How much time do I need to dedicate to serve as a Non-Executive Director (NED)? I am often asked this question. As is often the case, the answer is ‘it depends’. As a general guide, a minimum of two days a month is a reasonable figure to have in mind. More certainly, I know that if you are not passionate about the role and your contribution, you will resent any time you do spend. This article explains how those two days break down, because being a NED involves much more than attending scheduled board meetings.
Expected time commitment
The role of the non-executive director is not one to be taken lightly. Most acknowledge that the time commitment required to serve as a conscientious Non-Executive Director (NED) is worth it; many underestimate what it truly involves. For this reason, it is important to commit to the boards of organisations that you are truly passionate about. If you don’t, you will end up resenting any time you give. Exactly how many hours a month, in total, will vary depending on many factors, but it often looks like this…
Board Meetings: A typical board meets between 4-11 times a year and usually lasts 3-4 hours, with some lasting up to 6 hours.
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 or quarter, while others must meet monthly. The time commitment can be significant during particularly busy periods or crises. If you are part of a sub-committee that meets in alternate months, you should expect to spend considerable hours preparing for and participating in these committees.
Meeting Preparation: A big part of an effective NED’s time investment 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. Even short packs are likely to contain complex material, and preparation time can still be considerable.
There are a couple of ways to handle this. One portfolio NED I knew engaged specialist grad students to review the board packs he was required to read and provide summaries for him to review and questions for him to ask during the board meeting – confidentiality issues aside (which he was able to manage), I thought this was a clever solution. Today AI can review packs as well, but you should be careful; we have all seen media reports about how an overreliance on AI can lead to misinformation and reputational damage.
So, depending on how big your brain is, your personal time management, and the complexity and length of the board packs, your preparation will likely take longer than you think. Some NEDs I know read their packs twice over two days with a ‘good sleep’ in between. So as a general rule, I think preparation for board meetings takes as long as the board meetings themselves – say 4 hrs or maybe considerably longer.
External ‘Board Meetings’: Many successful NEDs will say that the ‘real board meeting’ is not the formal one. Instead, decisions are often made or opinions formed prior to the meeting by having discussions with the chair and other board members ‘off line’. Big decisions/opinions are then discussed and ratified during the meeting itself. So, expect these conversations and always make time for them. I would expect at least a couple of hours a month for these conversations.
Travel: Physical board meetings are still part and parcel of being a NED. While attendance at board meetings is often virtual, assume at least 50% of board meetings will be ‘in-person’. That means you need to account for travel to and from board meetings. This travel time itself can far outweigh the time the board meetings take – particularly if you are travelling from out of state.
For example, we recently recruited 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. Travelling to a Pacific island might seem fun, but at what cost?
Professional Development: 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 – upskilling yourself in this case is critical. That takes time and comes at a financial cost. Factor in further and ongoing governance training, and the time required to complete professional development.
Annual General Meetings (AGM): AGMs take place annually, and all board directors, including NEDs, are expected to 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.
Board Retreats and Strategy Days: Corporate strategy days or weekends are not uncommon. Due to the nature of these events, in-person participation is often essential.
Extra-Professional Activities: Good NEDs don’t just prepare for and contribute at 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.
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 (when they are paid) about twice as much as a NED, but in my experience, they work three times as 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. This is also the case for the Chairs of sub-committees.
Passion will make it all worth it
In total, 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 at 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 and requires 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.
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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.
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