How non-executive directors could drive business growth
In their bid for growth and prosperity, SMEs could boost their plans for the future by appointing non-executive directors (NED’s) to oversee strategies.
While some may question the value of such appointments, having individuals in these roles can ensure that a business remains on target.
Choosing the right NED can bring significant knowledge, skills and experience into a business.
The key to any appointment though, is the objectivity that they should provide when discussing key business decisions.
This should aid SMEs that are looking to deliver upon ambitious growth plans, providing the insight that is required when moving onto the next level.
An objective individual that focuses on strategy should be capable of identifying potential issues in any plans – vital to ensuring that cash flow can be maintained.
If a company feels it is lacking the required skills to process as a business then a NED could be an option.
While they would not be involved in the everyday running of a business, they would be able to keep a watchful eye on strategy and review if and when appropriate.
This critical input could then shape board level decisions and provide shareholders with a view of the business that they can trust.
Finding the ideal individual for the role is important as they will require the right mix of both commercial and business acumen, a proven track record, and a personality that fits the company.
Other issues may also exist if firms operate in sectors with stringent regulations – an understanding of those is also essential if the decision making process is to be effective.
Company values are reflected in the people that are employed by a specific firm, which is why fitting into company culture is so important.
That way a NED understands how a business operates and how it treats its customers – any strategies can then be developed in line with those values.
Identifying gaps in business practices or plans is a key part of managing a business and seeking help if that is not possible is essential.
Taking action should prevent financial issues from impacting negatively on a company, while reducing the likelihood of it requiring corporate recovery in the future.
A NED may suggest major changes to a business, but their objective viewpoint means such alterations should have the long term security of a business at heart.
By Phil Smith