A non-executive director, or NED, can deliver a lot of valuable assets to a small business. Examples include expertise, contacts, new ideas, and constructive criticism. Recruiting the right NED can have a powerful impact on a company no matter how big or small it is.
While lots of professionals are vaguely familiar with the idea of a non-executive director, many are also unclear on exactly what they are and what they can do for a growing business.
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Benefits Of A Non-Executive Director
1) Filling Experience Gaps
If you lack experience with an important part of your business’s workflow or you’re targeting a new industry with which you’re unfamiliar, a NED can supply the missing expertise you need.
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Many people in the non-executive director role have already worked with growing or struggling businesses, so they’re likely to understand your needs intimately. Even when circumstances fall outside a director’s direct experience, he or she is likely to have useful contacts who can deliver insight.
2) Supplying A Fresh Perspective
Your non-executive director doesn’t work “in the trenches” with your company on day-to-day tasks. (Few NEDs devote themselves to a single business full-time.) Instead, a NED surveys your business from a wider perspective.
Worried about the overall direction of your business? Struggling to meet your goals? Curious about major environmental alterations that might help or hurt the business? Wondering about the biggest threats you face from competitors and how you can get an edge? A non-executive director can assess high-level concerns like these and present you with experienced and unbiased advice.
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3) Power Networking
Almost all successful businesses develop an intricate web of personal and professional connections that helps them succeed. The time required to do this is often too dear for smaller businesses, though. They struggle to build and maintain the contact networks they need.
A non-executive director brings with him or her a valuable address book filled with useful industry contacts. NEDs commonly have strong ties to suppliers, distributors, or even potential customers, all of which can help you. A NED is also a great resource for finding productive partners or consultants when your company needs them.
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4) Managing The Managers
The boardroom is a curious environment, and it’s a place that can become surprisingly unhealthy for your business. Personal animosity, poor scheduling, and bad business habits can all take root on your board and get in the way of your company’s best interests.
Introducing a NED will provide an impartial voice that can be extremely useful in arbitrating disputes and keeping the management team focused on management.
5) Providing Objectivity
A non-executive director fills out your board in many ways. Not only does a NED supply experience and insight, he or she also delivers a more objective point of view. You can trust a NED to gauge potential problems and possibilities more accurately than someone fully invested in the success of your business.
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If you’re expanding and considering flotation, for instance, your non-executive director can act as the impartial mediator while you consider the benefits and drawbacks of the move. NEDs provide a similar sense of balance in more challenging times, relieving stress and giving your board an important voice of reason.