Gone are the days when non-executive directors were exclusively drawn from the worlds of banking or law. If that surprises you, you might not have been close to the shift that’s taken place over the last decade. Today, the landscape of board appointments looks very different, and for those businesses – particularly in private equity, venture capital, and family offices – it’s crystal clear that the tide has turned.
While corporate governance remains a core part of the NED role, the expectations around who fills these positions have evolved dramatically. There’s now a marked preference for candidates with real-world, hands-on experience. In many cases, today’s NEDs are portfolio directors who have “walked the walk.” These are individuals who have often lived the entrepreneurial journey, having successfully scaled or even sold a business themselves. That’s something the previous generation of NEDs – often career bankers or lawyers – simply couldn’t offer.
This shift is not only about adding value at the boardroom level but also responding to the growing demand from investors. More than ever, investors are looking for NEDs who bring a commercial perspective grounded in real-world experience, particularly during due diligence phases. The emergence of so-called “expert networks” has, at times, led to rather dry and theoretical conversations with individuals who may be positioned as “experts” but often come across more like “middle managers” than true specialists. This lack of hands-on entrepreneurial experience can make the insights offered less impactful and relevant.
Investors, especially in private equity and venture capital, have realised that the insights of a NED who has exited a business, lived through the ups and downs, and built something from the ground up can be invaluable. These individuals bring a wealth of commercial knowledge, pragmatism, and an ability to see the big picture, especially when it comes to assessing the true potential of a business. Their input during due diligence can offer sharper, more actionable insights compared to those from theoretical, second-hand sources.
What’s driving this shift? More than anything, it’s a desire for empathy and practical insight. Founders and boards today are dealing with increasingly complex and fast-moving challenges. From navigating the demands of rapid growth to managing the uncertainties of global markets, the stakes are higher than ever. It’s no longer enough to simply provide advice from the sidelines – boards want someone who has been in the trenches and can offer genuine support. They seek NEDs who understand the trials and tribulations of scaling a business and who can offer not just guidance, but also empathy for the difficult decisions that need to be made.
This isn’t to say that the traditional elements of a NED role – governance, risk management, and ensuring accountability – have faded in importance. Far from it. But what we’re seeing is a broadening of the NED’s skillset. Alongside governance expertise, there’s a growing appetite for directors who can contribute to business strategy, help accelerate growth, and bring a fresh perspective born of their own entrepreneurial experience.
Private equity and venture capital firms, in particular, are leading this charge. They’re arguably the most prolific hirers of modern NEDs and have been instrumental in changing the game. For these investors, it’s not just about ticking a governance box – they need non-execs who can roll up their sleeves and add real value to their portfolio companies. Family offices are following suit, understanding that this more modern approach leads to better outcomes for the businesses they back.
This is not just a cosmetic change; it’s a fundamental shift in the way boards operate. The traditional NED model, with its focus on high-level oversight, still has its place. But for a growing number of businesses, particularly those in high-growth sectors, the emphasis is now on practical, real-world experience. The modern NED is someone who can relate to the journey of the founder, someone who has faced the same challenges and can offer advice that goes beyond theory.
What does this mean for those aspiring to become non-executives? It means there’s never been a better time for entrepreneurs, former CEOs, and other experienced business leaders to step into these roles. The opportunity to make a meaningful impact is there for those who are willing to bring their experience, empathy, and insight to the table.
The boardroom is changing, and for businesses that want to thrive in today’s world, the old-school approach to hiring NEDs just won’t cut it anymore. The future belongs to those who have not only talked the talk but walked the walk – and who understand the reality of what it takes to build, grow, and sustain a successful business.