Sound judgment and impressive decision making skills are two of the most important things that a person must posses in order to run and maintain a company or an organization. In any established companies, a non-executive director is needed to oversee its progress. They are vital for they are reputed to convey unbiased opinions to major corporate decisions and also can contribute diverse experience to the decision-making process.
If you think you have these two key virtues and skills in order to become a non-executive director, then read more to know about this esteemed job.
What is a Non Executive Director?
A non-executive director (NED, also NXD) or outside director is one of the members of a company’s board of directors. However, they are not part of the company’s executive management team. Thus making them an “outside member” of the company, meaning to say, they are not an employee of the company or affiliated with it in any other way. They contribute to the company’s success by giving an objective view of the business. Lastly, they could also improve the board’s effectiveness at relatively low cost by providing valuable business connections.
Duties of a Non Executive Director
- A non-executive director might be appointed to carry out a specialist role on a part-time basis or their expertise in specific activities, such as strategy and contract negotiation.
- Although they might only work on a part-time basis, they use their experience and expertise in order to give an independent advice and objectivity. Also, one of their tasks is to monitor the executive management of the company.
- A non-executive director must conduce to the development of a company’s strategy.
- They should be examine and scrutinize the management’s performance, making sure that they have met the agreed goals and objectives of the company. Moreover, they should monitor the management’s reporting of performance.
- Making sure that the company is financially stable is on of the duties of a non-executive director. They should ensure that accurate financial information is on hand and that financial controls and systems of risk management are strong and justifiable.
- They are also in charge of scrutinizing the right levels of an executive director’s salary. They it is also their ultimate duty to appoint and/or remove (where necessary) senior management and succession planning.
Work Condition of a Non Executive Director
Non Executive Directors usually work part time. They attend board meetings and spend time on specific projects. They could work in an office but they spend most of their time inside the board room together with all the other executives and directors of the company.
Educational Requirements of a Non Executive Director
A non-executive director is usually appointed. The routes tend to be rather different depending on whether it is a public sector appointment or whether it is for a private company. However, they must finish a Bachelor’s Degree (4 year-course) of any kind; preferably a graduate of management or business-related courses. Anyone who has a Master’s Degree or any post-graduate degree would be a plus factor.
Occupation and Progress of a Non Executive Director
A non-executive director’s position is a highly sophisticated and prestigious job. They must work with various people inside a certain company. He or she must have a very good character together with an intelligent decision-making skill because not all people can be appointed to this job. Furthermore, non-executive directors are expected to have a great responsibility over the supervision of the company’s management. Therefore, he/she must give his best in doing his job in order for him/her to progress in his craft.