What should you look for when hiring a non-executive director?
Somewhat unlike hiring employees, when you seek non-execs, you are looking for someone who can be a confidential adviser, a consultant, devil’s advocate, and more.
Non-execs help with your operational plans and budgets, can provide independent advice, and bring outside experience, knowledge and contacts, which can be vital when it comes to securing additional finance from banks or outside investors.
Just like hiring employees though, this is not a decision to be taken lightly – non-execs sit on your board of directors, meaning they will be a regular presence at your board meetings. When you hire non-execs, you will not follow the same process as recruiting employees full-time, as they are not involved in the day-to-day running of your business, but you will work with them for at least one day a month. Non-execs will typically apportion two days a month to the companies they work with.
What to look for
A good non-exec must challenge your opinions, question your decisions and bring an objective angle to bear on your business. It’s crucial to choose one who you can build a good relationship with, and who demonstrates different skills sets to yours as well as appreciates the strengths you bring to the business.
So what should you look for when hiring non-execs? It goes without saying that non-execs should have a proven business background (but not necessarily in your business sector) and excellent financial judgment. As part of the hiring process, check they can commit time and effort to the business and be able to balance the need for short-term profit and long-term results. Assess the value non-execs bring on a regular basis – experienced ones may be tempted to interfere where they are not needed. A good non-exec should be persuasive and bring influence to bear without being over-powering.
Where to go
There is no shortage of people who can help you when it comes to recruiting employees and it’s the same for non-exec roles – headhunters, specialist recruiting firms and your shareholders will all stake a claim. Headhunters will have advantages over traditional recruitment agencies who focus on hiring employees to all levels, as their contacts will come from word of mouth as well as their database.
In line with the increased workload that non-execs are now expected to undertake, you’ll have to pay more to secure their services. You may have experienced hiring employees where salary is the main factor. For the non-exec role, many are financially secure already and are looking for another business challenge. Fees should be negotiated at the initial contact stage and will depend on what your requirements are and how much time you expect them to commit to the business. You can often pay in equity.