Above it all

To be fair, £177K isn't typical. It's what the industry's best paid non-executive director, Sir Neville Simms of Carillion took home. But the good news is his job's up for grabs. He announced last month that he was going to stand down from his role as non-executive chairman next year.

If that seems a little ambitious, there are plenty of smaller firms and charities looking for a non-executive director, or NED. The pay will certainly be more modest than Sir Neville's, but you get more than just cash out of such a post. Being a NED can be interesting: you get to grips with another business and they get the benefit of your experience.

Just what does a NED do? That depends on the organisation. For public listed companies (plcs) the role of a non-executive board member is well defined – and well paid. For private companies the role can vary from a short-term contract during a period of change to an ongoing role on the board.

The exact nature of the role of the non-executive director in plcs came under the spotlight following the collapse of US energy firm Enron. The company was found to have been manipulating its figures with the knowledge of accountant Arthur Andersen, which also went out of business. Enron's NEDs were criticised for failing to police the errant executives adequately. The concept of the NED became something of a hot topic, so much so that in April 2002 the Treasury and the Department for Trade and Industry (DTI) asked Derek Higgs, an investment banker, to look into the role of NEDs. The government cares because it believes that strong boards lead to good management and that reduces the risk of failures, which can trigger dips in the financial markets, or worse.

Higgs recommended that at least half of the board should be non-executive directors. The report also made clear what the responsibilities of a NED are. Higgs said that a NED should advise and direct senior management on its strategy and monitor how well it is implementing that strategy. Non-executive directors should also monitor a company's legal and ethical performance and how it reports financially. It's their job to remove senior managers if they don't think they're doing a good job.

The result has been that companies have been forced to stump up a better salary for their NEDs. A survey by Incomes Data Service (IDS) in May found that the average salary for a non-executive director with a FTSE 100 company had risen one-third over the last year to £40,000.

What you'll need
To be eligible for a plc post you need pretty heavy-weight experience. Independent Direction, a firm which specialises in recruiting non-executive directors for smaller listed and private firms wants candidates with at least one of the following backgrounds: CEO or FD in a private company with a turnover of £20m-plus; senior level partnership in a major professional firm; proven track record and range of contacts in the fund management community; or in-depth board level experience.

If that doesn't sound like you, there's still hope. The majority of non-executive directorships up for grabs are with small, private firms according to Raymond Fox who runs the Non-Executive Directorship Exchange (NEDexchange), an online service for people seeking out such positions. Fox set up his service in 1999 when he was looking for a NED position himself and discovered that there was nothing geared towards candidates.

Fox gets requests for two types of NED. One is very specific. A firm wants somebody with experience of a particular industry and even a specific area within that industry. 'We are a pharmaceutical company looking for a non-executive who has experience in polymer research'. The second type is what Fox calls the 'grey haired and wisdom' non-executive, "Someone who has been round the park a little bit," says Fox, "who can cut through the crap that senior management can come out with. Someone with brains and balls."

Higgs pinpointed some characteristics which a non-executive director should have: integrity and high ethical standards, sound judgement, the ability and willingness to challenge and probe and strong interpersonal skills.

You don't have to be old, either. Most of the 70 people whose details Fox holds are aged between 45 and 55. Often they are self-employed consultants who may have one or two non-executive directorships. However there isn't a lower age limit – or an upper one. Retired people can make very good NEDs.

Non-executive directors can cut through the crap that senior management comeS out with

Raymond Fox

Don't expect astronomical day rates, though. Fox, an ex-company and legal secretary for Dunn & Bradstreet charges himself out at his consultancy day rate of £1,000, but the pay can be double that, half that, or even less. The range of renumeration is as wide as the range of firms and roles.

Raise your profile
Here's an example from a website 'The non-executive director' which would suit someone from the construction sector. The Housing Corporation is looking for board members to work four to five days a month. It wants people with leadership experience gained in the broader local government community and in-depth knowledge of procurement or supply chain management. Salary: £11,000.

Some non-executive directorships pay nothing at all. For example those on housing associations, church groups or NHS Trusts. Such posts can be a good place to get your foot in the non-executive door while you are working full-time and can be sold to your current employer as a way of widening your skills and experience while putting something back into the community.

For some people being a NED is a full-time job, because they have several posts. Struan Robertson, 53, who held senior posts within BP during his first career, stepped down from his job as Wates CEO in January "to concentrate on his portfolio of non-executive directorships". He is a NED for WS Atkins and Forth Ports.

So how can you prepare yourself for a seat on the board? Honing your skills with voluntary positions is a start. And you'll have to demonstrate a good track-record in the day job. If you don't know one end of a balance sheet from the other, get some financial training.

The next thing is to work on your profile. Writing an in-depth report for the government would be a good start. Michael Latham, as well as being chairman of CITB Construction Skills holds three non-executive posts as deputy chairman of Wilmott Dixon and BIW Technolohies and non-exec chairman of the Collaborative Working Centre. Up until last year he was a NED with legal consultancy JR Knowles.

A more realistic approach would be to start putting yourself about at conferences and meetings. Join a local business chamber, write articles for trade press or local papers.

Above all, you must network because this is the best way to hear about NED opportunities. Steve Brown (see 'How I got the gig', page 31) landed the role thanks to his networks. "It came via someone I knew already who thought it might be of interest to me, given my experience and background. He was aware I was building a small portfolio of non-executive directorships in companies where I could make a real contribution," says Brown. NMC chose him because of his corporate experience and because of the perspective he could bring as a former client. Brown's background is in the leisure sector.

Does that mean someone with a construction background could sit on the board of a casino firm, say? Probably not, is Fox's feeling, unless you have transferable skills such as accountancy, law or HR. "If all you know is the construction trade, you might not have a skill set you can transfer, but you can look at suppliers to construction or customers of construction."

If you think you have the experience and character to make a good NED, there are several websites where you can tout your wares. We've listed three below. Happy hunting.