Blog Article

 Employee Benefits

Non-executive directorships: part 2 – our top 10 guide

December 2, 2016

Workers chat about a non-executive directorship opportunity

Guiding an employee into their non-executive directorship (NED) role.

Non-executive directorship (NED) positions are a great solution if you want to develop strategic expertise but don’t have the relevant roles. These types of external role could help your senior employees gain a more diverse skillset, get involved in the local business community – and for female employees, who are underrepresented in the boardroom, there is the opportunity to prepare for a director’s position.

But how can you guide them into finding the right position – and making it work for them? Follow our 10 step how-to guide.

  1. Without boardroom experience, it can be difficult for employees to break into the non-executive directorship world. A good start could be sitting on strategic partnership teams to gain experience of what it’s like to offer strategic input. Or suggest your employee looks for a non-remunerated NED role, which will often be for a public, not-for-profit or third sector organisation.
  2. Encourage your employee to think carefully about taking on a NED role. Before they even start looking, make sure they have discussed with you, or their line manager, whether this move is right for their development goals.
  3. Suggest a pro bono opportunity. These roles can help employees to develop their wider experience prior to securing a more formal non-executive position. They tend to have less legal responsibility and can be an excellent opportunity to gain insight and experience into an NED role, without the risk.
  4. Support the process of choosing the right organisation. It’s vital for both you and your senior employee to consider the development they’d like to achieve through their NED role, the type and level of contribution, and what kind of organisation appeals. Discuss any potential conflicts of interest and encourage your employee to find out how effective the board is and meet key people in the organisation.
  5. Help your employee define their offering. It’s natural to think about their specialism but encourage them to consider other general business skills and personal attributes.
  6. As an employee, the time commitment involved in a NED role is particularly crucial. Discuss this with your employee and consider what they – and you – should be prepared to commit to. It’s important that they’re sure they can balance the role with the one they carry out for your business. The location and logistics of the other organisation is a factor in this too.
  7. Think about any legal responsibilities that apply to the role. Ensure your employee is confident that holding these responsibilities is right for them. Understand whether these are collective or individual accountabilities and suggest that they ask to see a draft letter of appointment to clarify their obligations.
  8. Make sure your employee establishes what regulatory approvals are required. This will depend on the type of organisation the NED role is for, and the regulation that governs appointments.
  9. Find out if your employee will be supported. This will make things easier for both you and them. Ask what induction the organisation will give them and what on-going development and evaluation there will be.
  10. Help your employee to make the most of their NED role. This means getting up to speed quickly on the organisation and preparing effectively for meetings. Suggest that early on – ideally within the first few weeks – they will need to clarify: the expectations of the chair and the executive team, the financials of the organisation, the structure of the board and how it is perceived within the organisation, lines of responsibility and liaison, company structure and reporting lines, key internal customers and external suppliers; and the board and their own performance expectations and measures.

Follow these steps to help ensure the right balance is achieved and that your senior employee gets the most for their NED role. The benefits for you as an employer can put your business on track for success – read more about them here.

In my final article on NEDs, I’ll be meeting one of my Standard Life colleagues who has been successful in becoming an NED and is happy to share her experiences.

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