What are the benefits of becoming a NED?
Non-executive directors sit on the board of a diverse range of public, private and not-for-profit organisations across the globe, working as a ‘critical friend’ to provide expert guidance to the executive leadership team. Rather than the day-to-day tasks of running a business, the NED is concerned with the bigger picture; their goal is to steer the company towards success from afar through strategic advice and constructive contribution.
Naturally, a new NED will require the appropriate training in order to fully grasp what’s expected of them in their new role; they will need to understand their obligation of independence and learn to rely on their own research to keep up to date with current affairs, market trends and corporate governance. Transitioning from an executive role to board directorship is a significant change of pace – if successful, it can prove a fulfilling and worthwhile career move.
If you’re considering becoming a NED, it’s likely you’re weighing up the advantages and potential challenges that come with the role. The good news? Alongside the risks and newfound responsibilities of a non-executive director come a whole host of benefits, including:
Boosting your credibility and reputation
The last decade has seen significant growth in ‘portfolio careers’ – a livelihood made from multiple jobs taken on a part-time or consulting basis. Those balancing such careers cite variety and a welcome boost to their professional reputation as a result of taking on several challenges at once.
For experienced executives, becoming a non-executive director offers the opportunity to showcase your capabilities across a range of areas and make a name for yourself as an invaluable addition to a business. Beyond the increased sense of financial security gained through this extra source of income, NEDs can cultivate credibility and become known in the industry for their contributions to growing companies.
The more expertise you gain through this position, the more you will find others seeking you out to ask your advice and opinion. What’s more, as well as the opportunity to use your specialist knowledge to help grow a business, becoming a NED can further allow you to expand your own knowledge and strengthen your commercial acumen.
Gaining freedom and flexibility
Considering the part-time nature of non-exec roles, NEDs have greater control over their work/life balance; their schedule is not explicitly tied to that of the company as it is for their executive counterparts so they have more time to pursue interests. Since NEDs are typically only expected at board meetings and public functions, this makes their role particularly appealing to executives seeking to build more flexibility into their career. With more time on their hands, professionals who hold this position add experience to their portfolio by taking the opportunity to make vital connections through networking.
Giving back to the business community
For many senior executives, becoming a non-executive director makes for a comfortable transition to retirement: while still balancing several risks, board directorship is still a step away from the stress of a full-time executive role; it is an excellent avenue for professionals at this level to gain an extra source of income and impart the wisdom they have accumulated to growing companies in the later years of their career.
Many experienced executives find that moving to a non-exec role allows them to ‘give back’ to other businesses by drawing on their experience to deliver impactful advice. In turn, NEDs gain a sense of personal satisfaction by adding value to an organisation and watching it flourish from the support.
Seeing the other side of the coin
Working board-level as a non-exec provides a unique opportunity for executives to see the business through a fresh pair of eyes. While you’ll likely be all too familiar with operations from the perspective of senior management, the role of a NED can offer a well-rounded, objective view of the business; one that enables you to gain valuable insight into the role of the director and the kind of pressures they face. This kind of knowledge can only aid in strengthening your relationship with the managing director and in turn, bolstering the performance of the team as a whole.