Be careful what you wish for
Some thoughts on building a portfolio of Non-Executive Directorships
In modern sport, independent non-executive directors (INEDs) are now seen as increasingly vital positions across most major sports entities, such as international federations, national governing bodies, professional leagues, major events organising committees and other public-funded sports organisations.
Through my work with SRi – alongside partners such as the RFU, Football League, 2017 World Athletics, the Golf Foundation and Sports and Recreation Alliance – and with personal experience of numerous NED roles, I find myself often being asked for advice by executives wishing to develop a portfolio of INED appointments.
There are more areas to consider than may not, at first, be evident. What appears initially to be a fun, low time commitment role, with a level of kudos and prestige, can suddenly become the exact opposite of all those things when something goes wrong.
As an INED, there is the need to take a broad overview but not to become involved in detailed implementation. It is a real skill to be able to dip in and out of a Board and to achieve the right balance between contributing and being involved in the business, while at the same time not stepping on the executive team’s toes.
Know your subject
Make sure that you have sufficient understanding about the fundamental purpose and objectives of the organisation you are joining. Do you really understand the dynamics of their specific market, external factors which may affect it and the competitor environment? If you have doubts about this, then don’t do it.
Do you have a level of affinity, even affection, but above all else trust in the executive team and the other members of the Board? At the end of the day, you have to rely on information they give you and, if they so wish, it is maybe easy for vital facts to become hidden from you.
Keeping it local
To be effective as an INED you need to be geographically close enough to the Chair and CEO to be able to pop in for a chat; you need much more contact than just attending formal Board meetings – you need to be familiar. This is difficult to achieve if the journey to them is either long or complicated.
Finally, it is important to make sure that there are no surprises.
Due diligence should be done under the heading “Be careful what you wish for”. From my experience, there are two areas which must be addressed early in the selection process: time commitment and remuneration.
Right time, right experience
SRi’s recent experience is that what starts off as the estimated time requirement is nearly always badly underestimated. I advise candidates to really drill down on their time availability and question the Chair on what, realistically, they expect from their INEDs.
While remuneration is rarely high on an INED list of priorities, there is all too often a disconnect over fees, without a clear and early discussion to establish exactly what the incoming Board member can expect. Traditionally, sports Boards have been dominated by enthusiastic, unpaid volunteers, but as the need for Boards to bring in expertise capable of facing the challenges of the modern sport grows, it has become increasingly the norm to pay INEDs. This has also made it increasingly important to bring it those with the skills and experience required to contribute as an INED.
For those looking to build their experience, there are many considerable benefits as an INED. The challenge being faced by those with a successful track record of managing a portfolio of INEDs is ensuring they don’t overstretch their responsibilities – and be careful what they wish for!
To read more from Mike Squires’ full analysis of independent non-executive directors, please contact firstname.lastname@example.org.
Mike Squires is the Chairman of SRi, an international management consultancy and executive search company specialising in the sports, media and entertainment market. Mike has held senior posts within the executive search and sporting industries for more than 30 years. Since 2001, he has been actively involved in non-executive directorship roles, including at public-quoted firms, privately held companies, charitable trusts and education boards. He has held the role of Chairman at SRi since 2008.