North East non executives put the X factor in businesses

What is the role of the non-executive director? The good non-executive director is an essential part of the DNA of a successful business - they can take it from bootcamp to the finals and beyond

David Clipsham is a past winner of the award
David Clipsham is a past winner of the award

What is the role of the non-executive director?

The good non-executive director is an essential part of the DNA of a successful business - they can take it from bootcamp to the finals and beyond.

NXDs, or NEDs, have a duty to add value to the enterprise, whether they are in the voluntary or private sector, whether that value is social or financial.

They represent the shareholders and play a vital role in separating the interests of shareholders and directors. This distinction can become blurred in private companies, when they are often the same people.

It is even more important in family businesses, because the roles can bring the dynamic of the family into the boardroom. The older generation may be shareholders, but they may no longer be the directors and it can be hard to relinquish that role.

Here the non-executive director needs to be able to challenge as well as support. The firm but tactful intervention of the non-executive director may make the difference between success and an inevitable decline.

A good non-executive director will use their experience to prevent mistakes and deliver value to stakeholders. When there are difficulties, and there are no shortage in today’s economic climate, the non-executive is there to bring a calm head and a dispassionate, questioning and objective perspective to the board table. The best non-executives tend to do more listening than talking.

As a business develops, it is increasingly important that it uses its non-executive directors well. They focus the board’s attention on strategic rather than operational issues making sure that robust processes are in place.

They will also take a dispassionate look at the make-up of the board. Just as a Gary Barlow is looking for a balance of sounds in his groups - not all lead singers - so a board needs to have a team of people with complementary skills and characteristics.

The mark of a good non-executive director is when the board continues to listen to him or her even when they disagree strongly.

Their opinions are valued and they are respected as a valuable sounding board.

Due to production difficulties, the full list of entrants to the Young Business Person of the Year category was omitted from yesterday’s story.

The three young people in for the award are: David Clayton, Northern Garden Sheds, Newcastle; Leanne McHugh, Love Food, Newcastle; and Luke Robertson, Wallchimp, Hartlepool.

:: Click here to find out more on the North East Business Executive of the Year Awards

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