The service has the backing of the Government’s Department for Business, Innovation and Skills (BIS) which is looking to bolster resources aimed at medium-sized companies – although it must be said that The IoD’s NXD Directory will be useful to companies of all sizes.
Minister for Business and Enterprise, Mark Prisk, says: “Becoming a non-executive director, or having one in your company, is one of the best ways of sharing skills, experience and business acumen. Encouraging companies to take on non-executive directors is a key strand of our mid-sized businesses campaign to help them improve their leadership, export performance and access to finance.
“Our campaign is aimed at supporting our mid-sized firms to contribute an additional £50 billion of GDP by 2020 and realise their potential for growth.”
More than 2,000 IoD members requested to join the Directory as NXD candidates within days of the launch being announced earlier this month. The list includes Chartered Directors, experienced directors of multi-nationals and successful entrepreneurs. Registration as a candidate is completely free of charge.
Companies, trusts or school boards who are looking for non-executive directors will pay an administration fee of just £100, and will be carefully matched up with up to 10 possible candidates. There will be no additional recruitment or head-hunter’s fee payable. The only requirement for companies using the service is that at least one member of the board must be a member of the IoD. The actual process of appointing a candidate, of course, will be the responsibility of the appointing organisation.
The service has been set up in response to calls to make the process of finding a non-executive easier, less expensive and more accessible to tens of thousands of small to medium-sized companies, charitable trusts and educational establishments.
The concern of the BIS and of the IoD, has been that while FTSE companies employ non-executive directors routinely (as directed by The UK Corporate Governance Code), medium-sized and smaller companies may avoid doing so, possibly because of limited access to suitable candidates, high cost, or a lack of understanding of their role. Instead, many organisations call in external consultants, but consultants are unlikely to have either the same degree of accountability, or level of input into decision-making, as an independent member of the board.
Non-executives drawn from large companies can also be considered to be a PR coup for an SME, not least, as a demonstration of a company’s ability to attract high-level talent.
Andrew Main Wilson, the IoD’s Chief Operating Officer says: “I believe one of the fastest ways to grow a medium sized or small sized business in today’s climate is the intelligent recruitment of an appropriately skilled non-executive director to that company’s board. The IoD NXD Directory will provide companies looking to add fire power to their boards with a shortlist from thousands of experienced directors.
“Why wouldn’t you want the wisdom of a senior, experienced director advising you and your board, two or three days a month, for a fraction of their full-time employment cost and at no recruitment cost to your business?”
Case study – a non-executive director’s viewpointJohn Sheath, a Chartered Director, Fellow of the Association of International Accountants and managing director of Cornerstone consultancy on the Isle of Man, supports the new Directory. He sits on a number of private and listed company boards as a non-executive director. He highlights the benefits he believes can be afforded to company boards by non-execs. He says: “I became a non-executive director to share the skills, experience, contacts and insights I’d gleaned during my varied career. I really enjoy what I do, but it’s not an easy option. You have to be knowledgeable, and often thick-skinned, to become what the IoD calls ‘a critical friend’ – prepared to challenge and asking the ‘what if’ questions to identify any potential oversights by the board.”