The increasing importance of a Non-Executive Director in a post Covid-19 world
Read our featured article on ‘The increasing importance of a Non-Executive Director in a post Covid-19 world’ and see what value having a Non Exec in your business can bring.
Moon Exec Search have been Corporate members of Circle2Success for over 2 years, Simon and Vanessa value the membership highly. This article about Non Exec’s is being kindly reproduced with permission from Circle2Success.
In this article we were asked to give our insights around hiring a Non Exec and the benefits. See here for more information, and to see our NED profiles.
We feel that 2022 is really exciting time to ask a NED to join a business, as they can add an unbiased pragmatic viewpoint.
If you are seeking to appoint a new NED or Chair, do come and talk to us. Or if you are thinking about becoming a NED yourself, we would love to hear from you! Contact us via welcome@moonexecsearch.com or 01275 371200.
A recent Survey conducted by EY: The NED Barometer (August 2020), revealed that, as businesses face greater complexity, the NED role is becoming more demanding. This is only likely to intensify as boards respond to the full impact of COVID-19, with NEDs using their wealth of experience to help executive teams navigate unprecedented challenges. As businesses begin to understand what the future may entail, they must reshape to address societal shifts and plan for economic recovery.
To plan for resurgence, NEDs will need to help their boards focus on:
Aligning purpose with customer needs.
Accelerating growth out of recovery to leverage competitive advantage.
Adjusting their business, their operating model and their ecosystem to deliver the strategy and secure resilience and agility.
Evolving their financial framework to articulate and measure the delivery of long-term value.
The Importance of NEDs
At Moon, we see that the addition of an independent voice in any business is critical, allowing a different perspective for boardroom discussions and providing valuable insights into the business and the surrounding landscape.
Ask yourself a series of questions:
What is your business model - Listed, SME, family owned, private equity etc? This will impact on the search criteria sought.
Why are you hiring? What is the context and aims of the role? This will determine what experience the NED needs to bring to achieve your goals.
Fiduciary responsibility: Does the candidate understand the legal obligations as well as their responsibilities and time commitment?
How will you value the NED once in situ? What impact could the NED offer you in terms of press opportunity, supply chain impact etc.?
What are the qualities of an effective NED?
You should seek very specific attributes in your NED shortlists, such as a considered, honest, approachable style, and a proven ability to interact at every level of the business. A good NED will challenge the Board appropriately, bringing an independent perspective to decision-making, whilst both holding to account and supporting the executive team.
We are seeing an increased demand for different types of NEDs in the post-pandemic world. Clients fall into two categories.
Those looking for transformation and embracing a very different future, by disruption, innovation, and growth.
Those searching for assured leaders who provide stability in times of fluctuation.
Some NED hires are based upon elevating the organisation’s profile. For example, the appointment of Levi Roots as Chair at St Pauls Carnival. Levi brings a relevant, established network and household name to a Board.
Other NED hires are based on adding top line strategic help to the executive team. Recently City of Bristol College appointed Simon Face to their board. Simon comments:
“This was the first independent Non-Executive Director that the City of Bristol College had recruited for their subsidiary training business, Partners in Bristol (PiB). Following the search and selection process I was fortunate to be appointed and already feel there is a strong and relevant connection to the West of England business network and College values because of the pre-work what was done...”
Some appointments are also based on clients recognising the importance of robust corporate governance practices, with strict fiduciary adherence with audit and risk at the heart of the search. Businesses may seek to strengthen or diversify their Board skills in readiness for specific corporate activity such as an IPO, however, we see that many NEDs are chosen to address an imbalance of knowledge or diversity on the current board.
When and how many to hire?
The majority of NED appointments are made on a three-year term, with the option to reappoint for a further three years.
Our experience suggests a NED should be hired after a thorough skills audit of the board and a NED should carefully consider what unique skills, they can bring in context to the existing board before they agree to join the organisation.
The number of NEDs on a board will vary according to whether we are discussing a regulated business with set guidance or, a privately owned business which can have a more flexible board composition. Our guidance would be that each NED appointed should bring skills or experience that is not already on the board.
Simon Quinn, Director of Search at Moon, comments:
“We have increasingly seen a new wave of clients seeking NEDs with a changing skill set. There is a desire to bring different skills such as brand management, contract and bid exposure, as well as innovation and creativity. Problem solving is now the most sought-after commodity, even though governance naturally remains high on the agenda.”
Vanessa Moon, Founding Director at Moon said ‘“We have seen a demand for NED’s increase in recent years, many of our clients value that they bring an independent perspective to decision making, and can support and mentor the CEO and Senior Management”
It is an exciting time to ask a NED to join your business, they can add an unbiased pragmatic viewpoint. Know what you want and why, as the NED you appoint now can help you deliver for the future.
© Moon Executive Search 2022
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