The first main difference between a director and a non-executive director (NED) is that a NED is not on the board of directors to run the day-to-day business.
Running the day-to-day business of the company is the job of the executive directors and senior management.
NEDs are on boards to provide oversight, sectoral expertise, knowledge and new insights, and to constructively challenge management when the need arises.
A NED must consider company strategy, performance, risk, people and they should actively monitor management executives’ activities.
It is important to note that non-executive directors have the same legal responsibilities as executive directors.
Being a non-executive director involves a legal obligation of the highest degree. If a non-executive director doesn’t challenge bad corporate governance or ethical breaches, they can fall foul of the law.