Sept. 26, 2024
By Tanya Gass
On September 24, 2024, executive search firm Norman Broadbent, in partnership with professional services firm BDO LLP, launched our much-anticipated report, ‘Navigating a New Era for the Non-Executive Director’.
The report was based on the insights from our survey sent out in May, which garnered responses from 200 UK board members.The event brought together board members for a compelling discussion about the evolving role of NEDs, led by Tanya Gass, Partner and Head of Board Practice at Norman Broadbent, and Shrenik Parekh, Director, Financial Services Advisory at BDO, followed by networking over drinks and canapés. We were also privileged to hear from special guest Malcolm Wall, an experienced NED and winner of the 2024 FTSE AIM-listed NED Awards, who shared his experience on how the demands of the role have changed.
What the Report Revealed
Our research was designed to explore the realities of the modern NED role—how it has transformed, what challenges and opportunities NEDs face today, and what the future holds. Here are some of the key findings:
Top Concerns in the Boardroom: Despite the buzz around ESG, AI, and Cyber, the top priorities for NEDs today are the Economy, Talent and Access to Capital—showing a sharp focus on immediate business challenges.
The Expanding Role of NEDs: Today’s NEDs need to be more engaged than ever, with strategic, governance, and stakeholder responsibilities increasing. The independence and strategic mindset of NEDs, paired with industry expertise, are now seen as indispensable to high-performing boards.
Talent and Succession Planning Struggles: 25% of respondents acknowledged the need for more NEDs, but 96% stated they struggle to attract the right talent. Succession planning remains a significant challenge, with 65% admitting it requires improvement.
Board Evaluation and Feedback: Concerningly, 42% of boards haven’t conducted an external review since Covid, and 45% don’t have formal processes in place to provide feedback to NEDs.
NEDs and Compensation: Remuneration remains a concern, especially for NEDs in smaller or listed companies, with 53% feeling that the compensation doesn’t match the growing demands and risks of the role.
Key Themes from the Event
The launch event allowed us to dive deeper into these findings, where three major themes stood out:
Short-Term Challenges vs. Long-Term Strategy: Boards are grappling with immediate business pressures—such as economic turbulence and regulatory demands—leaving less time for future-proofing. This is where NEDs can add significant value with their independent, strategic outlook.
The Battle for NED Talent: With a need for industry expertise as well as diverse, strategic, and technologically literate NEDs, small- and mid-cap boards in particular are struggling to attract the right people. As organisations evolve, this talent gap must be addressed, especially through better succession planning and more proactive talent searches.
Equipping the Board for Future Success: Board evaluations and feedback mechanisms are underutilised, yet they are essential tools for ensuring effectiveness. Boards that fail to reflect on their performance risk falling behind in an increasingly competitive and regulated environment.
What’s Next for NEDs?
As we look ahead, the report also sheds light on what the future holds. There is a growing recognition that NEDs will need to balance greater governance demands with a broadening range of skills, adaptability, and a sharp long-term strategic outlook, necessary to help businesses navigate today’s increasingly intricate and complex challenges. The role has transformed significantly—from being a largely advisory position into a more complex, hands-on, time-consuming profession, and a more integrated part of the boardroom dynamic playing a crucial role in shaping the strategic direction of the organisations they serve.
Download the Full Report Here
Our report provides invaluable insights for NEDs and boards looking to evolve in this challenging business environment. To explore the full findings, download Navigating a New Era for the Non-Executive Director today.
The research for this study was carried out in May and June 2024 attracting 200 responses, 87% of which were from NEDs (including trustees and Chairs), with the remainder being executive directors. The vast majority of respondents were from the small- and mid-cap market with around a third (34%) of all respondents were from listed companies, including businesses in the FTSE 350 and SmallCap indices as well as on AIM.