A Non Executive or Non Exec/NED as they are frequently referred to is a very valuable asset for any new business owner. The Non Exec provides a more hands on type function within an SME than the role they might traditionally have played in a large corporate organisation. They can add a great deal of value in many ways and in many areas. For example, they might:
- Act as a sounding board for your ideas and plans
- Provide an overview of the business, often referred to as a “helicopter view” of things
- Provide strategic direction and help you to make the big decisions
- Provide sector knowledge
- Provide support for international expansion
- Provide functional knowledge and oversight eg a Non Exec Finance Director will help you with high level finance issues/aspects
- Provide specific customer focus and knowledge, perhaps if you’re looking to expand
- Provide product development / R&D input
- Act as a mentor and assist with your personal development
- Run Board and other formal meetings
- Help you to assess new opportunities to tender for projects or with bid proposals
- Help with fund raising
- Assist with negotiations with third parties such as banks, suppliers, etc
The NED is likely to be someone who will challenge you to “step outside your comfort zone” but at the same time, they will be supportive of you and help you to develop over time, both personally, technically, professionally and operationally.
How do I go about finding a NED ?
A Non Exec can be sourced through many routes:
- Friends/family network
- Professional advisers including Banks / Lawyers / Accountants / Corporate Financiers
- NED platforms
- Recruitment consultants
How do NEDs charge for their time?
A NED will tend to charge for their time on a day or half day rate or it might be on a fixed annual salary basis. Rates are agreed between the two parties. Some NEDs might even invest in your business, once they get to know it.
How much time does a NED work in the business ?
Traditionally a NED would work with your business for 2 days per month; one in preparation and the other attending a Board meeting. However, these days, that formality seems to have been diluted and a NED can be more involved and often for more than the 2 days per month. In many cases the NED is more of a Coach for the owner of the business and will work with you for as much or as little time as you both decide is required. It might be that there is a greater need early on in the relationship to spend more time, perhaps with a particular project or specific short term aim in mind. Thereafter, the goal has been achieved, the time might drop back somewhat.
Either way, a good NED is worth their weight in gold.
