Following a recent roundtable discussion,  Totum Director Tim Skipper alongside four other leading professionals shared their knowledge behind the role of a Non-Executive Director and the uptick of this role in today’s professional services firms.

The role of the non-executive director (NED) is becoming increasingly prevalent in law firms, regardless of size or structure, and at Totum we have an excellent track record in placing the right NED with the right firm.

But with individual firms looking for different profiles and skillsets from an NED, what process should they follow when recruiting NEDs and what value can the position bring to a firm’s strategic direction?

This was the theme of a recent Managing Partners’ Forum roundtable, moderated by Totum’s own Managing Director, Tim Skipper. Featuring commentary from four experienced professionals in Martin Bunch, Managing Partner at Bates Wells; Sarah David, Non-Executive Director at Bates Wells; Nicola Sawford, Chair at MKDP; and Shefaly Yogendra, Portfolio Non-Executive Board Director, the discussion focused on three key areas: the reasons behind the surge in NED appointments, the value they bring to the boardroom and how to become one.

The business benefits of an NED

Starting the conversation, Skipper shared how Totum’s team had seen an increased focus on the appointment and recruitment of NEDs into law and other professional services firms over the past year. Totum itself recruited its first ever NED – Chris Lynch – in 2021, with Skipper calling the appointment ‘a huge success’.

Bunch agreed that NEDs can have a positive impact on boardroom strategy. Bates Wells appointed its first non-executive director in 2010, with a further three serving since that time, according to Bunch. He distilled three key benefits to having an NED board member.

Firstly, NEDs bring ‘an independent view’ to business decisions. Bunch warned that boards can become an ‘echo chamber with a danger of groupthink’, with an NED able to challenge existing strategy.

Secondly, the independent nature and external expertise of non-executives make them an excellent sounding board for partners. This leads into the third benefit Bunch sees, which is that non-executives bring knowledge and expertise that the existing board may not have – something that is ‘always very useful to have in any discussion when you’re making decisions for the business’.

Sarah David sits as an NED on Bates Wells board, alongside two other non-executive roles. She agreed with Bunch that an NED needs to be able to challenge the existing board, but that organisations need to think carefully about how they prepare for this.

“There is often a tension between the board and the executive. You want that, but how will you work healthily and effectively with that outside voice when challenges come up?” she asked.

For the panel, an effective NED appointment requires real thought and clarity around the remit and expectations of the role. What exactly do you want in an appointment and how will they operate?

If many firms are honest, they’ll admit they probably don’t know. They know they need independent advice, but they’re not quite sure what the position looks like.

What makes a good NED?

Shefaly Yogendra currently serves on four listed boards and has just ended a tenure on the board of a university. She believes that the success of an NED appointment comes down to how their decision-making sets businesses up for success beyond their own tenure.

“When I was on a university board, I used to tell people that we’re making decisions which will shape the lives of our students long after we’re dead. It’s about focusing on stewardship,” she said.

Part of this is horizon-scanning, with a good NED able to foresee things you can’t, argued Yogendra.

“People didn’t see the pandemic coming, or the impact of generative AI. Who can you bring into the room who can see and anticipate these challenges?  And, will you listen to them when they flag things that are out there?” she said.

Of course, not every NED applicant will fit the bespoke requirements of your firm. For the panel, there are certain red flags that should make you wary of a candidate. These include those who want to do roles that somebody else is already carrying out, such as NEDs with previous CEO experience who begin telling the existing CEO how to do their job. This can create unnecessary friction. So, in an interview, check an applicant’s true motivation and reason for the applying for the role. Do they want to support, challenge and provide scrutiny? Or do they secretly want to take over?

It’s also important to be aware of the particular dynamics of non-executive appointments in a partnership management structure. In a company setting, a non-exec is on the board with clear duties and responsibilities. In a partnership, the position is more of an advisory role.

For experienced NED Nicola Sawford, this dynamic means NEDs in partnerships need to be adaptable.

“In a partnership, it’s not a decision-making role and you don’t have the responsibilities of a director. You’re often the only NED, which means you will need to have broad experience to contribute across all aspects of the business. Partnerships are set up differently, so you could be wearing a different hat depending on who you’re speaking with,” she said.

How to become an NED

Becoming an NED can be seen as a ‘soft landing’ for executives looking to move away from senior decision-making roles into more advisory ones. However, this can present a challenge in itself, says Yogendra.

“Creating an NED CV is very different to an executive one. Can you articulate your skills to make it understandable to someone outside your industry and line of work?

“Secondly, there will be a lot of failures. Often, you’ll be good enough for an NED role, but someone will fit better. It’s an interesting space to be in psychologically for someone used to being the CXO or the big cheese in a company and who is now being rejected,” she added.

Ultimately, it’s about building networks and developing your understanding of the role. This might mean starting small, with a role at a charity or school of governors. It’s also about understanding your skillset and how it can be applied to other industries.

“Don’t undervalue what you’ve done. Look at your experience so far and think about what you can offer as an NED,” advises Sawford.

To find out more about how Totum can support your NED search, visit our current NED opportunities or contact Tim Skipper directly [email protected]

To learn more about the Managing Partners’ Forum and its events, visit its site.