The non-executive role on subsidiary boards
At NEDonBoard’s regular dedicated non-executive director events, discussions with members has, on numerous occasions, turned to the issues around boards fully understanding the role of NEDs and how to enable a functional board.
Needless to say, it can be highly unproductive to appoint NEDs to a board when some of the executive team, or even new NED themselves, don’t fully understand the role of the non-executive director and don’t know how to function collectively to achieve the best for the company.
It may be a simple point, but as with any team, understanding the role of each individual can help everyone to understand the viewpoint of where someone else is coming from.
Non-executives bring numerous benefits to a board, and going further than this, executives and non-executives need to know how to engage best together.
Bringing independent perspective and acting as a critical friend, NEDs can help prevent some of the large company scandals which have hit the news in recent years. They should ask key questions to ensure that they understand what is happening and why, as well as take this a step further in putting forward helpful solutions or suggestions, where appropriate. An important part of this process, and something which has appeared in NEDonBoard’s recent NED survey, is that where a NED does provide constructive challenge (remember this is why they are there – their experience and independent perspective should be useful), and acts as a critical friend, what they say should not be taken personally. Equally, a NED should have the communication skills to relay what they have to say in a constructive manner.
Often appointed for their business or specialist knowledge and skills, NEDs can also provide support and mentoring to a young executive team.
To develop further your knowledge and skills and qualify as a professional NED, please visit our training page and join NEDonBoard, the Institute of Board Members as a member.
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