Build Your Business: How Can Non-Executive Directors Can Help
By Guy Rigby
Many growth businesses suffer from a lack of experience, knowledge or expertise and regularly find themselves "reinventing the wheel". They do not realise how the involvement of an experienced non-executive can help them achieve their aims.
What is a non-executive director?
A non-executive director (NED, also NXD) is an individual who will work part-time for your business, bringing knowledge and experience to your board and executive team. NEDs will often have a number of directorships, dividing their time between different businesses, and will typically have enjoyed a successful business career
Why would you consider appointing a non-executive director?
NEDs can bring significant benefits to companies of all sizes, including one or more of the following:
• Grey hair - many NEDs have either seen or dealt with the problem before
...An objective perspective on your business, seeing opportunities that you may otherwise overlook
• Help in fast tracking the growth of your business
• Expert insight and knowledge of your business sector
• Contacts and relationships with potential customers and suppliers
• Business intelligence and knowledge of your competitors
• Valuable input into strategy
• Financial expertise to help you raise development capital, sell or float your business
• Risk management skills to help you stay in business and avoid costly, or even fatal, mistakes
• Good judgement and people skills, adding value to your senior recruitment strategy
• Strong relationships with professional advisers, matching relevant skills to your particular business needs
What's the potential downside?
• In smaller companies, management may question the worth of the role of the NED. Be sure to clarify the specific reasons for the NED appointment at the outset
• NEDs who are brought in without a specific role may not deliver value for money
• NEDs with strong views or relevant experience may be tempted to interfere where they are not needed
NEDs will need to be paid for their involvement. As directors, they will give their time and are just as responsible for the conduct of the business as the executive directors.
This document is part of the Entrepreneurs' Toolkit series, produced by Smith & Williamson. More information on this and other toolkit topics is available at www.smith.williamson.co.uk/entrepreneurs
Guy Rigby is a Director and Head of Entrepreneurs at Smith & Williamson. For further information, contact him on 020 7131 8213 - email@example.com