While there are several roles that Non-Executive Directors (NEDs) fulfil in the Boardroom, their primary role is to improve the board by providing an independent, objective and dispassionate view of both the board and the organisation – ultimately providing strategic insight.
While there are several roles that Non-Executive Directors (NEDs) fulfil in the Boardroom, their primary role is to improve the board by providing an independent, objective and dispassionate view of both the board and the organisation – ultimately providing strategic insight. Often, they are selected to provide oversight in their particular area of specialisation. However, due to the nature of their role, they are entrusted with the responsibility of providing insight and making tough decisions on a broad range of matters that may lie outside their area of technical specialisation. In addition, their concerns are strategic in nature, requiring a holistic view of the issues under consideration. They should ostensibly be adept at looking at issues from a range of perspectives so that they can make tough decisions that might not always be to everyone’s satisfaction, while at the same time managing the risks to the organisation. Consequently, the information presented to them needs to be contextualised and should always highlight the expected impact of the decision on the organisation and its stakeholders.
Non-Executive Directors also fulfil a range of functions within the governance framework, as they chair and serve on Board committees that are delegated to guide and advise the Board on specific matters. Therefore, it is useful to be aware of the role of individual NEDs when exercising their fiduciary responsibilities, in such Board committees (especially the Chairs), since this awareness provides an indication of their likely orientation and perspective when addressing a matter being presented to the Board.
It’s important to remember that NEDs are also individuals with their own range of interests, personal preferences, backgrounds, and experiences, all of which influence their thinking and decision-making, whether consciously and subconsciously. In addition, they have arrived at their position due to a recruitment process involving various company stakeholders whose interests they may feel obligated to pursue. All these factors need to be considered when assessing their role, influence, and independence.
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Written by: Joy-Marie Lawrence, your Coach in the Boardroom
A seasoned Board Director, Independent Non-Executive Board Director, and Boardroom Coach
The Founder of Boardvisory