Becoming a NED: how to land a non-executive role
A recent webinar, hosted by Jes Ladva, Partner and Annaliese Rogers, Principal, Odgers Interim supported by Susanne Thorning-Lund, Board Practice Partner, offered insights into the role of the non-executive director (NED) and how candidates can best position themselves to be considered for such opportunities.
Susanne Thorning-Lund has supported boards in the UK and internationally on the appointment of chairs and NED since 2003.
Irrespective of where businesses are based, or indeed their ownership structures, board positions have elements in common, particularly concerning governance. As a company director, NEDs are duty bound to ensure the business is run correctly, ethically and in the interests not only of shareholders but wider stakeholders including employees and the local community. Where the role differs depends on ownership structure, location/jurisdiction and sector-specific pressures and parameters.
NEDs must work as a team with others in the boardroom to bring their knowledge and expertise to bear. Clearly, that expertise is determined by the nature and track record of the individual. Someone with a manufacturing background could help a company think through supply chain details and processes, for instance, or assess the challenges of setting up a plant in Hungary.
A board will typically carry out a skills gap analysis when appointing a NED. Susanne notes that boards therefore often seek individuals who are “an answer to a question” to help plug gaps in strategic expertise, be that M&A, organisational restructuring, particular geographical insights and so forth.
Whilst NEDs are not expected to be experts in every aspect of the business, it is vital to stay alert to changes in regulation affecting finance, ESG, cybersecurity and other key areas. Those interested in pursuing NED roles would do well to familiarise themselves with the Financial Reporting Council’s Guidance on Board Effectiveness.
Ownership structure has a big bearing on what is pertinent. Charity trustees or school governors face different circumstances and priorities to NEDs appointed to listed or private equity boards. Whilst a school governor’s responsibilities centre on ensuring high quality teaching, OFSTED reports, the health and safety of the children, at a major listed company the focus may be on succession planning, reward and ESG concerns, and in private equity it may be on making companies leaner and fitter to accelerate growth.
In family businesses, a NED might involve helping smooth leadership transition from one generation of the family to the next. Given the sometimes complex and intertwined nature of relationships in multi-generational family firms, emotional intelligence is a prerequisite alongside other relevant attributes.
In recent years there has been welcome progress on equality, diversity and inclusion in UK boardrooms, helped by initiatives like the Hampton Alexander Review and the Parker Review. This has seen the learned experience of individuals come to the fore, boosting opportunities for candidates with a non-traditional background.
FTSE350 companies almost exclusively turn to executive search firms like ours to fill NED positions, and sometimes we are asked to consider candidates suggested by a firm’s auditors, brokers, lawyers or existing NEDs. The Government, meanwhile, also makes use of executive search firms and advertises public appointments online.
But how can candidates put themselves in the frame? “Clarity is good,” says Susanne. “Think about your USP, what is it that you can bring? What are your stronger suits? If you have any NED contacts, invite them for a tea or coffee and ask them how they found their roles. And particularly importantly, ask them how they perceive you. What do they see as your strengths and weaknesses? If a head-hunter called them for informal soundings about you, what would they say? If you don’t agree with their view, this is your opportunity to correct them, or indeed evolve your view of what you could contribute.”
To get an idea of how to present yourself, Susanne suggests looking at a company of interest to you, at their website and annual reports, to see what they say about their trustees/NEDs and think through how you can reflect that in your CV. You should also be up to speed on the macroeconomic, stakeholder and competitive landscape in which businesses operate. But she advises, keep an open mind on where your first NED role could be.
Once all drivers have been considered, and if the time commitment can be met, a non-executive role can be hugely rewarding.
For further information on how you might secure the first NED role, please reach out to your sector specialist at Odgers Interim.