I often get asked by clients ‘What makes someone a good NED?’ and ‘How do I know if I am suitable to join the boardroom and can do the job?’
The role of the Non-Executive Director (NED) is continuously evolving with the accelerated pace of change we are facing not only due to areas like technology, regulation and environment but also more recently the consequences of the pandemic has shifted businesses forward and put NEDs and boards in the spotlight. The role of a board member is increasingly complex and requires specific skills and knowledge. To stay relevant, even the most experienced NEDs need to keep up with latest developments inside and outside of the business. An exceptional NED is someone who is curious and continuously working on heightening awareness through developing their skills, broadening their knowledge and opening their mindset.
What exactly is expected of a NED?
NEDs have a responsibility for providing the company and board with an independent perspective based on specialist knowledge and bring a strategic mindset, to constructively challenge and assist in formulating a course of action. The role of the NED is not to do the doing but to be a coach, mentor and advisor while the executive team is behind the steering wheel.
What characteristics do you need to be able to do that?
Some of the more generic terms you have probably heard or read about are sound judgement, strategic thinking, business acumen, team player and interpersonal skills.
It helps if we instead look at three areas that are fundamental to being an Exceptional NED - you need to have the right skills, sound knowledge and a healthy mindset. These all help to create a better understanding and awareness of yourself but also the world around you, which in turn leads to better quality decisions that will have a positive impact on the business and all stakeholders. Let’s have a look at each in more detail.
Skills
A NED is someone you turn to for expert advice in times of crisis. While boards typically expect candidates to bring a broad sweep of commercial experience, they will also seek “spikes” in terms of specific strengths and attributes. These may include regulation, technology, risk, climate, industry or market specific, digital transformation, finance, culture change, restructuring, customer engagement skills just to name a few. It is becoming more essential to not only have financial skills but also good all-rounded awareness of risk and an understanding of technology and how that impacts business.
How? Keep building on skills through specific courses that address gaps you have. It is essential to build a solid foundation of skills and understanding so learning about the key areas of Finance, Strategy, Risk and Governance is a must, but by no means exclusive.
Knowledge
NEDs need to keep up to date inside and outside of the company, and bring a strategic mindset to the boardroom. That means acquiring knowledge and understanding of the business and the context in which it operates. You need to continuously be on top of market trends, new technology development, socio economic factors, regulation etc so that you have a good understanding of how that would impact the business but also how the business will impact all its stakeholders, which affects its corporate reputation.
How? Research the company itself, the management team and board members. Get a good understanding of the industry sector and keep up to date with news feeds, join specialist webinars, subscribe to trade bodies and institutes, join discussion groups online, attend conferences, read analyst comments, network with other board members, extensive reading of financial, socio and political news. The aim is to help you make well informed decisions resulting in better outcomes. It will also give you more confidence to argue your point, which will lead to you have more impact in the boardroom so that you can be a catalyst for good.
Mindset
Whilst your skillset gets you noticed for a board position, it is your mindset that will make the difference in terms of a successful first appointment and also the extent of the impact you will have once in the boardroom.
Exceptional NEDs have good interpersonal skills, an ability to articulate confidently and adapt their style to people and business situations. They are courageous and have a strategic mindset with an ability to switch from detail to big picture. But most importantly, they are curious, empathetic and diplomatic with an ability to listen and understand other peoples views.
How? Even though you might feel that you are lacking in some of these attributes, the good news is that it’s not too late to develop those. By working with a mentor or coach you can develop a healthy mindset and heightening your self awareness. You will find that your confidence will grow which in turn will help you to have more impact in the boardroom and beyond, leading to better decisions.
A Perfect Match
The strongest NED is the one who is joining the board for the right reasons. By creating awareness you will have a much better understanding about yourself, what values that are important to you, what skills and experiences you bring, which will make it easier to find the right board role that excites you. Finding the perfect match is the final piece in the jigsaw to become an Exceptional NED.
Finally
The very nature of a board is to constantly look ahead, which is why it is essential to keep learning and developing as you progress through your career as a NED. There is an increased emphasis on training for even the most experienced board members to keep up with the latest developments inside and outside the organisation.
NEDA (the Non-Executive Directors’ Association) is the member organisation that represents and supports NEDs throughout their professional career in the boardroom.
NEDA is committed to build a sustainable future by making sure that the people who serve at the top are competent so that they can be a catalyst for good and make better quality decisions. NEDs need relevant skills, up to date knowledge and the right mindset to have the sense of awareness needed to tackle the challenges of the 21st century.
To find out more please visit www.nedaglobal.com or email me at marie.ekerholm@nedaglobal.com