Guides
How to become a non-executive director
A non-executive director (NED) is a member of a company’s board of directors who does not hold a full-time managerial or executive position within the company.
Unlike executive directors who are involved in the day-to-day management and operations of the company, non-executive directors provide an external and independent perspective to the board.
Here at the Corporate Governance Institute two of the most common questions we are asked by students is: “How do I become a non-executive director (NED)? Where do I start?”
Well, it turns out that you can dramatically increase your chances of joining the board you want by becoming a certified board member.
In this short, insightful guide we will show you what you need to do to become a successful – and in-demand – non-executive board member.
Key takeaways from this guide include:
- Why a NED career requires the same amount of planning as your previous career
- Why taking on a NED role is a big responsibility but worth the effort
- Initially non-executive director roles can be hard to come by so preparation and networking are vital
- To succeed, it is best to start early and ensure you are certified as a director
What do non-executive directors earn?
In the EU, the median salary for non-executive directors is £70,000.
“A good non-executive director is very good at big picture strategy; looking at the sea, not the waves,” says Duffy.
Board members are not there to manage the day-to-day operations of the organisation or business; they are there to encourage fresh thinking in the boardroom.
Bringing fresh insights and new skills to the business should be the goal of non-executive directors.
“The Diploma in Corporate Governance prepares people to be confident non-executive directors, to be able to ask the right questions in the boardroom,” says Duffy.
Learn more about becoming a non-executive director in this video masterclass by David W Duffy, below.
What does non-executive director mean?
Non-executive directors are often selected for their expertise, industry knowledge, and experience in relevant fields.
They can bring a fresh perspective to the boardroom and challenge existing norms, ultimately contributing to better decision-making and overall corporate governance.
The Diploma in Corporate Governance has been developed to prepare non-executive directors for a role on a board. Remember:
- In business, a non-executive director is a member of a company’s board who does not form part of the business’ executive management
- Company law does not distinguish between executive directors and non-executive directors (NEDs)
- Usually, NEDs stay out of the day-to-day operations of the business
- NEDs share the same legal responsibilities, liabilities, and potential liabilities as executive management
Who should take the Diploma in Corporate Governance?
A Diploma in Corporate Governance is an outstanding opportunity for personal growth.
- In addition to providing a detailed understanding and up-to-date knowledge of the role of a non-executive director, the Diploma also covers leadership, corporate strategy, finance, ESG, culture, networking and crucially, organisational governance
- Non-executive directors new to the boardroom, or those looking to improve their effectiveness at the board level, will find the Diploma an invaluable experience
How to become a certified non-executive director
During the last few years, the role of non-executive directors has evolved considerably.
- It is imperative that independent directors challenge any governance breaches fearlessly and be strong voices in the boardroom
- According to the Association of British Insurers (ABI), firms whose boards are dominated by executive directors underperform because there are fewer non-executive directors
- Good corporate governance and strong non-executive directors on company boards make companies more valuable to investors
- The board of directors plays a vital role in maintaining board standards, managing conflicts, and making sure factual information is presented
- The role of the non-executive director carries many legal obligations. A director who does not challenge bad corporate governance or ethical breaches could violate the law
- The board of directors’ responsibility is to ensure that the board’s duty of care is upheld
- All directors are expected to practice good governance, but independent, non-executive directors are held to a higher standard
Further reading on how to join a board:
You can develop your career as a non-executive director with a globally-recognised, university-approved Diploma in Corporate Governance.
Download your free course brochure below to discover more.
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