The role of the non-executive directors has evolved dramatically in recent years. Traditionally, non-executives were appointed by public listed companies but as the business world evolved, private companies, SMEs and, even more recently, startups saw the value non-executive directors could bring to their boards. As the reach of non-executives has widened, so has the remit and responsibilities of the role and the diversity and experience of those embarking on the journey to becoming an NED.
This evolution of the non-executive role has been shaped by changes to governance frameworks and legal regulations, greater stakeholder engagement and pressure coming to bear on boards and businesses, the emergence of. ESG as a core driver, and a greater emphasis on board dynamics and company culture.
There are core responsibilities and competencies which are relevant and applicable for NEDs in all industries and sectors - good governance, independence and a strategic mindset to name a few - but it is important to conduct industry research to identify the particular pressures that NEDs might face in their chosen sector or industry. This is also a useful process in identifying where you might be able to add experience and value that is being sought by companies in particular sectors. NEDs are also advised to research a company before applying - look into the senior leadership team, the board advisors and NEDs already in place, and financial reports and accounts. This information is readily and publicly available and can provide a real insight into the business, whether your right for it and whether it’s the right match for you, your skills and your aspirations.
One of the most exciting types of business for non-executives to work in is a startup. The role is often slightly more fluid and will evolve quickly as the company they work with scales, grows and maybe even pivots. The nature of startups can provide its challenges for non-executives - not least maintaining a strategic approach and avoiding being pulled into operational matters - but it also offers the opportunity to have direct and instrumental influence on a company from its infancy onward.
The big question for many aspiring portfolio professionals is how to actually find non-executive opportunities. While the more traditional avenues of personal networks and connections, headhunters and board level recruiters have their part to play, the world of portfolio professional recruitment is becoming increasingly democratised. Connectd has a network of hundreds of businesses actively recruiting board members, smart match technology allowing founders to connect with NEDs who have their required skills and experience, and guaranteed board roles through our Transition to Portfolio programme.
Non-executive director roles on the rise in the UK
As the business landscape has become increasingly complex, organisations have turned to experienced professionals for guidance and oversight. In recent years, major disruptions including the global pandemic, economic downturns, major wars and black swan events such as the Suez canal blockage have demonstrated how turbulent global factors can affect businesses. In the face of these risks and uncertainties, businesses of all sizes have looked to NEDs to provide support and guidance around robust and resilient long-term strategy. Emerging areas such cybersecurity, AI, stakeholder engagement, DEI (diversity, equity & inclusion) and sustainability are also areas in which boards have to put increasing focus.
Traditionally in the UK, NEDs were often appointed and stayed in roles for an indefinite amount of time. This led not only to groupthink and complacency but also a stagnation of talent and a lack of diversity. Fortunately, times have changed and many boards now have maximum term limits (often between three and five years). These limits are often set to ensure board refreshment, diversity, and independence. However, some companies may allow NEDs to serve multiple terms if they continue to add value to the board. Many boards now value succession planning as a major priority and will actively seek to bring in fresh - and often less experienced board members to inject new approaches and points of view.
Startup boards offer less experienced portfolio professionals a great chance to develop their skills and knowledge as the business scales. Many aspiring NEDs will often join startups in an advisory capacity and as the business scales will see their role transition to that of a fully-fledged non-executive. As the business becomes more established, NEDs may even join subsidiary committees such as remuneration, audit and nominations committees, or even become an non-executive chairman.
Non-executive directors: which sectors are in demand?
NEDs with expertise in the digital, human resources, and environmental sectors are currently in high demand but it is important to remember that non-executives are expected to do much more than offer advice and guidance in their own narrow field of experience. Board professionals can - and should - upskill in areas that will be crucial to becoming a competent and well-rounded board member. Connectd provides specialist CPD accredited training and events through our Transition to Portfolio programme to help professionals gain the knowledge and skills required.
In demand skills will change from year to year; for example, the global pandemic saw a leap in the demand for NEDs in the Healthcare and Pharma sectors and recently AI, GreenTech and Web3 businesses have seen an explosion, boosting the number of NED vacancies in these sectors.
Siftd recently reported a dramatic increase in the number of members comprising the average startup board. Startups are a dynamic environment, and provide the chance to positively influence embryonic, time-poor and growth focussed teams, and NEDs can be an indispensable asset in helping with longer term vision and robust fundamentals of governance. Many startup NED roles are remunerated on a blended basis of cash and share equity, the latter of which could be worth a great deal should the business become successful.
How to find the right non-executive director roles
When searching for non-executive roles the key is to make sure you are looking for the right kind of companies for you and your portfolio career goals. Once you have narrowed the field and identified opportunities you are interested in, due diligence is key. You should also look at where you can add value to a particular sector and consider whether you want to take your skills into an industry which is new to you or stay within the narrower confines of your previous C-suite career.
Don't be put off from applying for a role if you don't tick all the boxes in the job description. The transition from executive to non-executive is all about learning, adapting and acquiring new skills - remember, you will upskill as you grow into the role. Our Transition to Portfolio programme provides mentoring and CPD accredited resources to support you in your career transition and help you bring maximum value to any board role.
Connected’s smart matching technology allows founders to match with NEDs and advisors against a number of criteria including sector, primary and secondary skillsets, location and remuneration, boosting your chances of matching with the right opportunities for your skillset, experience and preferences.
When actively pursuing NED roles there are some areas that you should focus on to boost your chances:
- Make sure you are up to date with industry trends, industry legislation and regulations, and updates to Corporate Governance guidance
- Upskill and stay up to date with sector knowledge and board level legislation
- Build your network at events and connect with like-minded professionals via LInkedIn - your connections could unlock the door to new opportunities.
- Create a NED specific CV.This will be very different to an executive CV, reflecting the different approaches and skillsets of NEDs.
- Build your brand - position yourself as a thought leader in your chosen sector through LinkedIn activity (incisive commentary, original articles) and take opportunities to contribute to events and webinars focused on your areas of expertise.
Challenges in Finding Non-Executive Director Roles
In the past, the vast majority of NEDs found their roles directly through their network, relying on referrals and recommendation, and minorities were hugely underrepresented. However, boards and businesses are increasingly valuing diversity and understanding that bringing different perspectives and fresh approaches is incredibly valuable. Similarly, the average age of board members has dropped dramatically over the past 15 years and while it still holds true that your first NED role is the most difficult to secure, business leaders are increasingly realising that the finished article is not always preferable to someone who is less experienced but can bring new ways of thinking to their strategic plans.
Opening the door to your first board role can seem like a huge challenge - a challenge with which Connectd has helped hundreds of portfolio professionals. Our Transition to Portfolio Programme provides a guaranteed role within a startup, and this board level experience is invaluable to building credibility, skills and knowledge. Startup founders are more likely to think outside the box when recruiting board members and generally have a greater variance of board roles within their teams. Many will look to appoint board advisors and fractional executives, both of which can provide a great footing for approaching non-executive roles.
The benefits of a non-executive role
Non-executive roles provide a number of benefits including flexibility, additional income, exposure to diverse industries, and work-life balance. You can learn more about the role, the remuneration and its benefits at the links below:
How to become a non-executive director
What is a non-executive director
How to make additional income: become a non-executive director
Unlock Non-Executive Director Roles with Connectd platform
Connectd could help you to build the skills and practical experience needed to approach non-executive vacances with confidence, and tap into our network of hundreds of companies actively recruiting board members. Learn more below.
