.
Get your current employer to sponsor you – Look to get on the ladder early and ask your employer to support you – it will help your development and bring new ideas back into the organisation. A number of organisations are building this into their talent Programmes.
Raise your level of networking - NEDs must ‘network, network and network’. The trick to finding out about the right opportunities – and which ones are realistic – is to adopt a methodical approach targeting who can help you. Think about who you can approach to ask for help, especially reactivating past contacts and thinking more broadly about new ones.
Find a mentor – Talk to a NED in your organisation, they might be able to help or talk to a membership body such as the Non-Executive Directors’ Association (‘NEDA’) to get some advice and find the right person for you.
Boardroom diversity continues to be a hot topic, especially from an age, experience and new skills perspective. Younger executives in particular should be given the opportunity to take on external NED roles at an earlier stage and chartered accountants are well qualified to do this. ICAEW has a comprehensive selection of board readiness and corporate governance CPD training, most of which is run in partnership with NEDA. Further details can be found here: A practical training and certification programme - designed to provide current and aspiring NEDs with the knowledge and understanding to carry out their roles effectively.
Louis Cooper is the CEO of the Non-Executive Directors’ Association, a freelance Governance and Risk Consultant and a member of the Institute of Chartered Accountants in England & Wales. For more information on being a NED visit nedaglobal.com