Business Leader recently heard from Gary Ashworth, Founder and Executive Chairman of InterQuest Group, to hear his thoughts on the importance of a Non-Executive Director (NED) after the COVID-19 pandemic.
The pandemic – or, more accurately, the Government’s handling of the pandemic – has caused incredible devastation to businesses. Recovery will be an arduous process for many. Business leaders must be ready to pivot their offerings quickly and efficiently and find new ways to stand out, especially in saturated markets.
Used properly, NEDs can be a business’s secret weapon.
In times of crisis, business leaders can go one of two ways. They can either stick to what they know and run the risk of becoming stale, or they can break boundaries and take leaps into the unknown. The role of an NED is to push you to create the best version of your business possible, maximising efficiencies and opening up new opportunities. This is exactly where many businesses need to be heading to survive and thrive post-pandemic.
NEDs won’t be afraid to tell you the truth
Listening to home truths can be a horrible experience, especially if there’s a lot of them. But an NED knows it’s almost certainly what you need to hear if you are to survive this crisis. Agreeing with everything you say or keeping you sweet isn’t of interest to them, they’re not reliant on you to pay them a full-time salary nor are they gunning for a promotion.
NEDs don’t need you, and this is exactly the reason why you need them.
Being cruel to be kind is at the top of their agenda. They want your business to succeed as much as you do, especially as, in addition to their monthly fee, many NEDs will often receive a small slither of equity.
Stakeholders will feel more settled
Shareholders will be reassured by the inclusion in the Board of an Independent Director who still has a fiduciary responsibility to comply with all laws and regulations. NEDs help to keep the Board compliant and will often sit on the audit committee or remuneration committee. This ensures that the benefit packages for senior executives are not out of kilter with market rates, so that any outside shareholders are not disadvantaged.
You’ll get access to their wealth of experience
If you’ve chosen the right individual as your NED, they will have picked up a plethora of very useful and competent contacts during their career. They’ll know when price feels right to help you negotiate the best deals and they’ll have good knowledge about how your competitors are performing.
They will plug your skills gaps
From time to time, companies need to deal with things that are outside of the normal course of their core trading and skill set. That’s when the skills of a NED can really come into play. It might be that your company is dressing itself up for sale, considering an important acquisition, implementing a new software system, floating on the stock market or even de-listing.
A high functioning NED is the oil that helps the engine run smoothly and knows exactly what to do if there’s an unexpected breakdown.