Today's top companies have to find solutions to navigate a fast-paced business climate. Subsequently, the past few years have seen an influx of boards taking on new members that have knowledge in specialised areas to help them steer the ship through previously unchartered territories.
UK businesses are looking for expertise. Furthermore, boards are not necessarily seeking Non-Executive Directors that have previous boardroom or top management experience. Modern companies need individuals with relevant commercial and technical knowledge.
The growing importance of digital technology in business settings together with economic pressures plus demands for responsible governance is creating empty chairs around the boardroom table.
Reports indicate that modern companies need more diversity in backgrounds, skills and experience. Non-Executive Directors that can bring a wider perspective and insightful knowledge enhance the effectiveness of company boards.
Furthermore, in an era where investors are quick to lose confidence, board diversity sends a positive signal that leaders can cope with fast-changing landscapes. Forward-thinking executives that recognise fostering a broader range of knowledge, skills and experience understand the importance of expanding the talent pool.
Subsequently, executives are prepared to look beyond the so-called “marzipan” layer of corporate management structures just below board level. Candidates with specialist knowledge and experience with unlisted companies, private equity firms, business services, and consultant roles could find opportunities on boards as a Non-Executive Director.
Digital Non-Executive Directors
Company directors know the future rests with digital technology. Senior board members also recognise the importance of developing a digital aspect of their company but lack the knowledge and understanding of how virtual world concepts impact real-world behaviours.
Three years ago The Financial Times reported a mere one percent of FTSE 100 companies across Europe have board members in place that could help them navigate the digital revolution. Premier companies need at least two Non-Executive Directors that have significant digital experience.
Knowledge of the digital space is increasingly critical for leading businesses. There is a shortage of board members with an understanding of specialist areas such as mobile, big data, web security, privacy and fintech.
Information travels incredibly fast in the digital arena. Organisations need board members that understand how their brand is perceived and shaped in the online space, and how to control crisis situations on social media or at least, know how to find this critical information.
The globalisation of industry is also causing executive board members to consider how they structure the knowledge base in key areas. Non-Executive Directors tend to be natives rather than foreign nationals. However, international companies are starting to see the relevance a diverse board of internationals can help them to remain competitive on a global scale.
As a consequence, opportunities for foreign Non-Executive Directors are rising on UK-based boards. Similarly, companies stationed overseas want the expertise of non-executives educated and trained in Britain.
Why top companies need NEDs?
Leaders of top companies are not only looking for Non-Executive Directors with a strong digital acumen. The pressures emerging from multiple sources are putting demands on boards that do not have the talent base to handle modern problems.
Investors are looking for leadership teams that can demonstrate a risk awareness of future profits in the midst of a paradigm shift from conventional to digital trading. Modern business environments not only involve knowledge of digital technologies, but also legal, financial, communication and sustainability issues that are synonymous with digital environments.
Trading and communications are a continuous cycle. New technologies create market fluctuations and consumer behaviours. Most large businesses are not prepared for trends. Furthermore, political developments present complications that have the potential to deconstruct business models.
Non-Executive Directors with backgrounds in corporate governance and financial experience have always been valued in the boardroom. Specialists with technical skills are now seen as valuable to executive boards too. Standard business practices are stepping beyond the boundaries of moral, social and legal commitments.
In today’s corporate climate Non-Executives have to be engaged, numerate and technically competent. Specialist knowledge is definitely favourable, but a broad skill set presents talented individuals with opportunities to secure a role as a non-executive board member.
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