One of the difficulties is finding the one person who has the breadth of experience to contribute to the wide range of issues you face it can feel like you’re looking for Superman (or woman!). And most business owners can’t afford the five or six people they need to remedy the problem. Great people don’t usually come cheap.
Often, non-executive directors turn out to be high-profile “names” that look good and impress outsiders, but who contribute very little to the actual decision-making process. But, let’s face it, this can be a very important part of a business’s marketing message and worth the £15,000 or £20,000 an NED costs every year.
Draw up a checklist of the qualities or expertise that you need most in a non-exec director. For instance, you might want someone with legal or accountancy skills or with mergers and acquisitions experience. Or, if you are thinking of floating on the stock market in due course, it might be wise to recruit someone who has been down this path themselves.
Having finalised your checklist, where do you find the right candidate This is more tricky. One way is to employ professional headhunters but this has a hefty price attached. Some firms have even tried advertising. However, most searches probably end up with business owners trawling through their own contacts to find someone who they already know and trust.
There is, however, an alternative which can address the need for a broad range of expertise, external perspective and realistic cost: peer boards.
These are groups of business owners who meet regularly to work on each other’s problems. Provided the board members are carefully chosen and the meetings are facilitated well, peer boards can address all the issues. And they must be run on the basis of trust, confidentiality and respect between fellow business owners.
Peer boards have been around for years and can be formed in a variety of ways. Some, for instance, have been set up informally by business owners themselves while others have been formed by organisations such as the Chambers of Commerce. The point is they work by using the combined experience of business owners to address common issues at a fraction of the cost of recruiting their own non-executive director.
Jo Clarkson is operations director of The Alternative Board.