IDsquared

Absolutely not!  There is much written in the press about the role that should be played by Non-Executive Directors and Chairmen.  Often this focusses on corporate governance and it is usually motivated by a topical scandal or some new legislation.  Corporate governance is an important aspect of any Director’s responsibilities and non-executive Board members are usually well placed to ensure other Directors are giving it appropriate attention.  Of course, a small company can’t afford to have a non-executive Board member purely to play the role of watchdog.  (You may be interested to read our article on NED remuneration.)

Every member of any Board must play their part in driving the company forward, acheiving the day-to-day and strategic goals set by Board as a whole.  In any case, many smaller companies’ shareholders already sit on their Boards and therefore don’t require quite the same level of protection from non-executive Board members. 

Looking at it from the Non-Exec Director’s perspective, it’s unusual for a small company to be capable of paying the kinds of fees that Non-Executive Directors can earn elsewhere.  If the role is not fun (and fun usually means adding real value and seeing real results) then they won’t take the fee just to sit in watch over other Board members.

An incoming Non-Executive Director will expect and want to be a full member of the team and the executive Board members should take every opportunity to use their skills and experience to the benefit of the business.  If you would like to discuss how this can best be acheived, do give us a call.