An effective Non-Executive Director (NED) can provide the calm head and seasoned business acumen that all Boards need, but sometimes it doesn’t always work out.
Given that few are qualified for the role, finding the correct candidate is imperative.
Speaking to Executive Grapevine, Gerry Brown, Chairman of Novaquest Capital Management and author of The Independent Director: The Non-Executive Director's Guide to Effective Board Presence, discussed the pitfalls of hiring an NED, and how they can be avoided.
“The practical outcomes of such bad or ugly NED appointments are seen in the many company scandals around the world. These have resulted in five enquiries in the UK, starting with Cadbury and ending with Walker, as well as two laws in the US: Sarbanes Oxley and Dodds Frank. Yet still the scandals continue (for example the banks have received $140trn in total fines while NED inertia has been a key contributory in the Tesco, BP, Petrobas, Toshiba and Volkswagen corporate scandals)”, he said.
Brown’s ten tips for hiring a NED can be seen below.