A NED can fill a gap in a small company’s experience or knowledge. They may habitually read industry publications and articles that the management time don’t have time for.  They can help a business find its feet, grow or survive tough times. And, if a NED is faced with a situation they haven’t encountered before, they’ll likely have someone in their network to discuss it with.

As a NED isn’tfull time they won’t be overwhelmed with the nitty gritty day-to-day issues but can focus on the big picture.

What is the trajectory of the business? What products or sectors are most profitable and where is the wastage? What regulatory changes might affect the business? Which competitors should the business be aware of and how can the company stay ahead of the competition? They will have the ability to make pragmatic calls with less emotional attachment.

Successful business should leverage their connections. One way of making connections is through networking. However, for a growing business the management team often feel they limited time to dedicate to soirées.

A NED can often offer a rounded network of trusted contacts in their industry and beyond. This could be suppliers, distributors, investors, consultants, partners  or potential customers to help give the company a leg-up.

Company boards frequently adopt bad habits; missed agenda items, forgotten commitments,  issues being side tracked, dominant executive directors and opinions being discounted.

The introduction of a NED can help decision-making to remain unbiased, focussed and balanced, and help to alleviate dischordance.

NEDs can compliment a board by providing both experience and knowledge that other directors may not have, bcut also by being able to take a more objective view of issues affecting the business and offering a wider sense of the possibilities for growth.

If, for example, your company grows and you are considering an IPO, they can act as a mediator  outlining both the upside and downside, particularly if the management team have not previously been involved in a floatation.  Or, if the industry is experiencing a downturn, they can alleviate stress and bring a voice of reason to the table.

Whether it’s potential partners,  investors, customers or regulators,  having an experienced and respected NED can lend gravitas to a company.  Companies often brag about the background of their new high level staff when seeking funding or a new partnership. The FCA has voiced its opinion strongly on the governance of large firms and recently mandated that fund managers must increase the number of independent directors to ensure the interests of shareholders and fund investors are equally addressed.