Senior executives who take the plunge and bring in a Non-Executive Director (NED) will, more often than not, describe it as the best business decision they’ve ever made. But what exactly does a NED bring to the table?
Former CEO of Co-op and newly appointed head of Hilton Food Group, Steve Murrells, put it perfectly when, at our recent NED event, he said: “They will look at things through a different lens. They are there to challenge but they are also there to support.”
He went on to say that: “They’re there to bring curiosity to any organisation and remind you, I’ve found, of the importance of the basics, on working on a basis of less is more but challenging you in a way that makes you better and makes your organisation win.”
Raise your business game
Barry Gamble, Senior Advisor to the Non-Executive Directors’ Association (NEDA) agrees that this ‘bigger picture’ approach is central to the role of a NED in any business. But he is also keen to point out that they will get into the nitty gritty of things as well. They will know
‘when to go into the weeds of the business’ as he puts it.
“The NED will help the exec team to raise their business game, bringing form and formality. They will also allow for more time for real debate and good decision-making,” he explains.
“They will help you with the shape, size and make-up of the Board so that you get it right. They ensure that quieter voices are heard and leftfield is not ignored. And they will help you avoid “group think” on the Board. They help but do not meddle. They listen and listen well.”
A listening ear
Having someone there to listen to you is something that not many senior executives realise they need until they have it for the first time and start to appreciate just how valuable it is. Being an MD or a CEO can be incredibly lonely – ‘it’s lonely at the top’ is a phrase that so often gets banded about when discussing the need for a NED.
Having someone there whom you can openly talk about ideas with, however obscure, or voice concerns to, can take a real weight off your shoulders. These are not necessarily things you want to discuss with your wider team. You’re in charge, you need to be seen as knowing what’s right but these are not easy decisions to make in isolation. You need a sounding board.
As Steve Murrells says: “It is someone you can talk to in a way you might not be able to with your management or leadership team. Their insight and experience help you step back and think radically and question the things that you’re doing.”
Charlie Guy, Co-founder and CEO of Bristol-based start-up LettUs Grow added to this by pointing out the benefits of having a NED who can provide a listening ear to people across the business. “A NED can build the bridge between you as the exec team and stakeholders. They can have one-to-one chats with both sides and then help everyone sway in the right direction.”
Gain financial investment and stability
Bringing a NED on board at a time of change in the business is often when you will get the most out of them, not least if you’re looking for investment. Adam White, Head of Agriculture at Barclays Business Banking explained: “I have seen thousands of business plans. None of them ever really achieve what they say they will. But the ones that do are the ones that have had advice, usually from a Non-Executive Director.”
They can support with raising funds and investor due diligence, as well as situations like family succession which can be emotional and stressful – they can be that steadying hand at times when you might feel most vulnerable.
Charlie remembers the point at which he brought Hadyn Parry on board as a NED at LettUs Grow. “I was 23 and we were growing fast. I looked at myself and thought, I could do this on my own but having someone there cheerleading would be amazing. I was also told I needed a Board - we had six, or seven figures in the bank but no financial experience. Who would trust us?
“At first, I couldn’t understand why Hadyn would want to work with us and the fees were a bit of a shock. But we wrapped the move into an investment round, which helped pay for the input and we then didn’t even think about the cost.”
Size doesn’t matter
Charlie’s experience is a testament to the fact that it doesn’t matter how big or small the business is or where on your business journey you are, you will always be able to find someone who can really add value. This is something our own Guy Moreton found out when he first started MorePeople. It can be particularly hard for small founder companies to take on a NED, but as MorePeople’s first NED, Michael Paske, pointed out: “You’re never too small to learn.” He started when there were just four members of staff!