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Opinion: One new year’s resolution manufacturers may want to add to their list
Gary Harding from BDO looks at why every company’s new year’s resolution should be to hire a non-executive director and explains why appointing a NED should be a priority for 2018.
Congratulations on successfully navigating another year of business – or perhaps it’s your first? The uncertain waters of recent years have certainly proved testing – and with 2018 expected to bring more of the same, thorough planning and pragmatic goal-setting will be more important than ever. It’s also a real opportunity for business leaders who are taking a proactive, positive and practical approach to developing strategies for future success.
The start of a new calendar year offers the perfect opportunity to take stock of successes and failures, but also to spend some time thinking about future goals and objectives, growth strategies and any potential obstacles.
If you haven’t already set a business resolution for 2018, now is the time to start thinking about what that might be – there’s one recommendation I urge all businesses, regardless of industry, regardless of size, to consider: the appointment of a non-executive director.
For many businesses, the appointment of a non-executive director (NED) may feel like an unnecessary expense – for some, it may feel like a distraction, detracting attention from the continuous juggling act that’s a prerequisite of life as an entrepreneur, director or business owner. Your objectives are set and you have a strategy in place to achieve them, so allocating budget for someone to come into the business and tell you how to do things may seem fruitless.
Businesses from start-ups to Plcs can benefit from utilising a NED. Of course there are certain sectors and profiles of business for which it is a legal requirement, but most businesses can derive value from selecting a good NED.
In my experience, the businesses that benefit the most from NEDs are those which know exactly what they are trying to achieve within the business and from the relationship. Sometimes this can be as simple as accessing a pool of contacts they wouldn’t be able to without a NED on board.
NEDs appreciate that tough questions sometimes need to be asked – when problems and challenges arise, business leaders are often too close to the issue so an objective, big picture view is hugely beneficial. NEDs often point out the route to better decision-making, identifying potential blind-spots or providing breadth of experience in core sectors. The right NED will take an experienced and level-headed approach to overcoming the obstacle. The best relationships tend to be those where there is mutual payback for the NED and business. Although some relationships are about accessing connections, those which exist on coaching, mentoring and a common challenge are, in my experience, the ones that thrive and succeed.
NEDs can also bring additional credibility to a business – often central in advance of a transaction or investment where the strength of the board or experience within a particular industry is important. Private equity funds and venture capitalists derive confidence from the involvement of a NED with a proven track record.
When setting resolutions for the New Year, whatever they may be, a NED may be the gatekeeper to success. Those businesses with the ability to shortcut opportunities and gain access to people and ideas that competitors cannot will reap the rewards.