John Leach, chief executive of Winning Pitch, details the qualities to look for in finding a non-executive director that adds genuine value to the business.
Most business owners will recognise the vital role that non-executive directors play in supporting business growth. In recent months, the ambitious entrepreneurs we support seem to be asking more and more, ‘what should we be looking for in a non-executive director?’.
Apart from the clearly obvious of, can we work together? Do we like each other? There has to be more to the relationship than a regular meeting followed by an invoice. Having been doing what I do for the past 25 years, I have seen so many individuals picking up non-exec director (NED) roles because it fuels the ego and becomes a great thing to talk about with friends and peers.
Many of my peer group who have engaged NEDs often end up referring to them as professional sausage roll munchers who merely turn up for lunch and offer no added value. Care is an important attribute when looking for a NED. Will they be bothered?
Will they listen and can they genuinely empathise with the journey I am on? Having reflected on the hundreds of businesses we have worked with over the years and who have engaged and made best use of their elite advisers, the ‘best in class’ NEDs would appear to pass the G.I.C.C test. Over and above care, likeability and trust, they also bring with them:
Governance: This is the ability to ensure order and good housekeeping is brought into business practices. Regular board meetings, financial compliance, risk registers, legal obligations and many of the issues that constitute a well-run business. This is the downfall of many entrepreneurial businesses particularly when they are talking to funders or investors. A good NED will ensure that all statutory obligations are met. A well-run business sends out a massively positive message to funders.
Insight: This comes in many different forms and needs to be directly related to the growth journey the business has embarked upon. This insight could be fundraising, markets and customers, organisational or personal development for the inexperienced entrepreneur keen to transition through the stages of growth.
Connectivity: This for me this is where many NEDs fall short of the mark. Opening their ‘black book’ of contacts – whether this is potential customers, investors or advisers – for me is such a critical part of the role. In my experience, few are willing to share their network. Many entrepreneurs are often looking for trusted advice and connection to networks that will propel their business performance to the next level.
Challenge: A good NED should ensure the management team is executing the agreed strategy and plan. Openness and honesty are essential ingredients of a relationship and any NED worth their salt should challenge senior managers on performance against plan.
The role ranges from acting like a loving mother/father to being a tough task master and everything in between. The NEDs I have worked with and who embrace the G.I.C.C way of doing things make a positive contribution and a life changing impact for ambitious entrepreneurs and their shareholders.
Boost Business Lancashire has a wide range of support programmes available for businesses looking to grow. To discuss any of these programmes further, contact us on 0800 488 0057.
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