How to become a non-executive director (with skills)
Updated 24 October 2022
Non-executive directors advise and support organisations. They're chosen to diplomatically challenge ideas and extract the best management outcomes. The job is complex and requires you to have specific knowledge and skills, such as confidence, analytical skills and the ability to look at things from an objective point of view. In this article, we explain what a non-executive director is, how to become a non-executive director, the primary duties of this role and the skills required for it.
What is a non-executive director?
A non-executive director is a member of the board of directors within an organisation. Since these board members don't work directly for the organisation, they're not involved in day-to-day operations. Instead, most non-executive directors participate in policy- and plan-making processes as independent advisors. They're typically responsible for overseeing executive directors and representing the interests of stakeholders. Non-executive directors are thought to understand the organisation's interests more objectively than executive directors, who may have a conflict of interest between shareholders and management or other stakeholders. Non-executive directors don't hold C-level or managerial positions.
How to become a non-executive director
If you're interested in how to become a non-executive director, here are some steps you may take:
1. Prepare for the role
Be specific about the kind of organisation you want to work with. Since non-executive directors are primarily concerned with governance, public liability positions are usually the closest example of a 'standard' role in this field. Alternatively, a non-executive director in a smaller organisation might be more involved in operational matters. If you enjoy this, it might be wise to concentrate your efforts on this kind of organisation.
A non-executive director demonstrates an awareness of business finances and legal issues to oversee an organisation effectively. Normally, this results from your executive profession, but to be sure you have the skills necessary to analyse an organisation's financial and legal procedures, consider enrolling in a personal development programme.
2. Update your CV
As with any other job search, evaluate your career to date and check that your CV accurately captures your experience before applying for a non-executive director position. Remember that this position places a strong focus on personality and talent, not just your professional accomplishments. It's recommended that your CV demonstrates your mental independence and willingness to make judgements.
3. Get the right experience
The market for non-executive directors is quite competitive. It might be particularly challenging to land your first non-executive director role, but there are several preparatory steps you can take to increase your chances:
Consider accepting a non-executive director position at a non-profit or charitable organisation. You may gain useful experience from this while proving your commitment.
Try to locate a mentor who currently serves on a board. Ask them to provide you with insights into how the board functions, suggestions for your campaign, access to director networks and personal recommendations.
Become a school governor. The obligations and responsibilities of a school governor are almost identical to those of a non-executive director. You become a more well-rounded candidate as a non-executive director when you combine your commercial skills with the ability to offer an objective viewpoint in operating a school.
4. Prepare for the interview
It's critical to distinguish between promoting yourself as an executive and a non-executive director during your interview. Although you may discuss any relevant executive management experience career during your interview, try to focus on the knowledge you've obtained, the lessons you've learnt and how you might apply these to the organisation. In general, when interviewing for a non-executive director position at a big firm, emphasise your independence and ability to challenge things positively. In a smaller organisation, the managing director may seek a decision-making partner with experience and empathy.
Not every organisation looking to hire a non-executive director has a functioning board or even a chairperson. In certain cases, forming a suitable board begins with the appointment of a non-executive director. This is especially true in the small and medium-sized enterprise (SME) sector, where a founder-managing director eventually realises they may no longer operate in a vacuum in terms of making strategic decisions. The recruitment procedure for such an organisation may not adhere to the traditional format. Instead, the business owner may use formal and informal discussions to determine whether or not to work with you.
Primary responsibilities of a non-executive director
Non-executive directors spend most of their time monitoring the business, attending board meetings or overseeing the management team. By offering a comprehensive view of the organisation's problems and defending the interests of shareholders, they bring value to the smooth continuation of operations. Their responsibilities include:
Non-executive directors assess how well the management team has performed in terms of achieving goals and objectives. Additionally, they oversee the board's executive members, have the power to fire senior management and organise subsequent appointments. The directors also supervise the organisation's performance reports and ensure they meet any obligations towards the stakeholders.
Creating frameworks and procedures for identifying and managing risks is a job shared by non-executive directors and executive partners. They reassure senior managers that the financial information is correct and that the systems for financial controls and risk management are strong and secure. They also guarantee the implementation of internal control frameworks covering all aspects of the organisation and make sure that adequate risk management strategies are in place.
A non-executive director invests a significant amount of time in managing the organisation. As a result, the director informs the board of any additional significant time commitments when they're recruited. If their timetable undergoes any significant modifications, they're required to contact the board immediately. Before taking on any new obligations that might impact the chairperson's job, they get the chairperson's approval. It's necessary for a non-executive director to take time out of their schedule to fulfil the obligations stated in the appointment letter.
Non-executive directors objectively examine the proposals developed by the executive team. They offer constructive feedback and a more comprehensive understanding of the organisation's external issues, which helps to develop and direct the corporate strategy. They challenge the current ideas and offer an outside viewpoint, which enhances business tactics. Along with the executive partners, non-executive directors establish the organisation's principles and standards.
Participation in committee meetings
A non-executive director may attend committee meetings in person and perform their committee member responsibilities. They're informed of the committee's goals and any additional duties that may exist. The non-executive director may represent the firm externally and assist the board in keeping stakeholders, customers, shareholders and third parties appropriately informed, thereby expanding their professional networks.
Skills required to be a non-executive director
The skills a non-executive director may need in their role include:
It's helpful to have the ability to evaluate goals, comprehend workplace environments and provide creative solutions that improve operations over the long term. A big part of this is making clear and practical goals, working out how realistic they are and how long it might take to reach them while thinking about the possible outcomes, setbacks and opportunities that may occur.
A non-executive director frequently has control over internal audits and performance measurements. As a result, they have a high standard of diligence in carrying out their responsibilities and keeping up with industry standards. Successful non-executive directors show a thorough understanding of compliance and regulation, personal integrity and attention to detail.
An outside viewpoint is amongst the most helpful things a non-executive director may provide. This helps to work out future corporate objectives and advancements. A non-executive director maintains objectivity and handles problems at a distance from the organisation.
Using creativity means finding new ways to solve problems or looking at them differently. In a dynamic corporate world, agility and innovation are essential talents. Non-executive directors may develop unique insights and ways of thinking through creative thinking, which helps an organisation become future-ready.
For accurate future planning, it's often helpful to stay familiar with disruptive technologies and other advances in business and the broader industry. A non-executive director is able to participate in discussions with a solid understanding of the difficulties their organisation may face in the near future. To accomplish this, they typically require constant research skills and active networking abilities.
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