How to become an NED
Following a successful career in business, many entrepreneurs look at the possibility of becoming a Non-Executive Director. Business Leader spoke to recruitment specialists Moon Executive Search and Robert Walters on the subject.
According to Moon, there are some key facts to consider before taking up an NED role.
- Be realistic – It is a very competitive market. You need to have an extensive portfolio for what a specific company/sector/stage of growth needs.
- Due diligence – You’ll need to do in-depth research for the company to understand the growth potential of the company, and what you could bring to the team.
- Management experience – An NED will need to be able to collaboratively work with the board, but remember that you are there to advise, rather than action change.
- Stand out from the crowd – When looking for a role, you will need to highlight what separates you from the rest. Specific knowledge? An extensive investor network? Proven success in a niche sector?
- Market profile – Does your network know you are looking for an NED role? You will need to publicly demonstrate your knowledge of the sector and any trends within it – all while connecting with the right audience.
- Independence – A successful influencer will be able to act independently, without any conflict of interest – and to challenge leadership from an outsider’s perspective.
- Training – The role is hyper-specialised and only reserved for highly successful individuals. However, training is needed on the best way to proceed as an NED. The IoD, ICSA and many others run training courses.
- Expectation – When offered a role, make it clear what is expected from you in terms of your time and other parameters that are a part of being a new NED. You’ll need to invest your own time and knowledge on their terms.
How does this differ for a role at a FTSE firm?
Daniel O’Leary – Business Director at Robert Walters shared his views with Business Leader Magazine.
The recruitment process for a NED at a FTSE business is quite a stringent process – typically the Nomination Committee and Chairman will conduct the interviews and so a business leader such as a CEO is likely not to be part of the process. Other areas they will consider when looking for a NED in the current climate are:
- There is a huge D&I focus at the moment and this will continue – especially due to the findings of the Hampton Report which highlighted a number of shortcomings across the NED world.
- The NED often will sit on the Audit, Nomination and Remuneration Committees and as such needs to have a strong advisory background across multiple business areas.
- The biggest attribute of a NED is being able to put aside often previous leadership and ultimate decision making skills to become a trusted advisor to the key decision makers. This is often one of the most challenging transitions of a NED – especially if they have had overall control such as a CEO or CEO in a business.
- The pandemic has shone a light on the need to improve the digital agenda within a business – more and more Boards are starting to consider CIO and CTO level candidates as opposed to previous CEO , CIO and CFO candidates to provide balance to the advisory team.
- IFRS and Regulatory governance can be a big part of the NED world and candidates with this background can often be in high demand – especially for Audit Committee roles.