Serving as a non-executive director (“NED”) can be a rewarding complementary role for an executive, or a career in itself if you choose a portfolio approach. It can add variety to your work, enhance your network and status, develop your skills and more – not to mention the considerable benefits you can bring to the companies you work with.
There are numerous routes you can take towards becoming a NED. To provide guidance and best learnings about this career path, we’ve put together a series of interviews with expert NEDs.
In the fifth instalment of our NED series, we spoke with experienced Chairman, NED and CEO, Roger Flynn, about his NED journey and what advice he would give to those just starting out.
I’d reached a crossroads in my career, as I think a lot of executives do, and I was staring down a choice: do I take another CEO role, or do I go portfolio? Then an opportunity came up with a founder-led business in the travel industry. It had great potential, and that really decided it for me. Since then I’ve mainly been involved with businesses in media, travel and technology – the sectors in which I’ve got the deepest knowledge and experience – that are either founder-led or private equity-backed. I purposefully haven’t gone anywhere near public markets or public companies.
Part of the appeal of going down the portfolio route was that, to a certain extent, I’d have more control over how I spend my time. With a big corporate, you get what’s around you, but with founder-built businesses who are looking to go to private equity, or who are already backed by private equity and want to further accelerate and grow their businesses, there are huge opportunities for excitement and fun. People want your advice, experience and guidance. You feel like you’re contributing fully.
In those early days, I spent time defining what I was good at and where I should focus my skills. I also did consulting work and worked with a corporate finance house to really deepen my knowledge of what it’s like to raise money and look at due diligence from a private equity point of view. All of that stimulated and expanded my network, which actually resulted in me finding my second role.
I talked to head-hunters and had meetings with private equity companies as well, but they weren’t as useful at that initial stage. You see, head-hunters are great once you have the experience, but until then, you’re not a known quantity. It would be a risk for them to put you in front of a client until you’ve proved yourself. Your network is your most important asset in the beginning, so use it. As your track record builds, more avenues will open up to you.
Making the transition from one NED role to multiple was fine. In fact, it was necessary to stop me from getting bored! The ability to shift in an instant from one thing to another didn’t feel overly different from being a CEO.
I always try to have four or five things on the go now. I’ve seen others take on seven or eight and they get run pretty ragged. I love what I’m doing, but I don’t want to overburden myself. You need some headspace to be able to think about the business, in addition to attending meetings. And if you take on too much, you just won’t be available when the companies need you, and that isn’t right.
If you believe that becoming a NED is a new skill you’re going to hone, then anything that increases your ability, skills and awareness will be important. Coaching, training, mentoring, observing… Get as much of it as you can. It might seem like a big time investment if you’re already busy, but the more you invest in yourself, the more you’ll benefit.
When you’re looking at the NED life, you think that the grass looks greener – especially when you’re a CEO running around with your hair on fire 24/7. It’s not really greener though, it’s just different coloured grass. You need to be sure it’s what you want, and that you truly understand what the role requires.
I was surprised by how different the role was. If you’re coming from the executive world, you want to drive things. All your executive instincts are screaming out for you to jump in, figure things out and make decisions. You have to throw all of that out the window to be a NED.
I was lucky in my first role. I had a great relationship with the co-founder of the business and he told me, bluntly, to get out of the driver’s seat, take a passenger seat and read the map! He was very clear and that helped a lot. Like anything in life, you get into a situation and you start sharpening the skills required of you – and that takes time.
You need to keep everyone aligned and corral them if they try to veer off, and all while keeping an eye on the big picture. If you can take the time to look at what’s coming over the horizon – figuring out what opportunities or threats might be coming your way, or contemplating whether there are new ways to add value or revitalise the business model – it will be incredibly valuable. And of particular help to the CEO.
As a NED, you’re there to offer advice and guidance. You challenge the team, boost their ambitions and monitor performance. As part of that, you need to have a clear view of the team and understand them fully – their strengths and weaknesses, their ambitions. Particularly now, when it’s getting harder to recruit people, having a view on bench strength is really important. After all, the strategy may be great and the opportunity to deliver great value might be there, but if the management team isn’t up to it, it’ll hold you back more than you’d believe.
You also have to build and maintain relationships based on trust so you can do your job in the first place. The minute the CEO doesn’t trust you, it’s game over. You have to have their trust so that you can help when things get difficult and performance goes south and everyone’s worried.
Make sure you really want to do it and that your motivations for doing it are right. It also needs to be the right time for you. Once you’ve committed, take your time and get to grips with what the role is and what skills are required. Go and meet some NEDs and Chairs and talk to them. Spend some time figuring out where you’re strong and where you need to enhance your skills in order to take on the full gamut of the NED role. Define where you think you’ll add value because they will ask you that in interviews. You should also probably decide whether you want to go public or private, because they are two different worlds.
Ultimately, you need to know what you bring to the table and how to best deploy it. Part of that is choosing areas to work in – areas you have deep knowledge of and experience with – and then enhancing your awareness of the market and the players even further. Real-world intelligence and market perspective is hugely important.
I’d also recommend spending time making sure you’re strong on the governance side of things – it’s fundamental. There’s a whole slew of things that need to be done, and done well. Not unsurprisingly, the stronger the data and information and insight and foresight and risk assessments are, the better the business performs and the better it does when it gets to a transaction event. So get up to speed. And make sure you keep a value creation lens over everything you do, from evaluating strategy to taking action.
And, finally, trust the skills and knowledge you’ve developed as an executive, but deploy them as the NED role requires. So you’re not driving the strategy, but you can give views on it and ask questions. The experience you’ve got of hiring people and judging their skills and abilities can be applied. The risk assessment skills and the thought processes you use to evaluate situations - it’s all there. Just remember not to dismiss softer skills too. As a NED, you often need to look and listen more than you talk. You should watch what’s going on around the table and pay attention to the contributions from everyone in the room.