There is much, and I mean, much information published about the duties and obligations of a Non-Executive Director (NED) and I encourage you to read it – especially the legal parts! If you are going to do the job you need to be informed.
All that formal and legal material is important but, for me, it does not get to the heart of the NED role and this short blog is about that.
I am standing down as a NED and Board Chair at Rise Mutual after six years. That period has brought more than a few challenges. At the outset, having separated from its major partner, Rise was in an existential crisis, generating losses not profits with the commonest advice being to merge, sell or close the business.
However, initial conversations with CEO Kuljit Sandhu showed me that here was a purpose-driven organisation with a clear identity, a CEO passionate about that purpose and a determination to succeed. Given sufficient assets to support the immediate future Kuljit and I took on the turnaround. Six years later Rise is a thriving, profitable, successful, employee-owned enterprise.
So, I thought it time to reflect, what is the role of a NED in that turnaround, what is the true scope of the role? I summarise it in five actions:
Scrutinise: intensely examine the business, understand the ‘what’ and ‘how’;
Challenge: test and explore alternatives, understand the ‘why’;
Open Doors: generate opportunities for the business to realise its potential;
Provoke: search for ‘better,’ stimulate action, experimentation, adaptation;
Enable: ensure autonomy, knowledge, insights and resources.
In my observation, and I have worked with many organisations over many years, many NEDs only get to S and C, failing to recognise the need for O, P and E and that is to let the organisation down.
If you are, or aspire to be, a NED please be sure to address the whole SCOPE.