It’s well known that most large corporates and private equity backed companies use non-executive directors (NEDs) and third party business advisors, and senior business people understand the benefits of having external, independent advice.
These days an increasing number of smaller businesses are realising the benefits that part-time senior, experienced and independent advisors can bring to their businesses. But what are these benefits?
Smaller businesses and start-ups are cottoning on to the fact that having NEDs can be a valuable asset, providing a source of impartial business advice, experience and contacts… The NED is there to make sure that the company is operating to its full potential and that its interests are protected. There are manifold benefits to having an NED.
Sage, the leading accounts software providers, recently said this on NED’s, and I’m not sure we could put it more clearly:
Recruiting a non-executive director (NED) can help a small business gain experience, knowledge, contacts and ideas, as well as provide constructive criticism – all of which cannot fail to be of value to a company regardless of its size.
Many people will have heard of NEDs but few fully understand what they are, much less what they can potentially do for a small or growing business.
What a non-executive director can bring to your business:
1. They have experience
A NED can fill a gap in a small business owner’s experience, or can add industry knowledge of a specific sector that the business is targeting.
Most NEDs have usually helped a number of businesses find their feet, grow or survive tough times. And, if a NED is faced with a situation they’ve never dealt with before, they’ll probably know someone who has.
2. A fresh perspective
A NED doesn’t work with a business full time and won’t be concerned with day-to-day issues but will instead look at the bigger picture.
What is the direction of the business? Are targets being met? What environmental changes might affect the business? Which competitors should the business watch out for and what are the plans to keep ahead of the competition? They will have the ability to advise with confidence and make unbiased decisions in the interests of the business.
3. Connections that count
A successful business is a connected one, and a great way of making connections is through networking. However, for a small business