The non-executive role on subsidiary boards
What is expected of non-executive directors?
A non-executive director (NED) plays an important part in many organisations. Because non-executive directors aren’t actually employees of a company, they have a unique role that’s slightly different than a traditional executive who is part of the management team.
Whether you’re thinking about becoming a non-executive director or already have experience in this position, it’s helpful to know precisely what a company wants from you. While there can be some differences from company to company, here are some overarching qualities of a non-executive director that are desired across the board.
Independent Nature
A non-executive director could be considered as an outsider from other members of management. As a result, they need to be able to think for themselves and stick to their guns, regardless of the situation. A non-executive director needs to consistently make the right decisions and use independent judgment when determining the best plan of action for a company. Otherwise, if a NED is unable to think independently, it could have adverse consequences on an organisation.
Strategic Thinking
A big part of being successful in business is seeing the big picture and implementing sound strategies. Consequently, it’s ideal for a non-executive director to be analytical and able to plot a long-term strategy that steers a business in the right direction. NEDs should have a knack for taking a wealth of data and putting it all together to make sound decisions.
Communication Skills
For a company to thrive, it’s necessary for a non-executive director to exchange ideas with other members of management and be able to clearly express their thoughts. They should be able to critique any problem areas in a diplomatic way. It’s also helpful if a NED has existing connections with other key people and businesses, so they can network and bring about new opportunities.
Ability to Remain Unbiased
Because a non-executive director is an outsider, they are expected to maintain a sense of neutrality and offer a clear perspective that the normal members of management may lack. That’s why it’s critical that NEDs stay unbiased at all times and make sure that their decisions are based on objectivity. When looking for a non-executive director, most companies will want a person who can remain focused and do what’s best for the organisation regardless of their personal views. Can you think of any other qualities of a non-executive director that prospective NEDs should possess?
Related post: How to become an effective NED?
About NEDonBoard: We are the UK institute of board members and the professional body for non-executive directors and board members.
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