While many may associate the non-executive board advisor with large companies and big budgets, this couldn’t be further from the truth and is probably one of the best kept secrets of some of the country’s fastest growing small businesses.
Many small businesses, particularly if owner managed, may not bother to have board meetings at all – or if they do, they turn into long rambling affairs where nothing significant is achieved.
A non-exec will facilitate and chair board meetings outlining clear actions to give greater structure and accountability. As Marc Tobias, founding director of DMJ Recruitment points out, ‘Our non-exec made us realise the importance of our own accountability – having regular board meetings which he facilitates that have minutes and clear actions has made a real difference to the way the company is run.’
Appointing a non-executive who has had exposure to your business sector – and who has had experience of growing businesses themselves can give you the benefit of having someone on hand who has ‘been there and done it’.
It’s a bit like having a jigsaw puzzle but already knowing what the finished picture will look like. ‘One of the reasons we chose our non-executive director was because of the success he has had within the sector,’ says Martin Burnett, founding director of Cherry Professional. ‘He was recommended to us by a corporate finance adviser and the fact that he has “been there, done it and got the t-shirt” was an important factor in our decision,’ Burnett adds.
A good non-exec will have an extensive network which you can use to your advantage – invaluable if you are at an early stage. ‘Our non-exec’s contacts and his wide network have been very useful,’ says Burnett. ‘If we need a supplier or advice on a particular project, he will always know someone who can help.’
More on non-executive directors:
- How non-execs can help with development and succession
- The importance of regularly refreshing NEDs
- Are non-executives non-essential?
Knowing how and where to access funding can be an important part of an advisory role and making full use of government initiatives can be a bit of a minefield if you are new to it.
‘The non-exec involved with our company really surprised us with his knowledge of the funding available to companies like ourselves,’ explains Stephen Grainger, founding director of EasyWeb.
‘He has been instrumental in securing us government finance initiatives such as those available through the Growth Accelerator Programme.’
Nuts and bolts
While strategy and the big picture are crucial elements, SMEs can benefit from a fresh pair of eyes looking at the nuts and bolts of achieving financial targets. ‘A whole host of new business generation activities have been shared with us by our non-exec, which have been invaluable.’ adds Grainger.
‘He has a seemingly never ending bag of tools and tips that are valuable across the whole company.’
Running a business on your own can be lonely and so it is useful to be able to bounce ideas off someone external even it is only to confirm that you are on the right track with your thinking. And if there are a number of founding directors, emotion can often get in the way of strategic decision making and it is the independent view of a non-executive advisor which can make them so useful.
As Tobias of DMJ Recruitment says, ‘As three equal shareholders, every decision was extremely personal to us, and as we all had an emotional attachment to the company it could sometimes be difficult to see the bigger picture. This at times meant that we were hesitant to challenge the status quo and having an external adviser sitting on the board gave us that extra perspective that we had been missing.’
All of the companies mentioned above have achieved, and surpassed, their double digit growth targets – even during a recession. Investing in a non-exec advisor could well be the best decision you ever make.