The right NED fit – what to look for beyond expertise

Author: Eelco van Eijck   

If a NED candidate’s resumé is already full of current board appointments, it’s tempting to see that as assurance that they’ll perform well on yours. And it can be – the non-executive interview process brings a lot of scrutiny, and they have shown they can stand out in it multiple times.

But a portfolio full of active board roles is not necessarily a sign of an effective NED. Boards are demanding and one person’s time can only stretch so far. If a non-executive director is trying to be everywhere at once, they won’t be able to give the time they need to each role – especially if one company is in the middle of a storm.

Commitment isn’t the only concern. Even with all the time in the world, it’s not possible for someone to be an effective NED on every board. Each role will need a specific combination of expertise and experience – not to mention the right personality to work alongside the rest of the board and executives.

Amrop Executive Search Non Executive Board Blog – What To Look For Beyond Expertise

Team fit is just as important as expertise

With the complexity of the role, especially where strategic, serious business or legal matters are concerned, the emphasis for a new NED search is often on knowledge and expertise. But that means one element can get easily overlooked: how well they fit in with the rest of the board.

That doesn’t mean everyone on the supervisory board has to think the same way or be the best of friends. It just means that each NED should connect well with the people on the other side of the table, and their personality should add as much value as their experience in terms of creating an effective team.

Often the best way to assess their fit is to get to know them away from the interview table. Take your final candidates out to a factory, or have them sit in on a meeting with a supplier. The more interactive the process, the better sense you can get of how they look at and talk about your company.

One Family Office was searching for a new CFO – they interviewed six candidates, and then narrowed it down to three. The chairman of the board then asked me what they could do for the second interview to inform their final choice.

I suggested that the candidates spend the first half of the interview day touring the company’s stores with the CEO, and the other half in an interactive session with the non-executive board. That gave them a chance to better understand the business and its strategy, and the current NEDs an opportunity to see who could back up their expertise with the right personality fit for the team.

 

When you don't know what to look for

The difficulty with finding that perfect team fit is in fine-tuning what exactly the new NED needs to bring. There might be a clear knowledge gap or strategic need that informs the expertise you’re looking for. But the personality qualities that make them an effective part of the board team are harder to define.

That’s particularly true if it’s an executive leading the search. I often see executives say they know what to look for in a new NED, but in reality they don’t have an objective enough view.

It’s hard enough for an executive to find someone whose role is to analyse and ask questions that challenge their vision. And this difficulty only increases when a NED board is looking for a new chair. That person needs to exude natural leadership, set the board’s agenda, and have the maturity to handle relationships with shareholders or even family owners. To fill such a complex and sensitive role often takes the insight of outside support.

 

It takes an outside perspective

Selecting the right NED starts with selecting the right search firm. Companies don’t appoint NEDs every day, but the right search partner won’t just provide a list of names, they’ll also coach you through the process of selecting and interviewing candidates.

The company can still bring forward contenders they know already. But they should get a search firm to suggest five or six new names, and put every candidate through the exact same interview and review process.

By taking this route, you’ll have plenty of choices. One of the names suggested by the CEO might be the ideal candidate in the end. Or your search firm might find the perfect combination of knowledge, background and personality in a name you otherwise wouldn’t have considered. Either way, you’ll have done your due diligence.

Whether you need to find high calibre candidates with the right expertise and team fit, or you’re considering transitioning to a NED role, get in touch with me, Eelco van Eijck, to start bringing your way forward into focus.

 

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