A Non-Executive Director (NED) is for many companies, a fast-track to commercial insight, clever connections and strategic analysis. For large companies, the NED role involves corporate governance, executive monitoring and strategic support. For smaller companies, the Non-Executive Director role is more involved.

Some companies may be too small to employ or afford a full time Executive Director and therefore the appointment of a Non Executive Director can broaden and supplement the board’s experience and skill set in a fairly cost effective way. Start-ups also benefit from the objective challenge and strategic advice that a Non-Executive Director brings. For many companies seeking funding, regardless of size, a condition set by many lenders or external investors is to appoint a Non-Executive Director.

Ideally, a non-executive director (NED, Non Exec or NXD) is a board member who is not part of an executive management team, and is not an employee or affiliated with the company in any other way. However, they provide key, independent support in the areas of strategy, risk, performance and people to client companies. Venture Capitalists often require a “safe pair of hands” that will give them the comfort that the business in which they have invested is performing according to the business plan and that the management’s strategy is working. There are occasions when there is doubt about the accuracy of the results, the ability of the management, or that the promised results and cash flow will be delivered.