CGF ARTICLES, OPINIONS & EDITORIALS
CGF probes for exceptional Non-Executive Director talent (2014-07-14)
February 20,
2015 3583 3583 
Advertorial by CGF Research Institute
Economic stresses and the increasing demands for responsible governance have resulted in a fundamental shift in the requirements of the role of a Non-executive Director (‘NeD’).
Today’s NeD must be more engaged, more numerate and more technically competent than ever before if they are to be equipped to succeed in a role that has become much more demanding within the context and operation of a boardroom. The ideal NeD must possess “business savvy”; have a good understanding of the organisation’s operations and indeed be judicious regarding the legal and operational risks to which the organisation is exposed. A NeD of this calibre doesn’t just arrive from nowhere; and selecting a NeD for an organisation’s board can have many unintended consequences if it is done haphazardly.
NeDs are a special breed of director
Non-executive Directors are people who are “plugged” into business; they are also “in tune” with the socio-economic developments surrounding the organisation and they offer a breadth of experience alongside a depth of knowledge which is focussed upon profitable and sustained growth. Unlike their executive director counterparts who are the full time employees of an organisation, because NeDs only participate in the organisation’s boardroom and board committees a few times a year, they really do need a “sixth sense” when engaging the board and the executive directors. Time and again, NeDs are not always provided the necessary (or timeous) information from their boards or the Company Secretariat pertaining various business matters in order to consistently make fully informed decisions to benefit the organisation.
Yet in spite of this lack of information -- which is compounded by the fact that NeDs do not at the best of times have direct access to the resources in order to obtain such information -- they are still expected to meaningfully contribute to the discussions and be part of the critical decision making processes of the board. Expectedly, this is risky business and a NeD must be prepared to accept (and manage) their personal, as well as the collective risks and liabilities associated with this function.
An experienced NeD will also need a “finely tuned eye and ear”, as they apply their refined communication skills to work so that the organisation stands to benefit from their business acumen and market-related experience. Of course, it’s entirely understood that a worthy NeD will devote their time and attention to the organisation as they commit themselves to the increasing range of responsibilities.
Matching the requirements
Finding the right NeD can prove to be quite challenging, not least the fact that they should also be a ‘good fit’ for the board as a whole. The right person will have a strong and lengthy track record in a particular market sector, or in one which presents a good opportunity for business synergy and knowledge transfer into the organisation. They’ve got to be available for the part-time commitment required, and willing to take on the issues and challenges facing the organisation. At the same time, NeDs of calibre will be able to “think on their feet” so to speak, and they must be able to present solutions for the challenges they are presented, as opposed to adding to the organisation’s complexities. In the words of Jim Leng, a former Chairman of the Corus Group, he bluntly stated in respect of Non-executive Directors that “the day of the gifted amateur has long gone.” Whilst finding an appropriately qualified NeD is a challenge in itself, the task can be further complicated when trying to find NeDs who will also have the “right chemistry” to suit the existing board and its members. Considering that NeDs are expected to -- amongst other -- bring with them fresh business ideas to invigorate the thinking of the board, and ask challenging, often difficult questions on behalf of shareholders, an overly zealous NeD can inadvertently cause more damage than good, particularly if the existing board is traditionally subdued in its routine and activities.
