What are Non Executive Directors?

It is now widely accepted by both the UK government (which commissioned a report into the role of non executive directors in 2002) and UK business that boards gain from a combination of the breadth of view of non executive directors and the depth of knowledge of the executive directors.

A non executive directorship is an appointment to the board of a company on a part time basis. The work of a non executive director generally involves attending some board meetings and company functions, with the aim of providing experienced, intelligent advice to the company board, the chairman or management.

Non executive directors can offer advice from the perspective of somebody not absorbed in the day to day details of business - based on the view of an outsider looking in and on the non executive director's own personal skills, business experience and industry contacts. People who hold these positions are often referred to as NEDs - non executive directors.

Many of the FTSE 100 companies employ non executive directors, their role is to sit on the Audit Committee, Pension Trustee Body, Directors Remuneration Committee and any other Committees that require an independent body of thought, separate and not answerable to the Chief Executive, Managing Director or Chairman.

However the majority of SMEs do not have NEDs. The prevalence of NEDs within SMEs is still directly related to the size of the company with only a fifth of smaller companies, i.e. those with fewer than 50 employees, having NEDs. But this seems more to do with cost than the value and contribution that the NED can bring.

For this reason Silent Partners provide a non executive director service at a very affordable monthly cost. This allows the smaller businesses to evaluate first-hand how useful it can be to work with a NED on a regular basis.