Mark Howard writes for the Financial Times’ Your Questions column on the pros and cons of becoming a non-executive director
Becoming a non-executive director in a company can be a rewarding and strategic move for many individuals. However, it’s crucial to proceed with a clear understanding of the responsibilities and risks involved.
Mark Howard, Partner in our Corporate team, responds to a Financial Times reader's question, explaining some of the pros and cons of taking on a postition as a non-executive director (NED).
Mark explains that there are a number of potential opportunities and risks that can come with taking on a NED role. He explains:
Typically a non-executive director will be engaged to provide a few days’ regular service per month. This can be to attend full board meetings and, if appointed, meetings of relevant board committees such as audit, remuneration or risk meetings. Good preparation for these meetings is always important, taking the time to read relevant agendas and papers circulated by the company secretary or executive directors in advance [...]
"There are cons to the NED role, however. One of the main challenges is the limited control NEDs have, as their role is primarily advisory and lacks executive powers to implement decisions, which can be challenging for those used to a hands-on management role. Liability is another key concern. NEDs are equally liable with the executive directors for the company’s success or failure, which means they face legal accountability that can expose them to personal risk.
Read the full article in the Financial Times here (subscription required).
