Building on a strong legacy and reputation in the CFO and Non Exec community, Norman Broadbent Group recently hosted another successful and stimulating breakfast. As usual we tackled a number of topics; however that particular morning’s question was
“Why do CFOs want to become Non-Executive Directors?”
In today’s business market, with increasing challenges around governance and conduct, NEDs come into their own at a time of crisis when probing questions are asked, and tough decisions
have to be made.
Over breakfast – and with the help of three exceptional NEDs as guest speakers – we talked about three key areas that would provide insight to CFOs considering the transition to NEDs. These were:
- The core traits company’s look for in an NED
- Why do CFOs want to become NEDs?
- The key differences between an Executive and Non-Executive role
The core traits company’s look for in an NED
Our guest speakers shared their invaluable insight regarding the core traits a company may focus on when selecting a NED:
- Likely to be well respected in their industry, they will be credible with a proven track record of relevant achievement
- Reflective and considered, they will be able to listen, probe and challenge constructively
- With an independence of mind, they will understand the need for, and accept, collective responsibility
- Although from an executive background that is often ‘hands-on’, they will understand the boundaries of Executive and Non-Executive roles.
Why do CFOs want to become NEDs?
So why do a significant number of CFOs wish to further develop their careers by taking on an NED role? From our experience, the reasons are varied and include:
- Gaining new insights into other sectors and businesses
- Understanding how different boards function
- Gaining new boardroom skills and experiences
- Being able to sit on several boards, and building a portfolio of NED roles
However, while CFOs cite all of the above and more, the overwhelming majority of CFOs say the underlying driver is the ability to play an influential role in the future direction of a company.
The differences between an Executive and Non-Executive role
Firstly, a key difference is that whilst influencing skills are important in both roles, when sitting at board level, influence is ‘top down’. This ‘influencing’ is primarily aimed at the CEO. It can therefore take longer for an NED to see their influence take effect which can prove frustrating for some. Secondly, the advice given is not necessarily followed. Because of these factors, maintaining a close relationship with the CEO becomes vital in ensuring the NEDs influence is positive and impactful. Finally, another factor relates to who gets the credit. A frustration for many NEDs is watching the CEO take the credit. Some NEDs comment they often feel like an outsider, and miss the team dynamics of being part of a direct leadership group.
As always, we were thrilled to provide a forum for discussion. Our Board heritage and 40 year track record of success in the Executive and Non-Executive space meant we were able to draw together an interesting network of senior executives.
If you would like to know more about our experience and expertise across the Executive and Non-Executive space, or to confidentially understand how we may help you and your company, please contact
<u>Angela Hickmore</u> (Group Managing Director, Norman Broadbent Group) or
<u>Jonathan Stringer</u> (CFO Practice, Interim Executive Management) at:
angela.hickmore@normanbroadbent.com
jonathan.stringer@normanbroadbentinterim.com
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