The allure of securing a Non-Executive Director (NED) for the board of your family business often stems from their potential to bring invaluable insight, governance, and strategic direction. However, attracting the crème de la crème of NEDs is far more challenging than it seems. The paradox lies in the fact that the most sought-after NEDs are typically those who have no pressing need to join your board. This article explores why these exceptional individuals might decline your offer and why their reluctance is a sign of their true value.
The Overstretched Portfolio NED
In today’s corporate world, many NEDs are creating portfolio careers, amassing multiple board roles to piece together an income that approximates their previous full-time salaries. This approach is not without its pitfalls. Juggling numerous commitments often leads to overextension, resulting in diminished effectiveness and engagement. These NEDs, motivated by financial necessity rather than genuine interest, may lack the bandwidth to provide the depth of oversight and strategic input that boards require. Their contributions can become perfunctory, driven by the quantity of roles rather than the quality of service.
The paradox lies in the fact that the most sought-after NEDs are typically those who have no pressing need to join your board.
The Value of Financial Independence
Conversely, those NEDs who have reached a point of financial independence represent a different calibre of board member. These individuals are typically seasoned executives who have achieved significant success in their careers and no longer rely on NED roles to supplement their income. Their wealth of experience, coupled with their financial stability, means they can afford to be selective about the boards they join. This selectivity is a key indicator of their potential value to your organization.
The Reluctance of the Best NEDs
The best NEDs often reside in a comfortable position, literally and figuratively. They may prefer spending their days on the golf course or at a villa in the sun rather than engaging in the demanding duties of board service. Persuading these individuals to leave their leisurely pursuits and commit to your board is no small feat.
However, when they do agree, it is usually because they see a genuine opportunity to make a significant impact. Their decision to join is not driven by financial gain but by the potential to contribute meaningfully to the organisation’s success.
Attracting Top NED Talent
To entice these high-calibre NEDs, families must offer more than just financial incentives. They must present a compelling vision and demonstrate a genuine need for the NED’s unique expertise and perspective. Clear communication about the board’s strategic objectives, the challenges it faces, and the potential for the NED to play a pivotal role in shaping the future can be powerful motivators.
Additionally, creating a board culture that values and respects the contributions of its NEDs can make the role more appealing. This includes providing adequate support, creating an environment of collaboration, and ensuring that their input is not only heard but also acted upon.
Conclusion
The best NEDs are often those who do not need the role for financial reasons. Their reluctance to join your board is a testament to their value; they can afford to be choosy and will only commit to opportunities where they believe they can truly make a difference. Attracting these top-tier NEDs requires a thoughtful approach, emphasizing the meaningful impact they can have rather than the monetary rewards. By doing so, families can secure the kind of board members who bring unparalleled experience, dedication, and value to the family enterprise.
About the Author: David Twiddle, Managing Partner at TWYD & Co is a trusted talent advisor to families and entrepreneurs, around the world. He introduces exceptional executive and non-executive talent to his clients and provides access to an elite network of the most renowned family business advisors, in many global jurisdictions.