A few years ago, someone told me a joke that still lingers:
Q: Why is a non-executive director like a bidet?
A: No one really knows what it’s for – but it adds a touch of class.
It might make you chuckle, or roll your eyes. Either way, it reflects a common misunderstanding about what non-executive directors (NEDs) actually do. And with dated articles still floating around portraying the NED role as a semi-retirement gig or an easy income stream for former executives, it’s little wonder the perception persists.
But the world – and the boardroom – is changing.
What is a Non-Executive Director?
A non-executive director sits on the board of an organisation (public, private, or not-for-profit) without being involved in day-to-day operations. They provide independent oversight, strategic input, and governance – and their legal responsibilities are identical to those of their executive counterparts.
Under Section 172 of the Companies Act 2006, NEDs must act in the best interests of the organisation. This includes consideration of:
Long-term impact of decisions
Employee interests
Customer and supplier relationships
Environmental and community impact
Organisational reputation
Fair treatment of stakeholders
This isn’t just box-ticking. In 2024, the FRC’s revised UK Corporate Governance Code placed even greater emphasis on corporate purpose, culture, and sustainability. Today’s NEDs are expected to help drive these forward – not just observe from the sidelines.
The Evolving NED Role
The UK Corporate Governance Code recommends that at least half the board of a listed company be made up of independent NEDs. These individuals serve as “critical friends” – offering challenge, scrutiny, and perspective that’s distinct from those immersed in the day-to-day running of the organisation.
That challenge now covers a wide remit, including:
Sustainability and ESG: With ESG factors high on investor and stakeholder agendas, NEDs are often expected to ask tough questions about net zero targets, carbon disclosures, and social impact.
AI and digital oversight: Boards are grappling with digital transformation and ethical AI adoption. NEDs with tech literacy are increasingly in demand.
Diversity and inclusion: From board composition to company-wide practices, NEDs play a crucial role in ensuring inclusion isn’t a tick-box exercise but part of the strategic DNA.
Culture and wellbeing: With mental health and hybrid working now firmly on the board agenda, NEDs bring external perspective on organisational culture and employee engagement.
Why Appoint a NED?
Done right, appointing a NED offers a host of advantages:
Independence and Objectivity
With no executive function or day-to-day involvement, NEDs maintain a wide-angle lens. They can assess performance, culture, and risk with minimal bias.Breadth of Experience
Today’s NEDs come from increasingly diverse backgrounds – not just ex-CEOs or CFOs. Legal, HR, digital, sustainability and customer experience experts are all in demand. According to a 2024 report by Spencer Stuart, 38% of new NED came from different industries.Connections and Credibility
A good NED brings networks that open doors. But beyond that, they bring a track record that enhances the board’s credibility with regulators, investors, and the public.Strategic Contribution
The average NED commits 20–30 days per year, but their value extends beyond attendance. They help challenge assumptions, stress-test strategy, and guide ethical decision-making.
Rethinking Who Becomes a NED
The stereotypical NED – silver-haired, well-networked, and semi-retired – is giving way to a new profile. Yes, experience still matters. But what boards now seek is fresh insight, cognitive diversity, and digital fluency.
Gone are the days when board experience was a prerequisite. Programmes like the FTSE Women Leaders Review and Board Apprentice have helped widen access to underrepresented candidates. And the FRC’s 2024 report urges boards to view non-executive appointments through the lens of skills, not titles.
Age is no longer the defining factor. Nor is sector. The question is: What do you bring that we don’t already have?
Want to Learn More?
If you’re considering a NED role or seeking to understand how to work more effectively with your board, check out our Effective Director workshop – a one-day session designed to demystify board governance and sharpen your strategic input.
The Boardroom Effectiveness Company offers a wide range of training, coaching and consultancy services aimed at helping boards be more effective. Take a look at our full range of services or give us a call at 01582 463465 – we’re always happy to help.
