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In the highly competitive digital era, boards have to be high-performing just like their frontline teams. They need to be diverse and able to offer a range of perspectives if they are to be effective. And they need to be challenging as well as supportive to ensure robust corporate governance. Non-executive directors (NEDs) are crucial to board effectiveness and can also bring a much-needed diversity of experience, skills, age and gender.
A great deal has been written about the changing face of the NED. The average age is now below 60 and reportedly more than one-third of non-executives are women. We are also seeing the rise of the digital NED or D-NED as they are sometimes called who can help organisations implement their digital transformation strategies.
Indeed, in a forthcoming report by Rialto Consultancy on board effectiveness, we examine how digital NEDs are helping organisations answer some of the pressing questions that digital transformation and disruption brings: how big is the digital opportunity? How should boards and leadership teams adequately prepare for and exploit opportunities from digital? And what are the necessary characteristics required to create a digital-savvy board?
NEDs, like the boardroom itself, are coming under closer scrutiny, especially when it comes to their corporate governance role. Interestingly, the Non-Executive Directors’ Association (NEDA) will hold its annual debate next month with the motion: “This house believes that NEDs are failing to hold the executive to account.” According to NEDA, the debate will question whether NEDs are doing enough in the current climate “to positively challenge and engage with the executive team”.
Without doubt, the NED tier is ever more important in today’s high-pressure and fast-moving operating environment and as such, it can bring a fresh and exciting challenge for individuals who have reached a certain stage of their career. Perhaps you wish to build a portfolio career or maybe it is time to scale down from a full-time executive role.
It is not an end-of-line role though and can help individuals to broaden their horizons and gain valuable experience for a future position. A non-executive directorship also offers scope to transfer knowledge into your own organisation, which is particularly valuable in the current climate of ecosystems and strategic partnership working.
Finding that first non-executive position can prove difficult. Rialto Consultancy has worked with numerous individuals to help them secure non-executive directorships and our advice is always to consider the type of organisation and sector where your experience, skills as well as your leadership style will have most relevance.
Where will you be perceived as an asset? Having found the right organisation, it is important to carry out your own due diligence and research on the company and its board members. Assess what marks you out against them so you can identify the contribution you can make.
We believe the best NEDs are those that bring a blend of skills such as influencing, active listening, insight and vision, combined with excellent powers of judgement and, crucially, specific areas of expertise and specialist knowledge. They also understand that this is not a role to ruthlessly fulfil their ambitions but to work alongside others to achieve a set of goals.
Organisations need great talent in their boardrooms, just as they do at every level. So the burning question for any aspiring NED is: who is it that needs you most?
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