Top tips to become a non-executive director
NEDonBoard defines the non-executive director as “a critical friend”. What does it mean? How do you become such a person? What are the skills that make a NED effective? How do you secure a NED role and how much do you earn as a NED? In this blog post, we answer the above questions and give you tips and recommendations reflective of our extensive experience in dealing with the non-executive director and board member community.
The top 5 skills of a good NED. Through its member surveys, interviews and panel discussions with experienced NEDs and boardroom experts, NEDonBoard determined that the following are the top 5 skills that NEDs must demonstrate to be effective and successful in the boardroom:
- Business acumen: ability to make good judgement and quick decisions in understanding and dealing with a business situation
- Governance knowledge: sound understanding of governance, legal and regulatory frameworks, responsibilities and liabilities of directors
- Financial astuteness: numeracy skills to understand debt and finance issues
- Emotional intelligence: capacity to be aware of, control, and express one’s emotions, and to handle interpersonal relationships judiciously and empathetically
- Integrity: strong principles, independence and high ethical standards
NEDs can be trained to enhance their skillset. The NEDonBoard training programme has been designed by experienced NEDs and boardroom experts and reflect the latest thinking.
Appointments not only reflect the above skills. NEDs are appointed as they meet the specific needs identified by the Board of Directors, the Chairperson or the Nomination Committee. For example, technical expertise may be sought to deal with an emerging risk. Being known to your network and to the NEDonBoard community for a specific expertise is valuable.
How much do you earn as a NED? The simple answer is that it varies and typically reflect the type of companies on which NEDs serve. KPMG published its Guide to directors’ remuneration 2017. FTSE250 NED are remunerated in the £48-60k range, while FSE100 NEDs are remunerated in the £61-79k. The pay packages at smaller companies tend to be lower.
At NEDonBoard, we consider that the remuneration package for NED is not reflective of the duties and liabilities to which NED are exposed as company directors. In addition, the role may be more time consuming than anticipated when the NED accepts the appointment.
Financial considerations have to be thought through prior to accepting an appointment. Most NEDs earn less than senior executives.
Related post: Non-executive director salary: a guide to NED pay
Gain experience. There are a few avenues to explore for NEDs to gain experience. NEDonBoard recommends the following proven strategies to gain experience and have an edge in the interview process.
- Take a role in the non-profit sector. Roles in the non-profit sector are typically unpaid but will provide you with valuable experience and demonstrate your commitment to becoming a NED.
- Find a mentor. Your mentor should be an experienced NED that will help you navigate the various stages of the NED journey.
- Hear from board experts to improve your knowledge. NEDonBoard hosts board best practice and keynote speaker evening events. Check out our upcoming events here.
- Associate yourself with the Professional Body. Become a member today and join our community of experienced NEDs.
Your next steps to secure your first role. NEDonBoard considers that there are important steps to go through for transitioning NEDs:
- Be clear on your motivation to become a NED.
- Watch our webinar How to secure your first NED role. Available on-demand.
- Consider your professional networks and the value of joining a NED network such as NEDonBoard. Members have reported that their membership with NEDonBoard, the Institute of Board Members has supported their application, demonstrating their commitment to being effective NEDs.
- Prepare for the role. NEDonBoard offers dedicated courses for transitioning NEDs. We invite your to visit the NED Accelerator Programme webpage.
- Build your network and surround yourself with those operating at board level.
“A good cover letter in my opinion! I think you have a really interesting profile and also the fact that you have done the NEDonBoard Accelerator is of real interest. I would love for you to apply for on of the NED roles we have open”
E-mail of a recruiter to one of our NED Accelerator graduates
Written by Elise Perraud
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