Non Executive Directors are integral for a company following Corporate Governance Principles. It is a requirement that at least half of the Board should comprise of independent Non Executive Directors working in the best interests of the company and shareholders.
A question often bubbles out from the stakeholders and the nomination committee
“What are the skills that make a non executive director worthwhile for the company”.
The question is so valid but the answer remains mysterious to the eager newbies learning about the integral aspects of corporate governance.
The Strengths of an ideal Non Executive Director
Like executive directors the non executive directors have a vital contribution in the entrepreneurial leadership of the enterprise.
All Non Executive Directors must be Independent and Competent. They must have proper academic qualification, knowledge regarding financial aspects of the company, experience in the relevant sector and must be given induction upon joining the board. A lot of companies conduct CPD (Continuing Professional Development) program for their Executive as well as Non Executive Directors.
Here I am compiling a list of essential skills that should exist within an ideal Non Executive Director.
An ideal Non Executive Director is independent, unbiased, competent and objective in his approach. He loves remaining isolated with the company’s regular affairs, does not hold a material financial interest in the organization, exhibits objectivity, integrity and always work in the best interests of the company. To be a suitable non executive member of the board a person must have a wider vision, excellent listening/ communication skills, compliance to a professional conduct, nice judgmental and influential skills.
2- Professional Player
A suitable non executive director carriers a relevant professional degree/ certification and has exceptional grip over financial/ management aspects of a company.
He likes working as a Team and knows his game well to instigate executive directors for strategically enhancing profitability and improving cash reserves of a company.
An ideal non executive director is smart enough to distinguish fabrication and authenticity, he respects the executive directors and realizes the importance of accomplishing long term objectives of the enterprise.
4- Relevant Experience
The suitable non executive directors have the relevant work experience so are trained to have an interrogative mind prohibiting the executive directors from fraud and misstatement/ misrepresentation in financial statements. They know the long term objectives and mission of the corporate entity and carry a wider vision to ensure it is achieved through proper decisions.