What Could A NED Do For My Business?
Ever wondered what a non-executive director (NED) is supposed to do and how they benefit the businesses with whom they work?
Here are some of the ways:
- Experience – NEDs are usually a little older and have had extensive business experience, so chances are that they have seen the challenges your business is facing before. They can bring that experience to bear by flagging up potential dangers and help you plan to avoid them.
- Perspective – a bigger perspective, because they are working with and meeting other businesses all of the time an NED is taking into account lots of external factors, which help to provide a broader, more objective perspective.
- Connections – NEDs usually have a very extensive network and will allow you to tap into it.
- Keep things on track – a NED will hold you to account for the commitments you make, thus ensuring that the business is moving forward and not stalling.
- Business Strategy – a NED can help you to develop your strategy and direction
- The Bigger Picture – being outside the day-to-day politics the NED can offer an unbiased and objective view, even acting as the voice of reason or a referee where board disputes arise. They can also ask the questions that others closer to the sharp end cannot.
- Banks like the involvement of an outsider to the business – this improves your chances of securing funding should the need arise. Your NED might also be able to put you in contact with other sources of finance.
- Skills – they could provide specific skills currently missing in your business, e.g. Finance, Marketing, Team Development.
- Fewer emotions – particularly pertinent to family businesses, but not exclusively so, an outsider will have a regulating effect on behaviour, making team members more reasoned.
- Remuneration – can act as advisor in the case of remuneration disputes.
- Isolation – finally, for many business leaders the top can be a very lonely place, having someone trusted with whom they can discuss their hopes and fears can be a powerful stress release and enabler.
How NEDs Work: Non-executive directors work on a retained basis, (with legal obligations), they usually spend from one half day to two or more days per month in the business, dependent on what the organisation needs at any one time. As a minimum they will want to review monthly performance with you.
So now you know what a non-executive director can do for your business why not
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