Most adverts for non-executive directors state how many days a month or a year the role will take. That is less simple than it sounds, because NED work rarely fits into neat days.
In one month, for example, you might spend:
- seven hours preparing for a board meeting
- a full day at the meeting
- two hours on emails, including thinking time
- an hour on the phone with a fellow director.
The next month might look completely different.
Because NEDs do not usually keep timesheets, boards find it hard to say exactly how much time their current NEDs give the role, let alone predict what it will need in future. Nobody knows what the coming year holds for the organisation, so the time needed may well turn out to be more than expected.
As a broad guide, organisations other than listed companies typically ask NEDs to commit between one and four days a month, and chairs between two and nine days a month. In private companies the figure is usually around two days a month.
Why the time required keeps growing
A common misconception is that NEDs earn a large fee for a few days a month. In practice many NEDs work more hours than ever, often well beyond what they first committed to, because the scope of board responsibility has been widening for years.
Today’s pressing issues include:
- meeting regulatory requirements
- expectations of stakeholder engagement
- cyber security
- disruptive technologies, AI above all
- human capital management
- company culture
- environmental, social and governance (ESG) matters
- equality, diversity and inclusion.
Dealing with these often means extra meetings, more committees, more preparation on unfamiliar topics, and continual investment of time and money in learning.
NED fees are a flat annual rate with no bonus. Executives may see extra effort rewarded at the year end, but NEDs do not get a pay rise for the extra hours. If the time required rises sharply, the effective hourly rate falls, in extreme cases to very little indeed.
How NEDs spend their time
A useful way to analyse the commitment is to split it into three parts:
- planned contact time: board meetings, strategy days and committee meetings
- preparation and personal time: reading board papers and researching the business and its markets
- unplanned contact time: calls, emails and extra one-to-one meetings with the executive team.
Planned contact time
Make sure you can set this time aside alongside your other fixed commitments, especially if you will need time out of a full-time job.
- Board meetings and AGMs. Dates are usually set before the year starts, and boards may give them in the advert, at interview or in the offer. Most boards meet for between three hours and a full day, four to ten times a year.
- Strategy days. Expect one or two a year to develop and debate strategy, sometimes away from the usual venue and involving an overnight stay.
- Committee meetings. Most NEDs join at least one committee. Its meetings tend to be shorter and less frequent than board meetings.
Preparation and personal time
You will have a fair amount of freedom over when you do the following:
- Board meeting preparation. Board packs can run to hundreds of pages, especially in regulated businesses. NEDs spend anything from a couple of hours to two days preparing for each meeting.
- Thinking time. Sometimes what matters is not what is in the pack but what is missing from it. Allow time to reflect on the organisation, its senior team and their performance.
- Research. You will not have every answer and nobody expects you to, but you will need to take part in decisions across a wide range of subjects. Where you are less confident, read up independently or talk to fellow directors before the meeting. You need to know enough to make a decision you are comfortable with, because if something goes wrong the liability sits with the board collectively.
- Continuing professional development. Keep building your skills as an NED, whether in governance, the company’s markets, or topics such as cyber risk and AI.
Unplanned contact time
The liability and responsibility that come with the role mean you are expected to give whatever it takes to do it well, at any time of year. That includes work that is hard to plan for:
- Ad hoc meetings. Many boards talk between formal meetings when a time-sensitive matter comes up.
- Emails. You will be expected to keep up with correspondence between board members.
- One-to-one meetings with executive directors and other NEDs. These help you understand the culture and build rapport with the leadership team, who may want to use you as a sounding board.
- Induction. Allow extra time when you first join. Board meetings are infrequent, so it can take a while to feel established unless you make a real effort early on. Do suggest what would help you.
- Events. As well as challenging the board when needed, a good NED supports the executives. Attending company events and key conferences is one way to show it.
- Annual appraisal. Usually a one-to-one with the chair, sometimes alongside a board evaluation and skills review.
Questions to ask yourself before you apply
- Do I clearly understand what the role requires, including both planned and additional time?
- Can I meet the time requirement alongside my other commitments?
- Can I handle switching between several roles and inboxes?
- Do I believe in this organisation and its people enough to keep going when the role demands more than the expected hours?
- Do I need permission from any current appointment to take this on?
- How will I show the board that I am committed, and that I have thought through how I will manage my other responsibilities?
I sit on the board side of this question as a Non-Executive Director and Board Adviser to private, PE-backed and growth-stage businesses in consumer goods, industrial and technology sectors. More on how I work with boards is on the Board Advisory and NED page.