Most business owners will recognise the vital role that Non Executive Directors (NED) play in supporting business growth. In recent months the ambitious entrepreneurs we support seem to be asking more and more, what should we be looking for in a NED? Apart from the clearly obvious of, can we work together? Do we like each other? There has to be more to the relationship than a meeting, obvious advice and see you in a month – and by the way here’s my invoice. Having been doing what I do for the past 25 years, I have seen so many individuals picking up NED roles because its fuels ego and becomes a great thing to talk about with their mates at the pub or golf club. Many of my peer group who have engaged NEDs often end up referring to them as professional sausage roll munchers who merely turn up for lunch and offer no added value.
Care is a really important attribute when looking for a NED – will they be bothered? Will they listen can they genuinely empathise with the journey I am on? Having reflected on the hundreds of businesses we have worked with over the years and who have engaged and made best use of their elite advisers, the best in class NEDs would appear to pass the G.I.C.C test. Over and above care, like and trust they bring with them:
Governance – this is the ability to ensure order and good housekeeping is brought into the business practices. Regular board meetings, financial compliance, risk registers, legal obligations and many of the issues that constitute a well run business. This is the downfall of many entrepreneurial businesses particularly when they are talking to funders or investors. A good NED will ensure that all statutory obligations are met. A well run business sends out a massively positive message to funders.
Insight – this comes in many different forms and needs to be directly related to the growth journey the business has embarked upon. This insight could be fund raising, markets and customers, organisational or personal development for the inexperienced entrepreneur keen to transition the stages of growth.
Connectivity – for me this is where many NEDs fall short of the mark. Opening their ‘black book’ of contacts whether this is potential customers, investors or advisers for me is such a critical part of the role. In my experience very few are willing to share their network. Many entrepreneurs are often looking for trusted advice and connection to networks that will propel their business performance to the next level.
Challenge – a good NED should ensure the management team is executing the agreed strategy and plan. Openness and honesty are essential ingredients of a relationship and any NED worth their salt should challenge senior managers on performance against plan. The role should span the spectrum of loving mother/father to task master and everywhere in between.
The NEDs I have worked with and who embrace the G.I.C.C way of doing things make positive contribution and a life changing impact for ambitious entrepreneurs and their shareholders.