Non-Executive Director jargon

Trying to get your head around the difference between a Non-Executive Director, iNED, Commissioner, Associate Non-Exec or Trustee?

The range of roles can make the process of looking for one feel overwhelming. We post c.100 non-executive roles a month on Dynamic Boards and they have a broad variety of titles.

What do all the roles we show you on Dynamic Boards have in common? They are all non-executive, and they are all paid roles.

In the latest in our demystifying series, we shed a light on what’s behind the jargon. Here’s a guide to different kinds of board role titles you might find:

 

Non-Executive Director
aka NED, Independent Non-Executive Director (INED or iNED), Independent director

These all mean the same thing. Let’s break the role down into its three components: non-executive, director, and independent.  What’s the difference between Non-Executive and Executive Directors? The Non-Executives are not employees and aren’t involved in the day to day running of the organisation like a CEO/ FD would be, they are brought in for governance, accountability, and an alternative perspective on the business. But Executive Directors and Non-Executive Directors share one important thing in common: if you are a formal director of the company, you are all equally liable for the actions of the organisation. Non Execs bring an independent view, and don’t have any other formal relationship with the organisation. They aren’t a significant shareholder or investor, an ex or current employee, etc. Some companies might have non-executive, non-independent directors, for example if an investor has a position on the board (e.g. Starling Bank has Investor Directors). 

Examples – Lots of different types of organisations have non-executive directors. For example: see the board of listed company Amigo Holdings Plc, and housing association Watford Community Housing.

 

Chair
aka Chairperson, or Chairman/ Chairwoman (we prefer ‘Chair’) 

The Chair is the most senior role on a board, and the person who is responsible for leading the board meetings. Why is it called the Chair? Well, one explanation is if you meet physically on a long boardroom table the person in the chair at the head of the table gets the best vantage point to see everyone and be seen.  We don’t know if that’s why, but it’d make sense!

In the UK Chairs are often independent board members (the UK Corporate Governance Code promotes this as good practice). In smaller companies they might have a more executive (and less independent) role. 

Example – Admiral Plc 

 

Chair of the […] Committee
Committee chairs lead a committee of board directors, which has delegated responsibility for something specific and reports into the board. 

The most common committee is Audit, (sometimes combined with Risk to make the ARC – the Audit and Risk Committee) which is responsible for audit, financial reporting, internal controls and often this includes risk, too. In the public sector or charity sector it can be common to have committees that aren’t made up of board members, they are just a committee in their own right. If you’re looking at a committee role, make sure you have a sense of whether the role is for someone who is on the board and in a committee, or if it’s just a member of the sub-committee. Often sub committee members are also members of the main board, but not always, so it’s worth establishing this. 

Example – Isle of Wight NHS Trust has a committee membership summary here.

 

Senior Independent Director
aka SID

Common in financial services and on listed company boards but much less common in smaller organisations. Their role is to support the Chair and act as an intermediary between the other non-execs and the chairs when required. For example, the SID will lead the non-execs in their annual appraisal of the Chair. 

Example – Lloyds Banking group has a SID

 

Vice Chair
aka Deputy Chair

This might be someone in line to take the chair role in the future, or may have some of the chair responsibilities delegated to them. At the very least, it’s good to know who takes the Chair role if they are unavailable and having a designated Vice Chair provides clarity on this.

Example – Cardiff and Vale University Health Board has a Vice Chair. 

 

Board Advisor
aka Non-Executive Board Advisor, Independent Advisor

A Board advisor can have the input and contribution of a non-executive director, but without the legal structure of being a director. This is brilliant for start-ups, or for organisations that have ownership structures that currently prevent them from taking on Non-Executive Directors. They also allow organisations to gain the fresh perspective and influence of a non-exec without giving away any decision-making authority. The big difference for you is that board advisors don’t have director (voting) rights or liabilities; they aren’t legally responsible for the company like directors are. We can see UK organisations having more of Board Advisors in the months and years to come. 

Example – We interviewed start-up Bower Collective about their board advisor vacancy in 2020 you can hear what they were looking for here

 

Associate Non-Executive Director

They attend board meetings, are paid for their time, but are not legal directors and do not have voting rights yet. There will usually be an opportunity for associates to become fully fledged non-executive directors later, after a year or two as an associate. This is a great way for you to get experience as a non-executive director in a lower risk role, but with full attendance at board meetings, and additional training and support. In short, it allows you to test out the NED role without usual legal commitment, and the organisation to see whether you would make a good board member too. 

Examples: This is a fairly new role, the NHS have adopted this role on the boards of many Foundation Trusts, but we’ve seen interest in the role by other sectors too. The NHS say they’ve see this Associate role as an opportunity to improve succession planning and bring in new board members that may have more diverse experiences and perhaps less board experience. East Sussex Healthcare NHS Trust have Associate Non-Execs.

 

Member
aka Board member, Member of Audit and Risk Committee, Advisory committee member / Advisory Panel Members

‘Member’ can be quite a vague term, so it’s always worth exploring further to establish what the role makes you a member of!  Titles like ‘advisory committee’ member will indicate the role the board has, but the individuals are not usually formal, legal directors in the way you might be for a non-executive director role. In some instances it may be a similar role to a board advisor. 

Example: the Financial Reporting Council, an independent regulator, has Advisory Panel Members. 

 

Lay-
aka Lay Chair, Lay Member, Lay council member, Non-Executive Lay member

A Lay member or lay chair are usually in place for membership organisations or professional bodies, who have members of their council or board who are non-members. This is usually to ensure independence, and bring fresh thinking and skills from outside of the sector. 

Example: the General Medical Council’s board has members who are medical professionals, and lay members who are not.

 

Trustee
E.g. Pension Trustee, Trustee Director

The title of ‘trustee’ is most commonly used for charity board members, and in that capacity they are generally unpaid. But it’s not quite that simple! Pension schemes have trustees who are responsible for ensuring that the pension scheme is well run and the members benefits are secure. Some of these roles are independent (someone who isn’t a member of the pension scheme) and some are representative (you are a member). The quick tip from us is don’t quickly assume ‘trustee’ means a charity trustee, there are lots of different types of trustee. 

Example: NOW: Pensions have a trustee board

 

Commissioner
aka Non-Executive Commissioner

This role title is reserved for public sector roles, and they are in some instances publicly elected roles. The role can be quasi-executive, with some roles 0.5 FTE and placing specific deliverables on the individual (which is not usual for non-exec roles, you aren’t there to ‘do’ you are there for oversight, insight…). Or they can be more like non-executive roles, with collective decision making.   

Example: Commission on Human Medicines has 13 commissioners. 

 

Key questions to ask when you’re trying to understand what the title means:

  • Legal liability. Will you be listed on Companies House as a director?
  • Type of organisation. Private company? Listed company? Charity? Community interest company (CIC)?
  • Which committees would you be on? The main board, any sub committees?
  • Voting rights. Would you have voting rights? Or are you purely there to advise?
  • Who appoints you? Members, shareholders, the board etc.
  • Who are you accountable to?

Finally, don’t let things like role titles put you off. If you’ve got questions about what the role entails, ask. Most roles have an email address or phone number you can get in touch with to ask a few questions and we’d recommend you do your research and ask questions.

 

Now you know what all the titles mean…

View our Non-Executive Director listings for free.

Interested in becoming a Non-executive Director? Click here to sign up and view vacancies. We showcase c. 100 paid non-executive director board roles each month. It’s totally free for candidates to view roles, there’s no catch, we launched Dynamic Boards to make it easier and free for you to find roles that suit you.

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Are you an organisation looking for Non-executive directors? We’d love to help you get the word out about your role. Click here to find out more.

 

Want to learn more? Non-Execs roles also have their own pay jargon: they don’t get a ‘salary’ they get ‘fees’, they aren’t ’employed’ they are contracted. Learn more by reading our  non-exec pay blog.

 






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