Blog Article

 Employee Benefits

Non-executive directorships: part 1 – gaining a foothold

October 30, 2016

colleagues shaking hands over table

How encouraging your senior staff into external NED roles can benefit your business

In this rapidly evolving world, more importance is being placed on a workforce who not only have a diverse range of skills – but are also empowered, and feel they have the potential to become leaders. This can make your workplace and business more agile and adaptable in these changing times, as well as help retain and nurture your most valuable employees.

But as an employer, what’s the solution if you want to develop staff, for example, by improving on the level of strategic thinking within your business – but you don’t have the relevant roles available? The answer could lie in non-executive director (NED) positions for other organisations.

Benefits for your business

A NED role could help your senior employees develop skills, and build their profile and credibility in other relevant lines of work. By offering expertise to another organisation, they are also potentially helping a local business and in turn the community. And for female employees, who are underrepresented in the boardroom, there is the opportunity for self-empowerment and to prepare for a director’s position. David Watt, executive director of the IoD in Scotland, observed that “there are many studies showing that boardroom diversity positively impacts on performance” – what better reason to develop a diverse group of individuals ready for your own boardroom?

Being a NED will also help your senior employees to appreciate the dynamics and tensions that exist between boards and executive teams: meaning that clients see them as someone who understands their strategic – not just operational – needs and can speak to all the key stakeholders.

The role of a NED

So what do NEDs do, exactly? Sitting on the board of many public, private as well as not-for-profit organisations, NEDs work by offering advice and strategic input to the executive team and keeping a close eye on the performance of the organisation.

How often they’re required, and what they do will vary depending on the organisation, but generally, ‘homework’, monthly meetings, ad-hoc meetings and the occasional public event will be expected. Some boards also offer training in the form of away-days, sometimes with overnight stays.

Gaining a foothold

Although being a NED can give employee credibility, and in turn help develop a skillset that offers benefits to you as an employer, it can be difficult for your employees to break into the non-executive world. Boards appointing new NEDs are often looking for those who already have experience of how a board operates, making it harder to get that first position. It’s the same ‘experience/opportunity Catch 22’ that graduates often face.

A solution for your employee could be to find a non-remunerated NED role, which are usually within public, not-for-profit or third sector organisations, for example charities or community groups. By making this move, they can gain a foothold in the non-executive market and prove they have the right skills. Then, once they have one board-level role on their CV, they will be able to apply for other non-executive opportunities.

Finding the right balance

A challenge that can affect you as an employer more directly is finding the right balance. Can you support your employee as they take time away from where you need them most? It might be worth it in the long run, but it can sometimes feel like a juggling act. At Standard Life, a volunteering policy allows employees to take three paid days leave a year to volunteer – these days can also be used for NED commitments.

It’s important to establish in advance with your employees how a balance of commitment can be achieved. Boards will have established and non-negotiable meeting dates, which NEDs will be expected to commit to – a challenge when a new project comes up that you want them to get involved in. However, if the right balance is achieved, the benefits for you as an employer can put your business on track for success.

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