While we’ve all heard of high profile NED appointments in large corporates that have gone very wrong, more subtle and often hidden, is the much higher number of Boards that don’t quite fulfil the potential of their businesses. Stagnating, missing the best strategy or panicking – pulling the wrong levers in a crisis.
As seasoned non-executive search specialists,we know that an effective NED provides a collected and calm approach, seasoned business acumen and higher levels of strategic input – ultimately becoming a critical member of the Board. This is why finding the right non-executive candidate is vital, although not necessarily easy. There are only a few candidates actually qualified for the role, and all too often this reality only comes to light after the event, particularly when it comes to a hastily-made hire.
Here are our top tips for recruiting a non-executive director with the skills and character to transform your business right first time:
- Take time to work out the NED specification – For the best outcome involve the whole Board at this stage. Tie in with the up-to-date strategic plan, business aspirations and any significant future events. Ideally, the spec should be developed by a Non-Executive Director and formalised through the nominations committee. When hiring a Chairman, recognise agreeing the specification is even more critical, requiring more effort across a Board.
- Aim high. Don’t compromise too early – At the very least, you should be aiming to match the organisation’s ambition and strategic plan.
- Think ahead – Consider where the business wants to be in three or five years’ time and use this to help shape the profile of your ideal non-executive director.
- Expand the dynamics of the current Board – An NED appointment can provide an invaluable opportunity to bring greater diversity to your current Board, bringing fresh thinking and new perspectives.
- Appoint NEDs on specific pre-agreed terms – set and agree terms upfront such as remuneration, tenure and time commitments, to avoid misunderstandings further down the line.
- Invest in specialist non-executive search expertise – work closely with a specialist executive search team with a proven track record in non-executive recruitment. Not only will they have relevant experience and know-how, the right non-executive consultant will also invest time gaining an understanding and appreciation of your Board’s culture, personalities and other relevant subtleties.
- Look for genuine independence and integrity – The role of a non-executive director is to provide independent oversight and constructive challenge to the executive directors, safeguarding the business and shareholders. Gravitate towards candidates who clearly demonstrate integrity and a genuinely independent mindset.
- Don’t be afraid to change – Actively seek out candidates who are also motivated by change and innovation, who will help drive transformation, encourage progress and help maximise value to shareholders.
- Market test both remuneration and fees – Be cautious where remuneration is the candidate’s principle motivation.
- Broaden your options – Get creative with your thinking and widen your candidate pool. For example, hiring a CEO or CFO into their first NED role can add tremendous impetus leading to enhanced growth via specific strategic insight and knowledge.
For specialist help finding and hiring a Non-Executive Director or Non-Executive Chairperson with the mindset and skills to take your business forward, get in touch or call our senior partner Neill Fry directly on 07920 055451.