Do you need an NXD?

I find my roles and responsibilities as an NXD enormously satisfying, interesting and rewarding. I think three words sum up quite well an NXD’s ideal contribution; advice, support and insistence. Having spent twenty seven years in a variety of industries it is fascinating trying to distil all that experience down to the ‘drops’ of advice and support. Combine this with the, where necessary, insistence on a particular course of action and you characterise the contribution that a good NXD can make.

It is highly probable that one has seen a particular set of circumstances before and, as events repeat themselves, the ability to volunteer helpful advice in a cogent, relevant and hopefully tactful manner is key to success as an NXD. I see a contrast here between the new executive recruit whose constant references to ‘the way we used to do things at so-and-so’ can become rather tedious, and the NXD who can get away with this style of delivery – that’s what one is there for!

Support can be delivered in many forms – ranging from a well-timed phone call during tough periods to vigorous, formal, and minuted support in board meetings. On occasion one may call the Chairperson to volunteer support for a particular executive or course of action; the Chairperson may be too close to the action and will welcome a ‘big-picture’, slightly more detached view of events.

I also feel that balance and perspective can be one’s greatest contribution as an NXD, as exemplified perhaps by the need to keep one’s written documentary review responses relatively brief and succinct, (you’re not being employed to spot typos), and to avoid the temptation in board meetings to make so-called ‘motherhood and apple pie’ suggestions, with which nobody could possibly take issue, but which may be designed solely to ensure the presence in the minutes of a suitably sage comment next to one’s name!

Finally, and at the risk of stating the obvious, knowing where the line should be drawn between non-executive and executive behaviour is key.

Upon Joining a board a newly appointed NXD should familiarise themselves with the industry relating to the company’s products, and definitely study the company website and those of the competition.  The latest annual report, press reports, (Google the company and its senior people) should be on the essential reading list. Familiarity with relevant regulatory requirements is important for example, the new Senior Manager Regime in financial services.

The latest internal strategy documents, and management information on current trading are also a must and finally, ensure the board is operating within its constitution and  check that appropriate Directors’ and Officers’ insurance is in place.