Effective Board Meetings

3. Non-executive Directors

Non-executive directors ('non-execs') can make a board considerably more effective, at a low annual cost.

3.1 Consider the role non-execs could play in your business.

For example, they can be particularly effective in:

• Providing an independent overview of the business strategy.
• Bringing experience of other companies and industries.
• Countering board weakness in a particular area.
• Planning the succession of executive management for a business.

3.2 Recruit non-execs who have the right personality traits.

• The stronger the other personalities on the board, the stronger the non-execs' personalities need to be.
• Non-execs should have no axe to grind and no fear of upsetting their board colleagues. They should give honest critiques of new ideas.

3.3 Use non-execs as agents of change.

• Without non-execs, there is a tendency to carry on doing the same things the same way, without considering the alternatives.

3.4 Draw on non-execs' experience and objectivity to help take tough decisions.

For example:

• Closing down loss-making activities.
• Laying off employees or asking a fellow director to resign.
• Deciding emotive issues like directors' pay, share options, the company car policy, and remuneration generally.
• Managing the business through unexpected crises.
• Appointing new auditors or directors.
• Deciding whether to take legal proceedings on a particular issue.