The True Time Commitment Of A Non-Executive Director

In this article, we take a look at the true time commitment of a Non-Executive Director. If you’d like to read about NED pay then check out this blog. 

What is the advertised time commitment of a Non-Exec?

Most Non-Executive Director adverts will specify how many days a month/ year they expect the role to take of your time, for example two days a month. This sounds simple, but the work of the NED doesn’t generally fit neatly into ‘days’. One month you might be at a full day board meeting (1 day), then answering emails (2 hours, including thinking time), then having a phone call with one of the Exec (1 hour), then preparing for a board meeting (7 hours). But another month might look very different. 

Since NEDs don’t generally keep time sheets it’s very difficult for boards to tell you exactly what time their current NEDs commit to the role, never-mind guessing how much time will be required for the role going forward. It’s impossible to know for sure what events the organisation may go through in the course of the coming year, so you might find the commitment required is more than expected. 

Dynamic Boards advertise over 1000 Non-Executive Director roles a year and based on the advertised time commitment of these roles we can see that NEDs (outside of Listed companies) are generally asked to commit to 1-4 days a month, and Chairs are asked to commit 2-9 days a month. 

Some sectors have higher time commitments than others: 

Organisation Type	NED Average advertised time commitment Days per month	Chair Average advertised time commitment Days per month
Private company	1.9	3.0
Co-Operative/ Mutual	2.4	3.4
Professional body/ Regulator	1.6	4.5
Building Society	2.6	3.8
Housing Association	1.6	2.5
NHS	3.6	8.9
Not-For-Profit	2.2	3.9
Public Sector	2.3	4.7

Reality check: How much time does a Non-Executive Director role actually take?

Some people think of Non-Execs earning a sizeable pay packet in exchange for just a few days of their time a month. However, the reality, as we’ve seen, is that many NEDs are working more hours than ever, often surpassing their initial time commitment to the role. According to a survey conducted by remuneration consultancy MM&K, 60% of Non-Executive Directors reported that demands on them had increased over the past year.1

Why are Non-Execs having to work longer and harder? The scope of board responsibilities has been increasing for some time, with pressure to meet regulatory requirements, expectations for stakeholder engagement, cybersecurity, disruptive technologies, human capital management, company culture, ESG, and Diversity, Equality and Inclusion. In order to address these issues, extra meetings are often scheduled, additional committees put in place, more prep time needed to cover unfamiliar topics and continued money and time investment required for learning and development.

NEDs are paid at a flat rate of fees for the year (you can see more info in our blog here) and they aren’t paid bonuses. So whilst the Exec might work extra hard and feel that their additional effort is rewarded at the end of the year, NEDs receive no increase in pay to supplement the additional hours completed. Therefore when the time requirement increases substantially, NEDs see a reduction in the amount per hour they actually earn from the role.

In more extreme cases, a Non-Exec role will end up being paid minimum wage or less when you calculate the actual time completed for the role over the year. This is concerning given the level of legal responsibility and liability NEDs take on with these roles. It’s important that boards are able to attract high calibre NEDs and where we see the expectations on NEDs increase ahead of pay levels this can raise alarm bells.

We see NED pay per day vary on average from £280 to £1400, and Chair pay per day vary on average from £380 to £1500 (note – this doesn’t include Listed Companies as they don’t advertise sufficiently for us to have this data). Larger organisations, and those that carry more regulatory burden (e.g. Financial Services) tend to pay a higher pay per day.

How do NEDs spend their time? 

It might be helpful to split out the time commitment into planned contact time (board meetings, strategy days), prep time/ individual time (reading board papers, researching the marketing), and unplanned contact time (extra 1-1 meetings with exec, calls, emails).

When you are reading through a NED advert, or going through an interview process, at the very least you should have a clear understanding of the planned contact time required for the role. And ideally you’ll also have an idea of what other NEDs have found the preparation time and ad-hoc time requirement to be.

Planned contact time

You will need to be sure this time is manageable alongside your other fixed commitments. If you have a full time job you’ll need to be clear how you will be able to take time out to undertake this time.

• Board meetings/ AGMs. Most boards set dates and timings for board meetings before the start of the year. Sometimes these are shared in the advert, other times they are disclosed through the interview/ offer process. Most boards will meet between 4-10 times a year with each meeting lasting between 3 hours and a full day.
• Strategy days. Most boards have 1 or 2 days planned each year to develop and debate the organisation’s strategy. These may be in the same location as the board meetings, or they might be elsewhere involving an overnight stay.
• Sub-committee meetings. Most Non-Execs will also join a sub-committee, which will involve additional (planned) meetings. These may take place on the same day as the board meeting, or on a separate day. They will probably be shorter and less frequent than board meetings.

Preparation/ personal time

You’ll have a reasonable amount of autonomy as to when you undertake this time. Depending on your other commitments you might read board papers over the course of evenings, or the weekend, or you might read them within 9-5 hours.

• Board meeting prep. Board packs are sent to Non-Executives ahead of a meeting and these can sometimes run into many hundreds of pages (organisations subject to higher levels of regulatory scrutiny often have more extensive board packs). Reading these cover to cover, comprehending the information and critiquing them can take hours. Even with shorter packs, preparation time can still be considerable depending on their contents. NEDs dedicate a large portion of their time to pre-meeting preparation, which includes assessing the board papers in advance and some boards will have pre-board discussions on the agenda. This prep can take from a couple of hours up to, cumulatively, a couple of days. Board papers should be shared a week in advance, but not all boards manage this!
• Personal reflection time. Sometimes it’s what isn’t in the board pack that you need to consider before the board meeting. It’s important as a NED that you allow time to reflect on the organisation and team, and their performance and impact.
• Research. As a Non-Exec you won’t have all the answers and neither will you be expected to. However, you will need to contribute to a range of subject areas and make important decisions with other board members on different topics. Inevitably, there will be some topics that you aren’t so confident with and will require you to swot up on through independent research or through conversations with the executive ahead of time. Whilst you may not be an expert in an area, you will need to know enough to make an informed decision in the boardroom that you are comfortable with. This is important because, in the event of a problem, liability of these decisions will ultimately fall with all board members collectively.
• Continuous professional development. You should be dedicated to continually developing your skills to ensure you operate as an effective Non-Executive Director. This might involve honing your governance skills through learning more about the role of the NED and how to operate in a variety of situations. We can help with that! Current Non-Executive board members are welcome to join our NED Community. Or it might involve learning more about the market you are operating within, particularly if this is a market you haven’t worked in before. Or perhaps it’ll involve you learning about a topic relevant to the organisation e.g. cyber risk, or AI.

Unplanned contact time

The responsibility of a NED role is full time, 24/7, 365 days a year. Due to the liability and responsibility you’ve taken on you will be expected to contribute whatever is required to undertake the role effectively. The duties of a NED shouldn’t generally take up that much time – unless you aren’t operating with a full executive team and are forced to step in temporarily!

• Ad Hoc meetings (not scheduled at the start of the year). For many boards, there are regular conversations that happen outside of the formal board meetings, which involve the Non-Executive Directors. This might be because a time sensitive matter arises in between meetings that requires all Directors input. Some directors find that decisions are often made or opinions formed prior to the main board meetings and then just agreed at the meeting itself so it’s important that NEDs dedicate adequate time to have these conversations.
• Emails. You will have a separate email account for your NED role and you’ll be expected to keep up to date with communications. This can be a new challenge if you find that you are now managing multiple inboxes for several different organisations.
• 1-1 meetings with the Exec/ with other NEDs. It’s important that you build relationships with the other members of the board, and senior leadership to build rapport and learn more about the organisation’s culture. Additionally, the Exec may find it helpful to have an informal catch up with you as a sounding board for their ideas.
• Induction. You should expect to commit additional time when you first join the board to allow for a thorough induction process. Because board meetings don’t happen very often it can take a while to feel inducted into the organisation unless you make a lot of effort at the beginning. Many organisations haven’t put a lot of consideration into how they induct NEDs so you might need to make proactive suggestions of what might be helpful.
• Networking /attending events. One of your jobs as a NED is to encourage the Executive (many NEDs focus more on holding the exec to account/ challenging the exec but to foster a good relationship a balance is helpful). Attending the organisation’s events, or joining them in attending an important conference shows tremendous support to the Exec.
• Annual appraisals. Most boards follow an annual appraisal process, which will likely involve a 1-1 session with the Chair. You might also be involved in a board evaluation process and a board skills review. These meetings won’t generally be in the diary till closer to the time.

Are you able to step up in a crisis?

When you join a board, you have to be willing to serve the commitment of the role in every eventuality. A variety of circumstances including M&A activity, an unplanned change in CEO or Chair, IPO, macroeconomic disruption etc. can cause a significant spike in time commitment (without any increase in pay). 

An extreme example of this is Amanda Blanc, former Chair of the Professional Rugby Board (PRB), who recalls attending 70 meetings more than what she anticipated when starting the role. Here’s a quote from her letter of resignation to the Welsh Rugby Union: “On taking the position I was advised I should be available to attend 6 PRB meetings per year and 8 WRU Board meetings. As at the end of October I have attended 84 meetings this year – including several half days and some full days, many of which have not been a good use of time such as the CEO recruitment process. Almost all of these have been in my spare time, over weekends, holidays, etc.”2

Thankfully not many Non-Execs report situations quite as extreme as Amanda’s! But it is common, rather than the anomaly, for Non-Execs to work more hours than they contractually agreed to when accepting a board role.

What questions should you be asking when considering a NED role?

The responsibility of a NED role is full time, 24/7, 365 days a year, but the duties of a NED aren’t, so a NED role may well be something you can do alongside your other work or commitments.

When you’re applying for a role it might be worth considering:

• Do I have a clear understanding of the requirements of the role? Do I understand what the planned contact time will entail (board meetings, strategy days etc.)? How much time is required on top of that?
• Is the time requirement feasible alongside my other commitments and responsibilities?
• Can I manage the mental stretch of jumping between multiple roles and email inboxes? Remember NED work doesn’t always neatly fit into set days a month!
• Do I believe in what this organisation does, and the people I’ve met, enough to keep going if/when I have to put in more than the expected hours to fulfil my duties?
• Do I need any permissions from roles I already have to undertake this role? This is particularly pertinent for those with full time roles, or that work in organisations with strict ‘outside business interest’ policies.
• How can I articulate to the organisation that I will be committed to the role, and that I have thoughtfully considered how I will manage my multiple responsibilities?

Are you looking for Non-Exec roles?

We list c.100 paid NED board roles each month from right across the UK. It’s totally free to view our roles, and we provide blogs and YouTube videos to encourage and inspire NEDs. You can sign up to view them here.

Are you recruiting a Non-Executive Director or Chair or Board Advisor?

We can help you advertise your role to candidates who will bring the skills, experience and perspectives you need on your board. We advertise over 1000 Non-Exec board roles a year from across the UK. You can see information on our advertising options here and you can get in touch with the Dynamic Boards team at hello@dynamicboards.co.uk

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References:
1 – FT – UK Non-Executive Director pay fails to keep pace with workload
2 – Wales Online – Amanda Blancs stark WRU resignation