Influence in the boardroom

The concept of a non-executive director has changed dramatically from the concept of the old boys network. Today's non-executive directors have to work hard, and add more value, and are certainly something to consider for companies that do not already have one.

There are a whole host of reasons for companies to take on a non-exec and these largely fall into the following categories: experience, network and contacts, independence, fresh thinking, energy and, increasingly, for investment and good corporate governance.

In a recent survey "outside objectivity" was at the top of the list of reasons for taking on a non-exec for all sizes of business, with "strategic planning" in second place.

A London-based healthy fast food retailer secured four impressive, investing non-execs. The managing director said: "We also attracted investment from two of the non-execs we did not appoint which is another reason to cast your net wider and make new contacts."

By having an appealing business proposition and a conduit to find the right people, the non-exec route can make a huge difference all round. This director said it would have been a much longer, more arduous process to get to his successful position without the non-execs. They opened doors, raised the profile and introduced much needed funding.

A recent survey of non-execs found that 70 per cent of non-executives are prepared to invest in companies they join, on the basis that they are enthusiastic about the prospects of that company and can clearly see the additional contribution they would make towards its success.

In any economic climate, successful businesses always need strong management and clear leadership. Sometimes additional gravitas and credibility is also required. The company and product may be excellent but additional weight to the board can provide a good source of comfort externally - to investors, suppliers and potential clients.

A business working in the wine industry attracted three first-rate investing non-executive directors. The managing director said: "Our non-execs have backgrounds in well-known multinational organisations. They have added financial control and commercial weight to make our brand more profitable while opening up new aspects for us." He continued: "They helped to fine-tune the business plan and their top-level negotiation skills added value by elevating the business when representing us. They gave the business an extra dimension in professionalism, and the result is that we are treated with great respect."

Often, businesses are started by passionate entrepreneurs; people with vision and talent in their fields. However, sometimes there may be skills shortages or a lack of support or belief in the founder. A non-exec may be an affordable way to access those skills, whilst providing clear focus for the business. Someone with direct industry experience can help steer companies in the right direction and provide a sound level of judgement based on previous experiences.