What do Boards really want from an NXD?

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The term Non-Executive Director is one that we are all familiar with, whether you have one sitting on your board, are considering appointing one to your business, or would like to investigate the possibility of developing a Non-Exec portfolio as the next step in your own career.

But what do we really mean when we talk about the role of the NXD?

The legislation and guidelines that apply to the role focus heavily on the importance of governance and compliance and, rightly, there is significant liability attached to the role if things go wrong. In a listed organization or where shareholders / investors have appointed a Non-Exec with the governance remit in mind, responsibility and accountably in this regards are clearly understood.

This said, stakeholders who are seeking to add an NXD to their board are often looking for something quite different to that which the legislation and formal guidelines suggest. Indeed, CEOs and their management teams are more often looking for a ‘critical friend’ with a skill or network that will help them achieve their more strategic objectives, such as raising funds or opening doors to new markets. The lines between Non-Exec and Exec can blur quite quickly with expectations around accountability and output becoming hazy as this happens.

Looking at it from the candidates’ perspective, people seeking a Non-Exec portfolio are often looking for opportunity to pass on their wisdom and to help organisations achieve their goals, mentoring and advising being primary motivators. It is perhaps a rarer candidate who relishes the purely governance focussed aspects of the role.

At Livingston James we know that appointing the right NXD can have significant impact on a business, increasing its robustness, both operationally and strategically, as well as reducing boardroom tensions, and improving results and savings. However, with such a diversity of understanding of what the NXD role should comprise, it is essential that we work to clarify what we mean when we refer to appointing, or indeed becoming, an NXD.

To play our part in progressing this discussion, in partnership with the Scottish Investment Bank, we are hosting an expert panel on Thursday 14th September to discuss the practical realities as they relate to the text book theory of what it means to be an NXD.

Entitled ‘Realising Your Board Potential’, an intimate audience will hear the views and engage in discussion with a panel that includes: Kevin Lyon; former MD of 3i, Company Chairman and NXD at over 20 companies, David Ovens; COO at Archangel Investors, serial investor and board member, Martin Hanchard; former US CEO of Pirelli and more recently CEO of Brandrex, and Theresa Shearer; CEO of ENABLE Scotland, and trustee of SCVO and Impact Arts.

We look forward to sharing the results of these discussions with you in the near future, taking us closer to clarifying and redefining the role of the NXD.

To find out more about this event or about Livingston James, contact Jamie Livingston at [email protected]

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