The report, released today, gives an interesting snapshot of the role of non-executive directors. It reveals that
- NEDs tend to have a number of businesses on their CVs. Only two per cent of those interviewed by Coutts were advisers to just one company.
- Nearly a third (31 per cent) advise between five and 25 organisations.
- Priority skills required of a NED from a business owner perspective are: finance raising (32 per cent); starting and running a business (31 per cent); and delivering a business exit (26 per cent).
- Nearly nine in ten entrepreneurs said they judge the suitability of a non-executive director on track record. Over half (57 per cent) of entrepreneurs said a broad commercial career experience was a pre-requisite for the role.
- More than half (55 per cent) of business owners and a third of non-execs (35 per cent) feel that non-executive contracts should be limited, and that NED teams should be regularly refreshed.
- Two in three (66 per cent) of NEDs prefer a mixture of a flat fee and shares in the business in remuneration.
- Networking (89 per cent) and business referrals (88 per cent) are the best ways to meet non-execs.
- Be clear about the brief, and identify where there is a gap in knowledge and skills that need to be filled.
- Be open-minded about the nature of the appointment and consider whether you need a NED or a business adviser.
- Make sure the fit is right with the business in terms of skills, culture and management team compatibility.
- Source non-executive directors through referral and recommendation and sell them the reasons for working with your business.
- Set clear parameters for the relationship from the start covering performance expectations and related reward and recognition.
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