To be a successful non-executive director (NED), you should possess certain abilities. You should have strong leadership skills, a talent for critical thinking, and the ability to collaborate in decision-making. While these are the standard expectations for a solid NED, other, less-common qualities level up your desirability in the boardroom.
Grappling with Information
Getting to grips with vital information as quickly as possible is the only way to be effective. Many boards are simply overloaded with information. Non-executive directors must tackle badly drafted, long-winded board papers. While it is sensible to approach this first, for reasons addressed in our New World Board Pack, it’s crucial not to skim and select. Instead, ensure that you are comfortable with the information being presented. Whilst boards are there to analyse information, their key job is to make decisions. As a non-executive director, you must learn quickly to cut through the cacophony of data in order to reach the heart of the issues.
Understanding Finances
Good or bad, volatile or stable, every world-class NED must have a firm handle on the business’s finances. To perform your responsibilities as a non-executive director, you should, as a minimum, have the ability to read and thoroughly understand the business balance sheet and the banking arrangements of the organisation. fds delivers Finance Demystified, a director-level training course specifically designed to equip you with the essential financial knowledge needed to excel in your role.
Engage with Employees
In order to be a relatable and knowledgeable non-executive director, you should get to know the people in the company. Having a sense of visibility and availability will benefit the employees and you when undertaking your duties, as you will have a greater sense of what progress needs to be made. You should make an effort to be engaging and interested in the company and its people.
Establish Board Cohesion
Many boards do not sustain board cohesion due to certain NEDs not adequately fulfilling their responsibilities, this is especially true for boards that have a dominant shareholder director. As a NED, this can be a difficult situation to challenge. This can be more complicated if family is concerned, but any board is only as good as its weakest link.
Adopt a Direct Approach
A trait often found in determined people is directness. In the boardroom, assuming a direct approach can move a discussion on by addressing a problem and immediately adopting a strategy to remedy it. However, do not mistake bluntness for being unkind. Remaining open and approachable is crucial to strong leadership. Making a conscious effort not to offend a fellow board member needlessly can still be done while effectively getting straight to the point in meetings where time is of the essence.
Take Initiative
The more responsible and competent board members are, the greater the board will be as a whole. The role of NEDs in business growth requires a strong mind and unique outlook. A world-class board needs to be dynamic in every sense of the word, embracing diversity and strength of character. These are the people who make world-class directors.
Maintain a Strong Position
On a board, individuals who have a fickle personality add an element of inconsistency to the room. Whilst an effective NED should have an open mind, board members who are undependable and disloyal do not demonstrate the necessary strong-minded qualities. It becomes the responsibility of the other board members to interact with these individuals using advanced interpersonal skills to comprehend their opinions truly. Therefore, it is wise to proceed with caution if you encounter such a person on any board you participate in.
Embrace Humour
A sense of humour is a massively underrated skill in the non-executive director’s toolbox. Used appropriately, it can diffuse many challenging situations. NED responsibilities require serious effort and many topics that arise can be difficult to navigate. However, it is important to inject an element of fun to keep the boardroom energetic with lively conversation.
In Summary
In conclusion, while every NED should be prepared to possess the obvious leadership qualities, there are many unique and uncommon qualities that can greatly enhance one’s appeal in the boardroom.
Understanding the role of NEDs in business, and particularly what it takes to be a great one, is no simple feat. We have created a New World Board Pack designed to assist you in your journey to become a world-class NED.