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The number of Non-Executive Director positions has grown significantly in the private, public and non-profit sectors over the past few years. With the rise in non-executive opportunities, it is important to understand the role of the Non-Executive Director, how it differs to that of the Executive Director, and what the requirements are for the position.

What is a Non-Executive Director?

The Non-Executive Director is a member of the board of directors of a company or organisation, who is separate from the executive management team. Sometimes referred to as an External Director, the Non-Executive Director is not typically involved with operations, but focused on policy-making, monitoring and advising.

Although they are not an employee, it is important to note that there is no legal distinction between Non-Executive and Executive Directors. The Companies Act 2006 defines a director as any person occupying the position of director, no matter how the role is referred to. Therefore, Non-Executive Directors have the same legal duties, responsibilities and potential liabilities as their executive counterparts. They have a fiduciary duty to a given company or organisation, and must act within the company’s best interests.

What are the Requirements of a Non-Executive Director?

The Non-Executive Director brings a wealth of knowledge and experience from an accomplished career - typically transitioning from an executive career themselves - to provide independent oversight and constructive challenge. They need to be flexible, accountable and innovative to support and challenge boardroom thinking.

Non-Executive Directors are selected because of their calibre, personal qualities that mirror the organisational culture and business needs, and ability to independently critique and advise.

Developing a Non-Executive Portfolio Career

It is common for Non-Executive Directors to hold various positions, with many reporting that once the first role is secured, it is much easier to secure additional positions.

Building a Non-Executive career can provide a reliable and varied income stream. Working across a portfolio career, the Non-Executive role not only creates new channels of personal revenue, but gives you the opportunity to test and learn new skills and behaviours, whilst making valuable contributions across different industries. It may also provide flexibility and greater control in managing the work-life balance. For non-remunerated positions, such as those in non-profit organisations, the ability to utilise years of knowledge and business experience towards a worthwhile cause can be an additional pluspoint in developing a Non-Executive portfolio career.