The vital role of Non-Executive Directors and Trustees

Imagine the board of a company, charity or other organisation as a well-tuned orchestra, where executive directors lead the ensemble, and Non-Executive Directors (NEDs) and Trustees are the seasoned conductors, bringing harmony and balance, with their independence and impartiality. They do this by providing an alternative perspective, challenging the executive management, and acting in the best interests of all stakeholders. The result is a collective performance with everything in-tune and people not just playing the right notes but in the right order too!

But in today’s “search online for answers” world is there still a role for these positions on boards and what value can they bring?

The fact is, in our complex and ever-changing business landscape, the role of NEDs and Trustees has become increasingly significant. These individuals, who are not involved in the day-to-day operations of a company, charity, or public body, bring diverse skills, independent perspectives, and valuable expertise to the decision-making table.

It's important to note that the specific responsibilities of NEDs and trustees may vary depending on the size, structure, and nature of the organisation they serve. However, both NEDs and trustees share a common focus on enhancing corporate governance, maintaining a focus on strategy, fostering transparency, and promoting long-term sustainability.

This may be something you want to get involved with to further your career or support a cause that you’re passionate about, so what are the key responsibilities for these similar (but a tad different) roles?

Well, in brief they provide:

Non-Executive Directors (NEDs):

·??????Strategic guidance: NEDs provide independent and objective input to the organisation's strategic direction. They actively participate in discussions about the company's long-term goals, growth plans, and overall business strategy.

·??????Governance oversight: NEDs play a crucial role in ensuring that the company operates within legal and ethical boundaries. They oversee corporate governance practices, monitor compliance with laws and regulations, and safeguard the interests of shareholders and stakeholders.

·??????Risk management: NEDs assess and manage potential risks that the company may face. They analyse risk exposure, review risk management policies, and challenge the executive team to implement effective risk mitigation strategies.

·??????Financial oversight: NEDs review and approve financial reports, budgets, and financial policies. They ensure financial transparency, accuracy, and responsible financial management.

·??????Appointment and evaluation of executives: NEDs participate in the selection and appointment of executive management. They also evaluate the performance of executive directors and provide constructive feedback to enhance board and executive effectiveness.

·??????Stakeholder engagement: NEDs represent the interests of shareholders, employees, customers, and the wider community. They ensure that the company considers the views of all stakeholders in its decision-making processes.

Trustees:

·??????Mission fulfilment: Trustees are responsible for ensuring that the organisation's mission and objectives are pursued and achieved effectively.

·??????Strategic planning: Trustees participate in strategic planning discussions and decision-making, guiding the organisation's long-term vision and objectives.

·??????Financial oversight: Trustees review and approve the organisation's budgets, financial reports, and financial policies to ensure sound financial management.

·??????Legal and regulatory compliance: Trustees ensure that the organisation operates in accordance with relevant laws, regulations, and any specific requirements for non-profit organisations or trusts.

·??????Resource management: Trustees are accountable for the effective and efficient use of the organisation's resources, including funds, assets, and personnel.

·??????Fundraising and advocacy: Trustees may play a role in fundraising efforts and advocating for the organisation's mission and impact in the community.

·??????Accountability and transparency: Trustees ensure transparency in the organisation's operations, making information accessible to stakeholders and demonstrating accountability in decision-making.

·??????Evaluation and performance monitoring: Trustees regularly assess the organisation's performance, including its programmes and initiatives, and make informed decisions to improve its effectiveness.

So how can you make sure you are fully trained for what could be an exciting next step in your career?

There is no doubt that these roles not only help the company or charity, and there is a real benefit for ongoing personal development too. But there is a need to make sure that as a NED or Trustee you are also aware of your legal responsibilities, and can perform all of the above duties to your potential.

More often than not the leaders in these NED and Trustee roles have absolutely no training whatsoever about what the role entails. While they may be seasoned professionals in their day jobs, it's essential to recognise that the responsibilities and challenges that come with NED and Trustee positions differ significantly from executive roles. Specific NED and Trustee training would help with things like:

·??????understanding governance principles and navigating legal and regulatory frameworks

·??????navigating complex risk landscapes and making informed decisions

·??????financial literacy

·??????boardroom dynamics and how to contribute constructively to boardroom discussions.

Training | The Role of the NED and Trustee

Because of all of this, Greater Manchester Chamber, UK has created a course specifically for NEDs and Trustees, as part of its comprehensive Leaders Network.

·??????Course title: The Role of the NED and Trustee

·??????Date: 30 November 2023

·??????Time: 9.30am - 4.30pm

We believe that NEDs and Trustees are crucial roles for the success of Greater Manchester organisations, so we have committed to offering our director training at the best price you will find.

Our NED and Trustee course is crafted by industry-leading NEDs who know what it takes to succeed in today's dynamic business landscape.

It’s also delivered by multi-award-winning NED and trainer, Jo Haigh .

Participants will be immersed in an engaging and interactive environment, where they will learn from the best and share experiences with like-minded leaders.

Don’t miss out, book your place now – The Role of the NED and Trustee

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Thanks for reading. I welcome your thoughts and feedback on this article ??

Claire Ebrey

Director, On The Level Consultancy & Pride in Leadership, Trustee of Forever Manchester.