Stepping up from CEO to Non-Executive Director
Not all good CEOs or senior managers will make good Non-Exec Directors (NEDs). The main reasons for failure are:
- Not fully understanding the role of an NED;
- Not fully embracing the role.
The legal duties of a Non-Executive Director are the same as those of UK company directors. Below, we have illustrated the differences between the roles, and provided three tips for avoiding the pitfalls and being positive about stepping up from Senior Manager to Non-Executive Director.
1. Senior Manager vs Non-Executive Director
As a Manager, your job was to carry out directives from the Company Board but as an NED, those decisions are arrived at through an awareness of several contributory factors. Compliance with changes in corporate law and industry regulations can affect strategic planning. An NED’s role means looking much further ahead, not just Now & Next.
A good NED will view the whole organisation from a slightly detached viewpoint, understanding how each element interacts, with a view to taking the company forward.
There is a clear difference between conformance to company policy (Manager) and contributing to company policy (NED).
2. Non-Executive Director and the Board
As a ‘newbie’ there may be a tendency to feel that you are not quite equal to the longer-serving board members. However, you must be strong and question your fellow Directors if you are to fully understand and agree with their proposals going forward. Don’t be in awe and don’t be bullied. You should all share the same goal of achieving success for the company.
Don’t hold back from challenging other Board members. Being new to the role is the perfect time to ask questions. Asking for clarification, objective questioning or even playing ‘Devil’s Advocate’ will enable a strong case to win favour and help to identify proposals that may need some more thought.
When the time comes for your input to be justified to your fellow Directors, be prepared to respond as an equal.
3. Long-Term v Short-Term thinking
Managers within the organisation need to have clear Now & Next goals from the Board.
As a Non-Executive Director, you have accepted responsibility for the longer-term welfare of the company, not just its reputation, customer base and resources including staff, but its value to shareholders or stake-holders. It is now your job to look ahead and focus on the future strategy to build on the value of the organisation.
The Institute of Directors has defined the Responsibilities of a Non-Executive Director, stating that “Essentially the non-executive director’s (NED) role is to provide a creative contribution to the board by providing independent oversight and constructive challenge to the executive directors”.
Nauzar Manekshaw at MIERA Consulting is an experienced Non-Executive Director delivering business transformation, growth strategy and governance for public & private sector enterprises. Contact Nauzar on 0208 634 5200 / 0776 899 4681 or by email firstname.lastname@example.org.