Advice for Aspiring NEDs

When I decided to leave full-time employment, I gave up many perks and privileges. But I preferred it and enjoyed the freedom and flexibility that came with it. But it has not all been plain sailing. 

I first took on a Non-Executive role 20 years ago. I was then the full-time Chief Executive of a fully listed public company and my Chairman thought it advisable, nay, necessary for me to have the opportunity to serve on another board and look at how someone else runs a company and in the process look back at yourself.

It was invaluable advice. But first, you need to understand some of your responsibilities as Non-Executive Director. The law does not distinguish between Executive and Non-Executive Directors. The Companies Act of 1985 was silent on the subject and the revised Act of 2006 makes no mention either. A Non-Executive Director is as liable as an Executive Director. 

If you want to take on this responsibility you need training. That applies to both Executive and Non-Executive Directors. There are several good courses. I have attended three plus several top-up seminars on specific issues, changes to the law etc.

I left my role as a plc CEO in 2005. The chairman wanted to retire and I felt that I had taken the company as far as I could. We raised some fresh funds, secured the succession and made an announcement that covered all the issues.

I was then free to pursue other interests as they say and indeed I was. I had prepared for this moment, I had taken advice, but I must admit I had not really reached a decision. I felt that all the options were open to me. 

1.    I could look for more of the same. 
2.    I could start to build the portfolio. 
3.    I could build my own business perhaps as a consultant.
4.    Some combination of all of these.

This was a mistake because I was sending a mixed message to the recruitment community. Rightly or wrongly, they want to know how to pigeon hole you, both as to your skill set and as to your aspiration. Saying that you want to have a bit of whatever’s going is not likely to succeed.

Consequently, I had a few false dawns. I actually did option 4 in that I did a bit of everything but the result was that after a year or so I was not much further forward. So in 2007 I made a clear decision: I would not accept another full time role even if it paid brilliantly well. I was committed to a plural career. That immediately clarified my position vis-a-vis the head-hunters and indeed my other contacts. Within a few weeks, by the beginning of March 2007, I was appointed to my first Chairmanship, a listed company with an exciting video streaming technology. 

In June I became Chairman of a centre of excellence backed by the Government for the development of Intelligent Transport Systems (ITS), which are used to improve road safety, reduce congestion and reduce carbon emissions.

In between I became a Board Mentor of a peer community for senior executives.  I looked after some of the other members and helped them in various ways.

I remained a director of JP Morgan Japanese Investment Trust plc, my first NED ship and in February 2006 I had been appointed a Governor of a University. This was equivalent to an NED ship and again carried some important responsibilities for the character of the institution and the education of 23,000 students. 

So I then had five engagements. I set out to achieve a balance of work between different kinds of organisations. Part of the attraction of going plural is that I enjoyed different sectors, different types of work. I wanted to be Chairman of a listed company; I wanted something in the public sector; I wanted something in education; I wanted to stay in touch with the City at the wider level.

I cannot over emphasise the importance of contacts. Networking is an important skill and needs to be developed. Your network is part of your value added. You need to maintain an ever-wider circle of friends and associates. This starts with immediate colleagues and peers in your profession. But over time it is important to enrich this with a variety of other industries, other professions.

So in summary my lessons are these: 
              
•    Know who you are and what you want to be.
•    Position yourself clearly in terms of your target market and your route to market.
•    Take the training to understand the responsibilities of being a director of a company.
•    Build your network to build your portfolio.
•    Set out to enjoy it.

David Pearson was an Executive Director and then CEO of two listed plcs before he developed a portfolio career holding 10 NED roles including two chairmanships in various markets including two listed companies and some public sector and voluntary sector roles.