The Non-Executive Director | 5 ways to prepare now for a future NED role

Author: Eelco van Eijck  

As I explored in my last article, becoming a NED is not always a natural transition for a leader. Many C-suite leaders apply for NED roles and are rejected. They’re experienced, they might have a great reputation, but they haven’t recognized just how different life on a non-executive board will be – and so they haven’t done the necessary preparation.

That preparation needs to start early. Ideally when you’re aged 35-40, you should already know whether you’re aiming for a non-executive board in the latter stages of your career. Of course, when you’re in the middle of operational roles, it’s often hard to think this far ahead. But if you’re going to give yourself the best chance of success, you need to prepare as early as you can.

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1. Recognize it's not going to be easy

Learning to be a good NED is like learning to drive with your hands cuffed. It’s a very different experience to being in an operational leadership role, where you have the freedom to take direct action yourself. 

It’s also important to know that you’re not preparing for a comfortable semi-retirement here. Of course, there are often periods where not much is demanded of a non-executive board. But although there are troughs of activity there are also peaks, and these can be all consuming.

For instance, I know one company that was in the middle of an acquisition when the CEO died unexpectedly, overnight. The company still needed to run, a replacement needed to be found, and the non-executive board were on call continuously for weeks. Luckily, they found a new CEO quickly, but no doubt the NED’s endured a lot in the process. 

2. Take initiative among senior leaders 

This kind of work requires a different approach, and the sooner you can learn that approach the better.

If you’re a younger leader, you may be able to take advantage of reverse mentoring schemes, which can expose you early to high level leaders and how they operate. If you get the chance to do this with an NED, or even sit on non-exec boards so you can advise on developments in the younger generation, you will gain invaluable insight into how non-executives think and act.

However, if you spend your time waiting for an opportunity here, you might wait forever. You might need to look beyond your own company.

Take opportunities to share your expertise elsewhere, and one thing might lead to another. You could be speaking at a seminar, and if non-executives are attending, try to connect with some of them and offer your help as an outsider from another generation. Any interaction you have with senior experienced NEB directors will be vital learning.

3. Join a board 

The widely given advice to aspiring NED’s is to join a board of governors, often at a school, sports society or NGO. While it’s not quite the direct route to non-executive boards that it once was, it’s still a very valuable way to step up and gain relevant experience. 

I would encourage you to get creative with the type of board you join, however. It does not have to be a school governor board; it could intertwine naturally with the hobbies you already take an interest in. For instance, I know one CEO who was a non-executive in the dog breeding business. Or take the Managing Director of Iceland Foods, who is a Trustee of no fewer than three charitable groups, including Surfers Against Sewage.

It’s important to gravitate towards what gives you pleasure while developing your NED skills, if only for the sake of balance. Leaders, executives and non-executives all need an outlet beyond work, a valve that gets the tension out of your mind and body. Too many end up too stressed to keep on, but it’s the ones who develop balance that are the long-term survivors that make it to the non-executive board.

4. Join a NED development program

While you may study an MBA to prepare for an operational role, no education short of an NED development program will prepare you for the problems you might face on the non-executive board.

These programs are focused on compliance, shareholders, managing crisis, and the workshops will guide you through a number of real-world case studies so you can learn from how other NED’s have responded to these issues. Nothing is off the table here – product recalls, sexual harassment on a management level, hostile takeovers and threats – it’s all part of the remit of an NED, and these development courses can help prepare you for the worst.

I advise you to begin one of these development programs after you have spent a year or two in a C-suite role. Partly it will prepare you for an NED future, but it will also be priceless preparation for anything that might come your way sooner. It’s never too early to gain an understanding of governance, application of the law, shareholder representatives, and how the non-exec board is operating. 

With this training under your belt, you’ll be able to communicate better with your non-executive board too, particularly in moments of contention. If a non-executive says that a shareholder – perhaps a Family Office – wants to sell the company, and this is at odds with the desires of the executive board, you’ll have a better grasp of what is going on and how you can respond.

5. Become a professional NED

Now there are opportunities to pursue a NED role sooner, even turn it into an alternative career. There are however limits to the number of public boards you can sit on, but with private equity companies, you can sit on three or four boards quite reasonably. Although even at PE’s there is a tendency to restrict the number of seats due to focus, availability and commitment. 

Sometimes leaders may choose this early transition because it enables them to have a better work-life balance. However, this route may be no less challenging than the operational path up through the C-suite, particularly if you’re dealing with private equity mergers and acquisitions. 

However, in general I would caution against this option. The ideal nonexecutive has at one time been an executive, and if you’d like to know why, I’d recommend reading my article: when is the right time to become an NED? 

If you are serious about preparing to pursue a non-executive career, get in touch with me to help bring your way forward into focus. 

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