The 7 rewards of non-executive directorships

For some, when considering a board career or who are offered the opportunity to join a board, their first thought is often, ‘No, why would I?’. For them, the reputational, financial, and personal risks are difficult to get past. Of course, any board role comes with some level of risk – that’s part of the job, but for the vast majority of people, the rewards of non-executive board directorships far outweigh those risks. Indeed, for every individual who says no to a board appointment because of these risks, there are literally thousands of others who would take the appointment if it was offered to them. The highly competitive process most face in gaining a board appointment attests to this. As I see it, there are numerous reasons for this.

The 7 rewards non-executive directorships

If you haven’t considered a non-executive director (NED) appointment, you should. A study from Harvard Business Review found that serving on a board increases an executive’s likelihood of being promoted by 44%, and even if they weren’t promoted, their annual pay increased by 13%. Further studies have shown that those who hold a NED appointment in addition to an executive role have greater job security and are unemployed less. Sitting on a board can also help future proof your career, prepare for retirement, redundancy or a career change. Board appointments also help you work more effectively with your own board and facilitate new connections – useful for both business development and pleasure. A board appointment today, more than ever, should be part of your career plan.

Here are the seven rewards a board appointment offers.

1) Career progression

Anyone who has reported to a board recognises that their decision-making is done in a particular way. Having a board appointment gives you an insight into how these decisions are made intimately. It offers an opportunity for you to first hand experience what the levers are that need to be pulled/influenced in order to get decisions passed by the board. As such, a board appointment of your own can help you work with your own board more effectively, it can help you better engage with them and, as such, be more respected by board members. When summed up, it means that your career will progress much more smoothly and be less likely to have a ‘ceiling’. 

2) Gaining strategic management experience

When I was a board recruiter, one of the questions I asked aspiring CEOs, Directors or NEDs was to evidence their strategic experience. The keyword here is evidence. Most executives fail this task because they only have operational experience. However, those who sit on boards are more than capable of answering this question. They can articulate their strategic ability and experience working at a senior level. Those without board experience struggle to evidence their strategic capabilities (even if they do have them) and suffer compared to those who can.

3) Relationship building

Sitting on a board provides a unique environment to build and nurture personal and professional relationships with people you may not otherwise cross paths with. As a board or committee, you are a group of disparate individuals coming together to achieve common outcomes. There are few better ways to get to know people than sitting around a board table discussing issues everyone is passionate about. The relationships formed often result in new business or professional opportunities. On a personal note, even as an unpaid NED, I have consistently earned income as a result of relationships developed with my fellow board members.

4) The Opportunity to give back

I hear most from people that they want to join a board to give back to their community, causes or industries. For me, it sounds clichéd, but the truth is, for many, it is the underlying reason they serve on boards or committees. This has its own set of rewards, including improving your well-being.

Others receive personal satisfaction from contributing to important strategic decisions that ultimately lead to positive outcomes for the organisation they represent.

5) Financial reward – remuneration

You can get paid well to serve on a board or committee. I have written previously about how much you can expect to be remunerated as a non-executive director in the UK. This additional income source is vital to many and can help you during uncertain times or during retirement. It should be noted that even unremunerated/voluntary board roles can have a financial reward. I have never been paid for any of my board work, but I have always received some form of financial reward through the relationships and experience I have gained as a non-executive director.

6) Facilitating professional transitions

Many people seek board roles as a fallback or in preparation for post-executive life. Having been through the GFC in the UK as a recruiter, I can put my hand on my heart and tell you that it was because of my board experience that I was never unemployed in that period. In fact, my salary and professional experience increased during this period.

Those considering retirement see board appointments as an opportunity to stay connected and relevant and share their valuable experience, whether in paid or unpaid board roles.

7) Personal brand and gravitas

It is estimated that as little as just 5% of the population holds a board appointment. Therefore, many consider it elite status. I do not recommend that you seek a board appointment on that basis alone, but it may enhance your professional and social profile. Just the title of being a ‘NED’ may open doors. It can give you access to those you would not usually have the opportunity to speak with. This, in turn, increases your professional and personal brand.

In Summary

There are numerous reasons for not pursuing a board appointment, but in my opinion, the rewards of being a non-executive director far outweigh the risks – and thousands and thousands of NEDs agree with me. Studies have shown that people with a board role and an executive role are more appointable, earn more, are unemployed less and have stronger business and professional networks. Board roles can also help to future-proof careers, have more successful retirements and be more versatile in dealing with career changes. 

So, in my mind, the question is not “Is a board appointment worth the risk?” but rather “How do I find board opportunities that will provide me with the rewards I seek?”. This is something that Board Appointments can help you solve by leading you through a simple, easy-to-implement process to get you the right board appointment.

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