While many business owners are aware of the benefits that a Non-Executive Director (NED) can offer, few realise that they can get the same advantages plus more from a part-time Finance Director (FD).<\/p>\n
A NED is a member of a company\u2019s or organisation\u2019s board of directors but not its executive management team. As full, legal directors of the company, they attend and vote at board meetings but don\u2019t get involved in the day-to-day management of the business.<\/p>\n
NEDs are appointed for their independence and are there to supervise and hold executive directors such as the CEO and FD to account. They\u2019re often involved in debates about corporate strategy and policy. NEDs oversee the checks and audits of the company\u2019s books to ensure financial reliability, as well as to set executive pay and incentives, appoint and remove directors, and to oversee business risk management.<\/p>\n
They are chosen for their many years of experience in the corporate world, their wide network of relevant business contacts, and their understanding of how policies, processes and decision-making can help or hinder a company\u2019s progress.<\/p>\n
They are highly valued for the fresh perspective they bring, which is especially important if executive directors have become so involved in the day to day running of the company that they are unable to \u2018see the big picture\u2019.<\/p>\n
NEDs are well compensated for their efforts. The NEDs of a private limited company may receive a salary of between \u00a33,000 and \u00a350,000 per annum. Of course, the larger the company, the bigger the NEDs salaries. For instance, salaries for FTSE 100 NEDs can be anywhere from \u00a3100,000 to \u00a3300,000, according to the Dynamic Boards\u2019 NED recruitment website<\/a>. At the other end of the scale, startups might offer their NEDs or external directors (as they are also known) a mix of remuneration such as a smaller salary and shares in the company.<\/p>\n Here\u2019s the thing: NED’s offer really great advice, however quite often a business owners don’t have either the capacity, bandwidth or skillset to implement those changes. A part-time FD can also offer business owners or CEOs all that great advice but have the capacity, experience and skills to implement change. Additionally, while a NED does not get involved in the day-to-day running of the business, a part-time FD can. Your part-time FD can help your company with all the following:<\/p>\n <\/p>\n One of the most significant differences between an FD and a NED is that a NED is not always available when business owners or CEOs might need them. Quite often, people will be NEDs on more than one company board, which means they simply don\u2019t have the time and energy a company might want or need.<\/p>\n If companies don\u2019t hold regular monthly board meetings, the less interaction they will have with their NEDs. In a MoneyWeek<\/em><\/a> article, Stephen Connelly wrote, \u201cMore meetings make a huge difference as to how closely non-executives are involved, and what they learn and know.\u201d[1]<\/span><\/a><\/p>\n Their role can be hampered further if the information they are provided with by the board is limited in some way.<\/p>\n \u201cA non-executive with concerns about a firm\u2019s finances would never make for the finance department and ask for all the last quarter\u2019s debtors, for example, to be pulled out for review,\u201d says Connelly. Instead, they are usually provided with \u2018board packs\u2019 of information on which to analyse and base their decisions.<\/p>\n \u201cIf the information is considered lacking, then changes to what\u2019s provided can certainly be requested, and it\u2019s up to the Chairman to ensure the board is getting all it needs. But this relies on the non-executives knowing what to ask for, and it seems unlikely this will ever be 100% comprehensive.\u201d<\/p>\n An FD, by comparison, will work both \u2018in\u2019 and \u2018on\u2019 the business, helping to ensure the company is following its overall strategy to meet both short- and long-term goals. He or she can dig down to root out the cause of the problem and then provide you with possible solutions.<\/p>\n While NEDs are only usually present for the company\u2019s board meetings, you as owner or CEO can decide how much involvement your part-time FD has with your company. For instance, you can arrange for your part-time FD to work with you once or even twice a week or perhaps once a fortnight, depending on the circumstances and the project or challenge involved.<\/p>\n <\/p>\n [1]<\/span><\/a> \u2018What are non-executive directors for?\u2019<\/em>, Connolly, Stephen, MoneyWeek, November 1, 2018, www.moneyweek.com<\/a><\/p>\n[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n","protected":false},"excerpt":{"rendered":" While many business owners are aware of the benefits that a Non-Executive Director (NED) can offer, few realise that they can get the same advantages plus more from a part-time Finance Director (FD). A NED is a member of a company\u2019s or organisation\u2019s board of directors but not its executive management team. As full, legal […]<\/p>\n","protected":false},"author":2,"featured_media":2944,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1],"tags":[],"post_folder":[],"_links":{"self":[{"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/posts\/2943"}],"collection":[{"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/comments?post=2943"}],"version-history":[{"count":0,"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/posts\/2943\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/media\/2944"}],"wp:attachment":[{"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/media?parent=2943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/categories?post=2943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/tags?post=2943"},{"taxonomy":"post_folder","embeddable":true,"href":"https:\/\/fdexec.co.uk\/wp-json\/wp\/v2\/post_folder?post=2943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n