BEN Event: 22/10/09 - Role of the Non Executive Director

1. Bristol Enterprise Network
“connect locally - compete globally”
The Role of the
Non-Executive Director
22 October 2009
hosted by venue courtesy of

2. Practicalities
Emergency exits
Phones off

3. This evening’s programme
1. Martin Coulthard Director, BEN
2. Chris Curling Non-Executive Director,
Sustrans, At-Bristol, Bristol Water…
3. Dr Andy Phippen Senior Lecturer in Business Enterprise
and Ethics, Plymouth Business School
4. Lesley Stephenson Editor, The Financial Times
Non-Executive Directors’ Club
5. Q&A
6. Keep networking

4. BEN news
‘Future of BEN’ survey now online at
www.bristolenterprise.com/content/ben-survey-results
Upcoming events:
1. 12th November:
with Bristol Environmental Technology Sector
‘Green ICT Solutions’
2. 26th November:
‘Entrepreneurs' Question Time’
see www.bristolenterprise.com to register
2010 programme being planned

5. The role of the non-executive director
5 case studies
of my personal experiences of
having non-execs on boards in my
companies,
and of being a non-executive
director in others
then some views on non-execs for
early stage tech businesses

6. some types of NEDs in smaller,
unquoted companies…
1. truly independent – selected by
entrepreneur/ board
2. a personal investor (e.g. business
angel)
3. nominated by an investor
(individual, corporate or VC) – main
loyalty is to that investor

7. 1. Surface Inspection:
independent NED
company founded in 1987
non-contact surface measurement/
inspection, eventually specialising in ceramic
tile inspection
1992 engaged independent Non-Executive
Director Jim Mackie
remained on board for 10 years, through
substantial growth and changes
key contributions?
• input on strategy, especially sales and
marketing
• truly independent viewpoint
• listening skills
• gave us confidence in what we were doing

8. 2. Surface Inspection:
investor NEDs
1996 – major ‘corporate venturing’ investment
by German customer, with right to appoint
Director
initial NED was investor’s chief executive
key contributions:
• entrepreneurial, enthusiastic and a strong
believer in what we were doing
• encouraged and funded us to successfully focus
just on the ceramic tile inspection market
• excellent industry knowledge, contacts and
reputation – acted as an introducer and
reference in global tile industry
• not motivated purely by the investment – he
really wanted us to succeed for personal reasons
and because we were a key supplier
later replaced as NED by sequence of 2 of his
FDs, who had much less industry knowledge

9. 3. Stonecube:
investor NEDs
2002 formed
Mac and PC software app for realistic, real-time
3D visualisation
2004: product released for tile and print markets
2005: substantial (confidential) angel
investment, with right to appoint investor
director, following meeting at trade show
director was FD of investor’s company, but
board meetings also attended by observer
key contributions:
• total belief in global potential for product/
technology (not just because of funding)
• knowledge of print and especially greetings card
sectors
• introductions, references, feedback, ideas

10. 4. Virtual Mirrors/
InnovaClothing
founded late 90s, based near Edinburgh
developing automated 3D tailoring, in stealth mode
massively ambitious, both technically and business-wise
2002: I made a business angel investment
2002-03: I was a Non-Executive Director, attending
quarterly board meetings
my contributions:
• understanding of the market creation process
• some technical suggestions
• encouragement, support, sounding board
• occasionally joined customer meetings
challenges of being an NED:
• distance to travel to board meetings
• time pressure due to starting Stonecube
public launch
is tomorrow!

11. 5. Third Dimension
Software
founded 2000 by Dr Tim Monks
specialise in hand-held laser measurement –
GapGun – for automotive and aerospace
2003-present: I am a Non-Executive Director
flexible involvement in board and other
meetings
my contributions:
• understanding of growing a machine vision
business focusing on a specific application (cf
Surface Inspection)
• helping develop strategy, with a long term
perspective
• on-call as a sounding board or for advice, e.g. on
funding, recruiting, customer and partner
meetings

12. views on non-execs for early stage
tech businesses
1. can be very valuable to the business, particularly to:
fill a gap in skills, experience, industry knowledge & contacts
give independent advice, especially on strategy, business planning and
medium-to-long term issues (c.f. professional advisers, consultants)
help give the entrepreneur confidence that he/she is doing the right thing
(arrogance + insecurity)
give credibility in eyes of a potential partner, investor or acquirer
2. desirable characteristics of the NED
experience and knowledge that complements that of the entrepreneur/
rest of the board
true believer in the entrepreneur, business and products (whether NED is
independent or investor nominated)
able to establish relationship of trust and respect with entrepreneur
good communicator and listener, to act as a sounding board
been there, done that – useful but not essential
3. some NED involvement with operational issues can help
4. needs to be a flexible arrangement, in terms of involvement and
remuneration
5. tough to make the right connections cost- and time-effectively!