Non-executive directors valued

Non-executive directors are still bringing value to a company, but could do more, new research shows.

Despite costing an average of £31,185 per year, non-executive directors are viewed as good value by 71 per cent of small and mid-cap companies.

Findings from the latest QCA/BDO Small and Mid-Cap Sentiment Index reveals that most (83 per cent) view non-executive directors (NEDs) as ‘sufficiently’ independent.

However, while 90 per cent say they are knowledgeable about the business, 37 per cent of companies and 59 per cent of advisers want more ‘long-term’ vision and planning from NEDs.

Of those demanding more, 45 per cent want more valuable contacts with other organisations, and 31 per cent would like to see more investor contacts.

Scott Knight, partner at professional services firm BDO, comments, ‘NEDs are one of the most valuable resources for a quoted company and the dated stereotype of the NED as a walking contact book has given way and evolved into a far more strategic role.

‘Our research shows, and our clients tell us, that NEDs are often making a significant contribution through independent and broad business experience, providing constructive checks and balances on executives, and subsequently improving corporate governance.’

More from the QCA/BDO Small and Mid-Cap Sentiment Index:

While 40 per cent of small and mid-cap firms believe NEDs are knowledgeable about their associated company, only 9 per cent of advisers believe this to be true.

Tim Ward, chief executive of the QCA, adds, ‘The onus is on companies to get the most out of their non-executive directors and to bring their advisers on that journey with them, being proactive in demonstrating how they best add value.

‘Current economic conditions make this need even more acute – growing planning is crucial as companies free themselves of the recession.’

Ben Lobel

Ben Lobel

Ben Lobel was the editor of and from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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Non-executive directors