A high-quality non-executive director will know what’s right for a business and its stakeholders. They’ll provide support and guidance for the executive team, sharing experiences and insights, but they will also possess the strength of character and integrity to challenge when necessary.
Tom Beedham, Director of Programme Management at Criticaleye, comments: “The chair sets the tone and tempo of debate in the boardroom, but each non-executive director has a vital role to play. They must take the time to understand an organisation, both its culture and commercial model, and be ready to contribute when required.”
In research conducted by Criticaleye, 67 percent of NEDs said they are facing business model disruption, and yet only 16 percent are fully confident in the ability of the executive team to respond accordingly. Tom reflects: “Perhaps more than ever, NEDs need to be thinking about the quality of leadership in their organisations. What are the skills and attributes required in the top team to deliver success over the short, medium and long-term?”
Ahead of Criticaleye’s Non-executive Director Retreat 2018, to be held in association with EY, we spoke to a mix of seasoned Chairs and NEDs to find out how to perform at the highest level in the boardroom. This is what they had to say:
Knowing When to Influence
Leslie Van de Walle, who is a Board Mentor at Criticaleye and also Deputy Chair of Crest Nicholson plc and Non-executive Director at HSBC UK, notes that it’s important to keep your ego in check. “[You need to know] when to shut up, when to support and when to challenge management, and it’s a difficult skill… You have to accept you are there to help the executive team be more successful.”
It’s a balancing act. Graham Lyon, Non-executive Chair at InfraStrata, says: “There is a temptation to actually do the job for the executive, so one of the challenges is to be able to step back and create a team. I often say it’s like spinning plates… my job is to go around and make sure those plates don’t fall off. But one of the challenges I see with certain NEDs is they actually want to do it – they are frustrated executives.”
Understanding the Business
Vanda Murray, whose current roles include being Senior Independent Director at Bunzl, Chair at Marshalls and a Board Mentor at Criticaleye, comments that great boards look at four things: strategy, performance, risk and people.
She explains: “The characteristics of a great NED are that they understand what the purpose of the business is; they are part of a team – and that’s a high-performing team. [They’re] not a police person to monitor [the execs], but they are there to challenge, support, get alongside and always represent the shareholders. [They also need to have] the long-term interests of the company and all of its stakeholders in their mind.”
Jane Furniss CBE, another Board Mentor at Criticaleye and Non-executive Director at the National Crime Agency (NCA), notes that NEDs need to be keenly focused on the outcome an organisation is seeking to achieve, particularly if it’s in the public interest. “[They must] ask strong questions, intrusive questions, about how well the organisation is delivering on its strategy,” she says.
The idea of a NED simply attending board meetings and then effectively vanishing until the next one is increasingly old fashioned. John Duncan, Non-executive Director at The Logistics Institute and Managing Director of Heathview Consulting, comments: “A NED needs to really put some extra time and effort into getting out into the business and meeting the people on the frontline; meeting the… team that supervises the workforce and getting into small-group situations to understand what their point of view is on the business. [You need to have] a bottom up and top down perspective.”
Expect the Unexpected
Boards must be thinking about disruption, particularly in the context of digitisation and automation.
Phil Smith, Board Mentor at Criticaleye and Chair of Innovate UK, says: “The world is changing extremely fast, not just in socio-political terms or in economic terms, but clearly in technology terms as well.
“I think NEDs have to recognise that their role within a business is to help [executives understand] how to live, sustain and grow… in a complex world.”
In such an environment, NEDs have the ability to provide invaluable insight. Bill Payne, Board Mentor at Criticaleye and Chair of Primedoc, says: “The whole point of being a NED is that you’ve got something in your head that is years of experience, where you can contribute and add value, not just ask questions…
“You want the senior people on the board, the executives, to be able to come and, in a safe environment… seek advice as to how they drive their business forward.”
These comments were taken from two Criticaleye films:
To find out more about Criticaleye’s forthcoming NED Retreat 2018, contact Tom Beedham
To read Tom’s article on the impact of the latest governance changes on the nomination committee, click here