The seven rewards of gaining a non-executive appointment

Whilst any board appointment in Australia will incur some risks, for most, the rewards of taking on a board directorship far outweigh these risks – at least seven in particular. If you have been a Non-Executive Director (NED) before, you will know what they are already. If you don’t, read on.

The seven rewards experienced by those who hold a non-executive board role

Career Development

Sitting on a board gives you an insight into board-level decision-making and the dynamics of strategic relationships. Even though every board is different, as a new non-executive, you will quickly learn where the levers are and how they influence your board’s decision-making.

Career development is about more than just climbing the corporate ladder. It is crucial for individuals seeking to advance and grow professionally to focus on learning continuously, acquiring new skills, and gaining relevant experience to enhance one’s career prospects. Board and committee roles provide opportunities to engage in these activities. 

Strategic Experience

As a board and past executive recruiter, one of the questions I typically ask aspiring executives is to provide evidence of their strategic experience. The keyword here is evidence. A significant number of individuals encounter difficulty with this particular task. However, individuals serving on boards often have a prepared response emphasising their strategic abilities and ability to collaborate with senior leaders. Individuals without board experience face difficulties showcasing their skills at the strategic level and may be at a disadvantage compared to those with prior experience.

Relationship Building

I commonly find that there are two great ways to develop valued professional and personal relationships: participating in team sports or sitting on boards or committees together. Of course, there are others, but in both these cases, you are a group of disparate individuals coming together to achieve a common outcome. I firmly believe there are few better ways to get to know people than sitting around a board table, discussing issues everyone is passionate about. The relationships formed often turn into new business, career or personal opportunities. Whilst serving in unpaid NED roles, I have always earned some income due to the relationships formed at the board level.

Giving Back

One of the things I hear most from people when I ask them why they want to join a board is, “I want to give back”. Every time I hear it, it sounds a bit clichéd, but it is an accurate statement that many people on boards instinctively understand. There is also plenty of evidence and advocates supporting the personal benefits experienced from giving back.

Remuneration

A defining reward that many seek from a board or committee appointment is that, for many roles, you can get paid. I have written about how much you can expect to be remunerated for sitting on a board. For some, it is a nice reward, but for others, supporting their portfolio career or seeing them through retirement remuneration is essential. It should be noted that even unremunerated or voluntary board roles can have financial benefits. As I mentioned earlier, I have never been paid for my board work, but I have always received some financial reward through the relationships and experience I have gained as a non-executive director.

Professional Transitions

Many seek board experience as a fallback or preparation for executive transitions or post-executive life. Having been through the Global Financial Crises as a recruiter, I can put my hand on my heart and tell you that it was because of my board experience that I was never unemployed during that period. Unlike most, my salary and professional experience increased during that time.

For senior executives, non-executive director roles assist with transitioning to retirement or semi-retirement. This allows them to step away from the stress of a full-time executive role, still earn an income, add value to an organisation, and share their knowledge and expertise.

Your Brand & Profile

It is estimated that just 5% of adults hold a board appointment. So, whilst no one should accept a board appointment based on status alone, the elevation of your profile is a handy by-product. The title of being a ‘NED’ can open doors otherwise locked. It can give you access to those you would not usually have the opportunity to speak with – increasing your brand and access to otherwise inaccessible opportunities.

This sums it up nicely

According to a recent study by Harvard Business Review, serving on a board increases the likelihood of executive promotion by 44% and leads to a 13% annual increase in pay, even if promotion does not occur. 

There are compelling reasons to consider a board appointment. Board appointments are indicative of strategic success and imply the ability to work at a high level and possess a broader perspective than one may gain in an executive position. Research has found that individuals who hold board directorships in addition to an executive role experience increased employability, higher earnings, decreased unemployment rates, and enhanced personal and professional networks. Additionally, individuals are able to enhance their career prospects, secure more stable retirements, and handle unforeseen career transitions more effectively.

So, in my mind, the question is not ‘Is a board appointment worth the risk?’ but rather, ‘How do I find board opportunities with the right rewards for me?’ This is something that Board Direction can help you solve. As an Executive Member, we will show you a simple, easy-to-implement process to get you appointed.

Relevant Articles

What is a Non-Executive Director in Australia, and what are the risks?

Directors Remuneration – How much do Board Members get paid?