Finding time to secure a board role is one thing; finding the time to deliver on the reason for your appointment is something else again. While most acknowledge that the time commitment required to serve as a conscientious Non-Exective Director (NED) is worth it, they often underestimate what it truly involves. It is much more than simply attending scheduled board meetings and the preparation for them. So, how much time do you need to dedicate to serve as a NED? As is often the case, the answer is ‘it depends’, but as a general guide, a minimum of two days a month is a reasonable figure to have in mind.
Let’s break down a Non-Executive Director’s time commitment
The role of the non-executive director is not one to be taken lightly. NEDs are not only expected to attend board meetings, but they also have to communicate regularly with the rest of the board outside of these formal meetings. There are also several other time-consuming components that many fail to consider. Exactly how many hours a month, in total, will vary depending on many extenuating circumstances.
Meeting Preparation: A big part of the time investment of an effective NED is pre-meeting preparation. Namely, obtaining board papers in advance, researching, and conducting pre-board discussions on the agenda items. Board packs can sometimes run into many hundreds of pages. Reading these, let alone comprehending and critiquing them, can take many hours. Don’t be fooled by short packs. They may contain complex material, with preparation time still being considerable. Depending on personal time-management abilities and the specific nature of the industry, this preparation may take from a couple of hours up to, cumulatively, a couple of days for each one-time event.
External ‘Board Meetings’: Many successful NEDs will say that the ‘real board meeting’ does not happen during the official board meeting. Instead, decisions are often made or opinions formed prior to the meeting. These decisions are then ratified during the meeting itself. So, expect to have these conversations and always dedicate time to them.
Travel: Even in our post-Covid digital age, physical board meetings are still part and parcel of being a NED. Whilst attendance at board meetings is often possible digitally, it should be assumed that at least 50% of board meetings will be ‘in-person’. That means travel to and from board meetings needs to be accounted for. In many cases, this travel time can, cumulatively, be as long as the meeting itself. So set aside time to travel – not doing so catches many NEDs out. As a real example, recently, we were recruiting for an organisation in the Pacific that required several new NEDs. They stipulated that at least three board meetings per year required in-person attendance. This was regardless of where the board members were located. Australians were encouraged to apply for the role, so if successful, travel time would be at least 12 hours each way, three times per year.
Governance Training: As a non-executive director, you should be dedicated to continually developing your governance skills – both for your benefit and the benefit of the organisation you serve. A good example is that all board directors are required to sign off on annual accounts, yet some NEDs are not as financially literate as they should be to analyse these reports. Governance training and the time required to complete courses should be factored into your thinking.
Board Meetings: A typical board meets between 4-10 times a year and usually lasts 3-4 hours, with some lasting up to 6 hours.
Annual General Meetings (AGM) and Strategy Days: These typically take place annually, and it is expected that all board directors, including NEDs, attend. An AGM is often scheduled not long after a board meeting. However, depending on the agenda and the number of questions raised by attending shareholders, it could require up to a six-hour commitment. Corporate strategy days are often full-day or even multi-day events. Due to the nature of these events, in-person participation is essential.
Extra-Professional Activities: Proactive NEDs don’t just prepare for and contribute to board meetings. They learn and grow by actively participating in various aspects of the organisation itself. They may regularly meet with staff from all levels of the organisation, attend events hosted by the organisation, represent the organisation at external events, get involved in fundraising, or lobby or network on behalf of the organisation. That all takes time.
Sub-Committees: Often, NEDs are also required to attend or chair sub-committees. Some NEDs might be on just one committee, others two or three. Each can be as onerous as a board meeting with the same time commitment and preparation involved. Some of these committees meet every other month, while others are required to meet monthly. The time commitment required during particularly busy periods or crises can be significant. If you are part of a sub-committee that meets in alternative months, you should expect to spend a minimum of 4 hours each preparing for and participating.
Chair Roles: If you are considering a chair appointment, you probably know that chairs work harder and longer hours than the other board directors. Yes, they usually get paid about 50% more, but in my experience, they work three times as hard and long. That means at least doubling the time spent preparing for board meetings, speaking with other Directors and the CEO, and overseeing (and at times attending) all sub-committees.
Time, but more so passion, is important
Most board roles require around two days of formal participation per month. However, taking into consideration that a NED is likely to participate in informal discussions outside of board meetings, be part of a number of sub-committees, and attend industry events and strategy days, in addition to the travel, preparation and attendance to board meetings, the overall time commitment might be as high as, 40 days annually. If you are in a paid NED role, converting this into an hourly rate is not great. It is even worse if you are the board chair!
For all these reasons, passion is key to being a committed non-executive director. In my experience, successful NEDs are passionate about the organisations they serve and how they can contribute. This makes whatever time they spend serving on, and for the boards they represent enjoyable and valuable.
In Conclusion
The time commitment for a Non-Executive Director (NED) is significant, requiring dedication and passion. It goes beyond attending board meetings and includes preparation, travel, professional development, and potential involvement in sub-committees. While the formal commitment might be around two days per month, the actual time invested can be much higher, reaching up to 40 days annually. Despite the demanding schedule, the role of a NED can be fulfilling and significantly rewarding in several ways. Ultimately, the key to success lies in not underestimating the time commitments of the role and practising solid time management skills to ensure you can effectively balance your NED responsibilities with your other commitments.
Related Articles
What is a Non-Executive Director in Australia and what are the risks?
Want to apply for a board chair role? What you should know
Directors Remuneration – How much do Board Members get paid?
About the Author
David Schwarz is CEO & Founder of Board Direction – Australia’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
Share this article on your favourite platform!
