Why it pays to invest in NEDs

When it comes to start-ups vs Corporates, NEDs can (and probably should) be a very different ‘animal’ and have very different roles and expectations. Either way a good NED, and a good Board more specifically can be a tremendous asset to a business, and this article shares how the role is often misunderstood, and often abused. Organisations like the IOD (Institute of Directors) give excellent training and guidance on the role, particularly from a legal and governance perspective. 

I spend most of my time with start-ups and scale-ups, and I think founders really miss a trick by not exploring the benefit of an independent, and experienced NED, whether you have raised money or not. Even more so if you have raised money I would say. 

Your choice of NED(s) should be based on clarity of what is required, taking into consideration the stage of your company, and any weaknesses or gaps in your executive team. An NED can be many things, advisor, mentor, door-opener, strategist, devils advocate, fundraiser, to name but a few. Be sure what you need and why, and hire with due diligence, just as you would for an executive hire.  It's most important to check the motivations, capabilities and values of your potential NED, as much as skills, qualifications or network.

The most critial thing on both sides is clarity. Both fully know what can be and is expected of the other.

A good Board can make or break a company. If you want to explore further, happy to have an informal coffee with any founder or VC.