Seminar 3: Non-Executive RolesDavid Doughty• Chartered Director• Chair Thames Valley HIEC• Chair The Centre for Sustainable Healthcare• Non-Executive Director Oxfordshire Learning Disability NHS Trust• Director Oxfordshire Business First
Seminar 3: Non-Executive RolesWhat is a Non-Executive Director?• No difference between executive and non- executive roles• Limited liability?• “Critical Friend”• Can be a Governor or Trustee
Seminar 3: Non-Executive RolesWhat are the statutory duties of a NED?• act within powers set out in the memorandum of association,• promote the success of the company,• take into account the legitimate interests of stakeholders• exercise independent judgement,• exercise reasonable care, skill and diligence,• avoid conflicts of interest,• not to accept benefits from third parties, and• declare interests in proposed transactions or arrangements.
Seminar 3: Non-Executive RolesWhat skills do Non-Executive Directors need?• Integrity - high ethical standards• sound judgement - willingness to challenge• interpersonal skills – listening, persuasiveness, ability to communicate ideas, sensitivity, openness and awareness of non-verbal communication, co-operation and team-working, facilitation skills• leadership and self-awareness, ability to gain respect and attention, confidence• critical thinking, creativity and strategic awareness - the ability to take the wider, strategic view• business acumen, ability to identify new business opportunities, embrace change and innovation• ability to assimilate, assess and analyse information, especially financial information• political astuteness, diplomatic, able to deal with conflict• determination, with the tenacity and drive to succeed• keenness to gain new knowledge and skills to develop competences further
Seminar 3: Non-Executive RolesHow to become a Non-Executive• You may have to start as a governor or trustee• There is strong competition for NHS and Housing Association posts• Finding roles – Networking (face to face and social) – Research (Internet – Google Alerts) – Contact Chairs directly – Executive Transitions
Seminar 3: Non-Executive RolesCase StudyYou are a newly appointed NED in a small engineeringcompany about to attend your first Board meeting. Last yearthe company had its best ever year in terms of sales and profitand all staff and executives received a profit related bonus.This year, performance has been poor, sales are down and thecompany has made a small loss. There is no staff bonus, thereis a pay freeze and some staff have been laid off.In your Board papers you see that the Remunerationcommittee are asking the Board to approve bonus paymentsfor the executives at the same level as the previous year.What do you do?
Seminar 3: Non-Executive RolesCase Study• Is there a ‘right’ answer? – Reward for failure – Motivation for executives to go the extra mile• Who are you accountable to? – Shareholders – Staff – Customers – Community
Seminar 3: Non-Executive RolesCase Study• Talk to the Chair• Talk to the SID / other NEDs• Act with Integrity and Independence