For many CFOs, taking on a non-executive director (NED) role is widely considered the logical next step in their career.
Melanie Clark, Principal Consultant Executive Search at Robert Walters, spoke with Ashley Martin to get some insight and advice into the journey to becoming and holding a position as a non-executive director.
Ashley currently holds NED positions at YouGov PLC, and Zegona Communications PLC, and for nine years previously was a non-executive director and audit chair for Rightmove PLC.
What type of NED role?
Breaking through into the non-executive world and achieving the first post can be a challenge, but there are a number of steps you can take to enhance the possibility of getting that all important first NED role. The first thing to consider is exactly what sort of NED role it is that you are seeking - a PLC role, a NED with a PE backed investee business, a Public Sector NED role or Not for Profit organisation, amongst others.
To this day, many organisations and most PLCs go through the traditional route to finding a NED through the board practices of the major search firms. Some new online search businesses have recently entered the market and it is worth registering with these but on the whole the process to being selected and interviewed for a NED position has stayed relatively the same.
Establish, first of all, the skills you can bring to a NED role and the sectors in which you have a solid or thorough understanding. I first went about the process during my executive career as I felt a NED audit chair role would bring a different perspective to my PLC CFO experience. It would also be a good base from which to build a plural career at some future point. Realistically though, you can only do one NED role whilst a full time PLC Exec director.
I started by reaching out to all of the major search firms that I already had an existing relationship with and asked them to introduce me to their board practices. I also made my own wider network aware that I was seeking my first NED position and updated my LinkedIn profile accordingly. In parallel with this I created a bespoke CV, specifically geared towards a non-exec role.
Ensure that your relevant experience and skills are clearly described in your CV, and use examples to highlight your independence of mind, judgement, and ability to be objective and challenge. A NED is also expected to be self-confident (without being dogmatic), as well as a good communicator and listener – all of which you will have the opportunity to get across during the interview period.
Have an open and honest conversation with the search executives about what you can bring, your expectations and the type of organisation you could benefit. Stay true to yourself and your personality – board’s have a very clear idea of the type of character they are looking for and, as such, the search firm exec needs to know a lot about who it is they are putting forward for a role.
Be patient! The journey to your first NED role can be long and winding. When I first started out on this journey it was six months until I heard anything back.
- Be clear about what NED role you want and why - there are different skill sets required for PLC’s, Private Equity, not-for-profits and public sector organisations
- Get in touch with the search firms every six months to remind them that you are still on the radar and looking for a NED position
- And when you do get offered an opportunity, do your own due diligence. Check whether the requirements of the role and cultural fit would be right for you – after all it is your reputation on the line too!
- Don’t do it for the money, as it often doesn’t balance out the risk
Reality of the role
My first NED role was with Rightmove PLC, over 9 years ago now, when the company was significantly less well known than it is now. The company was seeking a chair for its audit committee and were looking for a currently practising PLC CFO. My CFO experience within both the media and property sectors, as well as the entrepreneurial nature of the organisations in which I had worked were a good match with the Company.
Now I can honestly say that no one ‘teaches’ you to be an audit chair or indeed a CFO. Your ability, knowledge and skillset tend to manifest overtime through your own experiences and observations of others. You take this insight and apply it in your own way. There are however a number of NED courses run by the accounting firms, lawyers or the professional bodies which can all help in making that transition to being an effective NED.
In essence the role of a NED is to ensure the business is properly governed in the interests of all stakeholders by providing independent oversight and constructive challenge to the executive directors. This can include, inter alia, assessing the company's strategy, overseeing performance and risk management, policymaking and compliance with Governance and other regulations. A non-exec is not involved in the detail of day-to-day operations.
- Spend a lot of time understanding how the business works, the value drivers, the risks and the market overall
- Get meetings in the diary with key employees. All of this knowledge will give a good background and will help you be effective in the boardroom
- A new NED can bring a fresh perspective. More often than not the ‘dumb’ questions aren’t actually that – so don’t be afraid to ask!
- Do a lot of listening and ‘listen with your eyes.’ The crux of an issue or problem can sometimes be identified by closely analysing how a matter is conveyed
Making the most of it
As a NED it is not uncommon to hold similar positions in a variety of companies and, for me, it is perhaps one of the appealing aspects of a portfolio career.
The first NED role will invariably set the tone for the rest, so it's important that you get this right from the off. In fact, whilst it might seem premature at the time, it’s a conversation you should have with your search firm exec right at the very start of your journey. Search executives place and advise individuals at the very beginning of their NED journey, as well as those who have a portfolio career, and so don’t be quick to underestimate what valuable advice or insight they may have for you.
Many NEDs will find that once they have that first board level role under their belt, they can access further non-executive opportunities more easily. They are more firmly on the radar of organisations seeking new board members as well as other interim or portfolio work. For me, being the audit chair of a fast-growing and well-known company such as Righmove meant that I got more calls about NED opportunities once I had stopped full time working and had embarked on a portfolio career.
You need however to consider your subsequent NED position very carefully. Choosing companies or sectors that compliment each other, or perhaps have similar characteristics can be very helpful. For example, Rightmove, now a FTSE 100 company, operates in the media sector but with a property vertical and tech/data focus. YouGov, listed on the AIM market is also in the media sector but focussed on data analytics and research. Again, technology is a key part of the story. And Zegona Communications is a telecommunications business but operating a PE model in a PLC listed environment. Whilst all of these companies compliment each in terms of sector and style of operations, none are in direct competition with each other and therefore provide me with the opportunity to bring shared learnings with no conflict of interest.
My final point for those looking to take on more than one NED position is to be realistic about your time commitments. There is a lot of work to be undertaken outside of the boardroom as there is within it if you are to be effective. And for any business that undergoes any sort of crisis, time required can escalate very quickly so leave plenty of capacity within you own schedule to cater for this.