I’m over-simplifying (a bit), but it was not the hardest way of earning your
salary. As a result, it was often a wonderful role for the ‘great and good’, and
not necessarily for an executive director.
How the world has changed – and rightly so. The role of the NED has come
under substantial scrutiny and expectations have been raised. Executive
management has always been tasked with leading a business, and main board
directors make the decisions that move the organisation forward, or not.
However, the NEDs around the table have a duty to support that board and, in
doing so, to debate critical decisions.
Currently, for the finance community, one of the key issues is that many of
the audit committee chairs are now FDs – one of the key changes post-Higgs. This
is both a tremendous opportunity and a responsibility. Becoming an NED is good
for your career. It increases your knowledge and your network, and much like the
poacher/gamekeeper analogy, it helps develop you as an executive board member.
And yet, one of the toughest roles around the table is to chair the audit
committee. On the basis that you will most likely be a senior finance
professional, you will have two audit committees to worry about; the NED one and
your executive one.
Reputational risk, workload, scrutiny and governance combine to make this an
interesting, yet onerous challenge. Audit chairs can be forgiven for asking
whether the role justifies the effort and exposure.
Most of them will answer yes. Of course, the time-commitments are hard, and
you will lose some weekends. And, of course, the money currently on offer for an
NED role does not match the workload or the reputational risk. However, the
chance to work alongside another group of talented, passionate individuals and
to see how they manage their business and their board is valuable both to you
and to the business for which you work. It gives you main board exposure, which
is extremely helpful if your day-job does not put you on your employer’s board.
In some instances, NED experience has been a key factor in finance directors’
So, much work for not much money, but with huge satisfaction for a job well
done and value to your business. In short, time well invested.
Mark Freebairn is a partner at Odgers Ray & Berndtson
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