Understanding the types of boards and roles in the UK

Unsurprisingly, each sector (Government; Private and Not for Profit) have different sorts of board opportunities, all of which have different degrees of governance responsibilities risk and also the rewards. In this article, we will look at the types of opportunities that are available. Understanding where board opportunities exist will help you find them.

Types of Boards, their Roles, Responsibilities and Liabilities

Non-Executive Directors: generally found in formalised companies/organisations listed through Companies House or the Charities Commission. They are often elected by the company’s shareholders and are responsible for the performance of the organisation, and its compliance. NEDs on these boards have fiduciary responsibilities to shareholders, which carry with them risk of liability, especially if risk oversight by directors isn’t prioritised.

Advisory Boards: a group of people selected to help a business owner on any number of business matters. Usually unofficial (i.e. not made up of formalised company directors listed through Companies House or the Charities Commission) and do not generally have authority to vote on corporate matters, nor carry a legal fiduciary responsibility. This can be a good progression to gain experience about governance for landing a board seat for a public company (or to end up on a public company’s board if the company’s exit strategy is an Initial Public Offering (IPO) during the time you serve on the board). You can also be exposed to an M&A from either side. Unlike the other types of boards, advisory boards members do not have a fiduciary duty. If you join an Advisory Board, be clear about what your role is and what is expected of you.

Management Committees: also sometimes known as a ‘council’, or just a ‘committee’, people elected by an organisation’s members to represent and advance their interests. Usually, be found in smaller organisations such as not-for-profits and sporting clubs. The role and responsibilities are not dissimilar to that of a board of directors though may also have a greater role in day-to-day activities.

Board Sub-Committees: Generally made up of board members, committees can also have independent members (i.e. non-board members). The board retains ultimate responsibility for any actions made by the committee. Common committees include audit, risk management, remuneration, compliance, nomination, and governance, fundraising, marketing, strategy, finance, membership, Fundraising.

Board of Trustees: are very similar to a Board of Directors. You may likely see a Board of Trustees of organisations such as museums, universities, large government-owned public facilities, charities, and some financial services organisations. Responsible for holding “in-trust” the funds, assets or property that belong to others with a fiduciary duty to protect them.”

Value Add Directors: is a title given to individuals who have invested in a business and gained a seat on the board as a result. Whilst they carry legal fiduciary responsibility from a recruitment perspective these appointments do not carry the same weight as an advisory board or non-executive appointment.

Government Board/Council Members: Government boards may take the form of a formal board, but they can also take the form of appointed advisory committees, commissions, or task forces. Nominating committees of government boards sometimes have criteria that they have to follow when appointing board members, such as appointing a certain number of government employees from designated agencies, and others who are experts, advocates, or citizens. Some mandates require that some or all board positions be appointed by government officials. Members of government boards usually have term limits, which are staggered with the term limits of other board members. To be appointed, some boards and committees require Ministerial or Cabinet approval.

In Summary

Board Appointments can be life and career-changing. Studies have shown that people who have Board Directorships: are more appointable, earn more, are unemployed less and have better networks and connections. They are also able to future proof their careers better, have more successful retirements and weather unexpected career changes strongly. So, regardless of where you are in your career – starting out, considering retirement, considering a career change or an experienced executive – a board appointment must be part of your career plan and professional development.

So, regardless of your level of experience and scale of your aspirations (a paid, voluntary, commercial, government or an NfP board role) and whether it is your first, a subsequent or, a more significant board appointment that you desire, there is a board for you. What type of board that is is an important question you should be asking; the answer must balance your aspirations against the reality of your appointment. However, studies have also found that the first board appointment you accept might define your board career, so it’s important to have a plan before you embark on your search for an appointment. If you’re having trouble figuring out exactly where you would like to take your board career, get in contact. We specialise in helping you define and realise your board aspirations.

Find out more about how we can help here.

About the Author

David Schwarz is CEO & Founder of Board Appointments – The UK’s leading board advertising and non-executive career support firm. He has over a decade of experience of putting people on boards as an international headhunter and a non-executive recruiter and has interviewed over one thousand non-executives and placed hundreds into some of the most significant public, private and NFP roles in the world.

Leave a Reply