The 5 essential qualities of a non-executive director

It is a given that most organisations want non-executive directors (NEDs) with financial acumen and a commercial track record. NEDs need to be comfortable with the balance sheet and profit and loss accounts and it is essential that they are familiar with the key financial drivers of an organisation. However, the role is far broader than that. There are five core qualities that companies look for when appointing a non-executive director to add value to their boards.

1. Big picture thinker

Although it is the executive team that propose strategy to the board, NEDs need to be strategic thinkers with the critical evaluation skills to challenge and contribute to it. They must be able to get to the heart of an issue quickly by asking pertinent questions. They also need to read and, at times request, key performance measures that will give the big picture without diving into the detail.

2. Governance knowledge

An understanding of governance is essential for a NED. It is key to appreciating the legal and regulatory framework that the organisation operates within and the responsibilities and liabilities of directors. Knowing what good governance looks like, with a clear appreciation of the roles and responsibilities of the board, also enables a NED to better shape and support the board.

3. Independent mindset

Boards want NEDs who can be objective and take a view that is focused on the longer-term success of the organisation. They need to be able to set aside any personal issues, short-term considerations and personal preferences in their consideration of the options. An independent mindset also helps NEDs to maintain integrity and to advocate for the right thing, not the most expedient.

4. Ambassador potential

All directors are ambassadors for their organisation, and NEDs have a very outward focus. It is essential that NEDs can represent their organisation to shareholders, stakeholders, regulators, government departments that may have an interest, and in some cases to the general public and media.

5. Energy and commitment

The role of a NED can be demanding. NEDs need to have the time to understand their organisation, its market and regulatory environment, competitors and challenges, and keep up-to-date to stay on top of the brief. They also need the energy and resilience to fulfil the role, especially when the going gets tough so that the board can work effectively through difficult circumstances.

The Chartered Governance Institute UK & Ireland provides a range of support and development services for NEDs. These include books, guidance materials and a one-day development programme aimed at new NEDs, and those seeking a deeper understanding of the role.

Visit the Directors’ Duties resource centre to discover how we can support your NED career.