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Non-Executive vs. Executive Directors

Updated: Jan 21, 2022

What is a Non-Executive Director (NED) & how do they differ from an Executive Director (ED)? 🤔

What distinguishes NED's from ED’s is that NED's are NOT company employees (even though they are remunerated) and they have no previous or current ties to the company in the form of past or current employment or family connections within the company. (Though NED’s share the same legal duties and potential liabilities as ED’s.)

👉 The main role of an NED is an IMPARTIAL, OBJECTIVE and BROAD PERSPECTIVE of the company and its team, especially high-level management such as CEO’s and ED’s.

NED’s are there to make creative contributions concerning sensitive issues such as the strategic direction of the company, risk management, appointing and monitoring board members and remuneration of executive directors and senior managers.

The company’s day-to-day processes are not part of an NED’s responsibilities, though they are encouraged to participate in committee meetings. Ensuring audit requirements are satisfied often falls under the NED’s duties.

NED’s are there to provide dispassionate and objective criticism about the company’s structure, strategy and performance while challenging, questioning and monitoring CEO’s and senior management. 🙌

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