An increasing number of companies are looking to diversify their knowledge base by adding board members who are capable of delivering results in the heat of the modern corporate climate. The digital era is ushering in a new business landscape. Decision makers recognise they need to have a broad range of knowledge in their boardroom in order to stay in touch with the fast-paced changes of today’s industrial revolution. The solution for many companies is to hire Non-Executive Directors.
According to the FT, average fees for a Non-Executive Director have gone up 41 per cent over the last decade and are now at £67,655 a year, with FTSE 100 companies paying up to £100,000 per year. With so much earning potential at stake, it is no surprise that many elite professionals make the transition to a non-executive role in the latter stages of their career.
What is the Difference Between an Executive and a Non-Executive Director?
The role of a Non-Exec is quite different from the role of an Executive - although you will still have a major part to play in the decision-making process. An Executive is responsible for the day-to-day running of a company whereas a non-executive takes on a part-time role and is essentially responsible for providing expert knowledge and challenging other board members - albeit in a diplomatic manner.
Non-Executives are hired to provide objective criticism and constructively facilitate strategic decisions. The majority of your involvement during meetings will be asking questions and making suggestions that best serve the interests of the stakeholders.
Although you may only attend a board meeting one or two days a month, you will be expected to contribute to the overall performance of the business and will also have the same legal responsibilities as full-time executives on the board.
Am I Ready for a Non-Executive Director Role?
It is not unusual for Executive Directors to take up a role as a NED whilst still committed to their current company. However, before you accept a second string of responsibilities, you should consider that taking up a role as Non-Executive Director requires a significant commitment and the demands can be extensive. If you are already in a full-time role, you may not be ready to adopt a Non-Exec position just yet as the majority of Non-Executives make the leap following retirement.
However, that does not mean you shouldn’t start your investigations before you retire. It is advisable that you are ready for a non-executive role before you apply or accept an invitation for an interview. Start your preparation early to make sure you are ready to take on a role when the right opportunity presents itself. It could be worth networking with other professionals who have already made the move or engaging with specialist Non-Exec training and content.
Transitioning to a NED Role
Companies look for Non-Executive Directors that have a specific combination of knowledge and skills. Experts that have experience as an active board member are typically given preference, although exceptions are made for non-executives with specialist knowledge. Credibility is key.
The transition from an executive role to a non-executive role can take time to adjust - particularly if you do not have much experience as an executive. The most important skill to develop is the capacity to challenge strategies and present arguments without offending anybody. Before taking on the role as NED you may want to consider one-to-one coaching to ensure you meet expectations in the boardroom.
Why are Non-Exec Roles Right for Me?
In truth, only you can answer whether a Non-executive role is right for you. Former executives and people with specialist knowledge are best placed to take up a role as a NED. The role enables you to enhance your reputation and credibility, add more knowledge and skills to your business acumen, play a part in exciting new projects and earn a seven-figure salary from sharing your knowledge for just a few days each month.
There is also going to be an increase in demand for Non-Executive Directors following the release of the new Corporate Governance Code by the Financial Reporting Council (FRC). This new Code states that at least half the board of FTSE 350 companies must be made up of Non-Executive Directors, which means you will have more opportunities to choose from than ever before.
How Can I Start/Move Forward with My Non-Executive Portfolio Career?
In practice, the best way to progress your portfolio career is to expand your network and position yourself as an expert in your field. Use your network to put yourself on the radar. Publicise your plans and be vocal about your ambitions. It is often the case that opportunities will arise during conversations with somebody in your network.
To increase your chances, register with a company that has an extensive network and specialises in providing high-calibre individuals with openings to expand your career portfolio.
Sign up with Non-Executive Directors today and embark on a profitable and fulfilling career.