NON-EXECUTIVE DIRECTORS - WHY AND WHEN?
You’re an Entrepreneur who knows your business better than anyone; you understand your market, your customer and your business potential.
You’re working harder than ever, managing ever changing scenarios, and often covering sales, contract negotiations, marketing, IT and HR to get everything done. It seems the more successful you are, the more there is to do. Sound familiar?
So, when do you get time to step back and assess your goals and see the wider picture? Who gives you a different perspective, helps you test your growth plans, challenges your assumptions and acts as your critical friend? Who brings you experience, helps you avoid the pitfalls and mentors you, whilst crucially leaving you in control?
Put simply, it is never too early to recruit a Non-Executive Director as they can be the catalyst you need to successfully scale-up.
For a business to be ready to scale-up, it needs to be well managed, have accurate financial information and cashflow projections and crucially time to plan the next stage of growth. It also needs an appropriate business structure that will allow it to find the solutions to its challenges from within, whether those challenges relate to marketing and growth strategy, people and financial resource, or simply time management.
This may all sound logical, but some businesses may not have the skills or experience to put this in to practice. This is where a Non-Executive Director can add value and act as a sounding board for you and your management team.
They will use their experience to give guidance and advice, rather than to interfere with the day to day running of the business.
Their role is to widen your network by making key introductions, provide strategic advice around any sector legislation, regulation and corporate governance and crucially to act as an ambassador for your business.
Adding real value
As we have established, Non-Executive Directors are usually appointed for the experience that they bring, their position in the business community and their network within the sector.
Therefore, when recruiting, you should be realistic about what you require from your Non-Executive Director both in terms of the time commitment and the parameters of the role; this will ensure they good fit for your business and are clear about the role you want them to play.
In terms of NED role, what do you want;
The development of the business plan? Making introductions and connections to grow the business? Specific marketing skills and product knowledge? Access to funders? Assistance in managing risk and governance? All the above and more…. Without answering these questions, your Non-Executive Director will not be able to add value or help your business grow.
Given the potentially wide-ranging nature of a Non-Executive Director’s remit, matching your business with the right individual is a complex task.
It involves a thorough assessment of their soft skills to ensure their style and approach to questioning, challenging and ultimately supporting you, will add value and foster trust and honesty from all parties.
What should you expect from your NED?
A Non-Executive director should take their responsibilities seriously and be ready to challenge you and the management team constructively.
Therefore, you should expect them to want to understand your business and business model and the environment it operates in. Given this, you should expect them to ask questions of you and your team to understand how adaptable you are to potential changes if suggested.
You should expect your Non-Executive Director to give sufficient time to the role and be prepared to act when required to do so.
Above all, you should expect your Non-Executive Director to help formulate the strategy and the future direction of your Company.
In return for your flexible thinking, they will offer ideas, be adaptable to change and most importantly remain independent, whilst listening and challenging appropriately, before then supporting the consensus decision.
Make your business attractive
Remember, Non-Executive Directors work with businesses that inspire them, that they feel can add value to, and those businesses which they believe in.
They will expect your business to sell itself, to demonstrate scale-ability, to have a proven concept (ideally with a good business plan in place) and for you as the leader of the business to know your market and above all be passionate about what you do.
Getting it right
Running a successful and scalable business requires a mix of different skills and experience, and a Non-Executive Director can help provide those without interfering with your day to day running of the business.
It is an important hire and one that Moon Consulting as experts in this area can support you with. For more information on our network of Non-Executive Directors and how we can manage your appointment, please contact us on email@example.com