How to launch your next career as a non-executive director

Smart boards are always seeking ways to gain competitive advantage. You can't help but notice the increasing number of non-executive directors (NEDs) being recruited to the boards of UK companies. This is with good reason. As the economy continues to recover, the strategic decisions taken now will have a profound influence over which businesses rise with the tide.

There is an increased recognition that the perspective, wisdom and know-how of seasoned NEDs can make a significant contribution to developing a winning strategy.

Let's consider what it takes to ensure the right fit between an organisation and the experience and motivations of particular NEDs. After that, we will look at what would-be NEDs, particularly in professional services, should be doing right now to create a pipeline of opportunities for when the time comes.

Characteristics of successful NEDs

The most successful NEDs share four common characteristics.

1. Good judgement of people and situations - asking 'what's really going on here' and having the ability to step back and assess the issues in light of that knowledge, combined with strong interpersonal skills. (Top tip: the NED's role is not the same as that of managing partner/CEO, so choose the points you make selectively; people may not listen to you in the same way that you are used to).

2. Strong interpersonal or social skills - knowing who to listen to. Don't be isolated at top-level management; those at the 'coal face' can also contribute fresh thinking. Look for opportunities to chat with non-executives/non-board members. Also, remember that you want people to listen to you, so be prepared.

3. Great antennae - for example, knowing where to look in the board pack, what to ask when touring the company offices or sites, or spotting issues with the CEO.

4. Very good at managing conflict - either around the boardroom table or in a transaction environment.

Transitioning into a NED role

There are a range of challenges that people face in developing a portfolio career that includes NED appointments. These include navigating the personal financial issues that can arise as you make the change from a paid full-time role as well as practical concerns such as how to gain your first role.

Gaining a NED role is a highly desirable option for partners and other senior executives in professional services firms who are considering their futures as they move towards retirement. Yet, there are many challenges to transitioning to this role, as busy professionals are often so preoccupied with the demands of their practice that they hardly get time to develop broad-based experience, let alone grow their network.

It can also be a long journey to the right position - so start thinking about NED roles at least a couple of years before you actually want to become involved. Bear in mind any potential conflict of interest with your current roles.

To maximise the chances of finding the right NED appointment, develop a broad skills base through being interested in different things. Non-executive director search companies look for 10-plus years of board experience, which can be achieved by getting on your school board or becoming a charity trustee, for example.

Start early. Begin to build your network at least five years ahead of your leaving date. Leverage your firm's existing resources to organise dinners and make the effort to attend business association networking events. Volunteer for business working parties that stretch your capabilities beyond your day job.

Don't forget to use LinkedIn strategically. Your network makes you powerful, so work at it. Subscribing to quality business management publications and websites will improve your knowledge and broaden your mind. Case studies and thought leadership articles from top management consultants and business schools can add richness and depth to your thinking.

The key role of every board and NED, and therefore how they add value (including to professional services firms), is:

• effective governance and risk management;

• clarity and insight on strategy and key choices;

• performance oversight and challenge;

• board and executive committee succession planning; and

• stakeholder management and relationships.

If you can add significant value in half of these areas and provide wise counsel on the others, you will be a welcome member of a board.

Choosing the right NED position

Becoming a NED is a serious undertaking these days. Before joining a board, potential NEDs should consider taking the following steps.

• Don't simply trust your friends and always do your due diligence. An easy-to-get NED role, even from a friend, often has a sting in its tail.

• Take the time to choose a position that you want. Are you clear about the personal commitment involved? This is often much more than people realise.

• Don't be flattered into taking the first NED role that comes along. Make sure that your enthusiasms and interests are aligned, as it can be a hard slog if they are not!

• Go to a board meeting as a visitor first, sit in the café and listen to people, bump into executives and ask them informal questions and, if you can, talk to former board directors.

• More formally, ask for the NED board pack, previous minutes, financials and operational reports, but try not to overload the company with requests. Go onsite and meet the business.

In choosing the role, ensure you define what you're offering and advertise using a website, LinkedIn profile and headhunting services. Make sure you hone your CV and highlight your transferable skills as well as industry-specific experience, but stay within your skill set.

Try to write your supporting evidence of skills and your CV. Strip out what you do as a lawyer - although extremely challenging, this will help you to identify your broader skills set and help you to assess situations in which you might make an impact.

Consider also whether working for a particular organisation will have a positive impact on your reputation. Be prepared to say 'no' to some opportunities that do not feel quite right.

Use your LinkedIn and other networks to see if you already have connections that work with the organisation you are considering and talk to them about their impressions. Also, think about how people find you, make yourself visible (for example, by creating a personal website) and connect with other NEDs.

Need for diversity in boards

Diversity is critical to high-functioning boards, as the role of the non-executive is to provide a fresh perspective and challenge established corporate thinking. Diversity is really about having different approaches. This can be achieved through gender, experience, nationality and many other routes.

There is now plenty of data to prove the correlation between good governance and good performance; equally there is evidence to support the impact of diversity. This is now particularly important to UK businesses as the clients we serve and countries we operate in are increasingly diverse and, to an extent, like the judiciary, this should be reflected in our boards.

The author gratefully acknowledges the contributions of John Jeffcock, director of the Winmark NED Network, to this article.

Saunderson House is a technical partner to the Winmark NED Network

 

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