Finance & Governance NED

Finance Governance NED Recruitment

Audit Committee Chairs | Risk Committee NEDs | Finance-Qualified Board Directors

NED Capital places finance-qualified non-executive directors to chair and serve on Audit Committees, Risk Committees and Finance Committees for listed companies, private businesses, PE-backed organisations, regulated firms and not-for-profit bodies across the UK. The finance governance NED — qualified in accountancy, with recent and relevant financial experience applied at board level — is the most consistently in-demand specialist NED profile across every company type and sector. Adrian Lawrence FCA, founder of NED Capital, is a Fellow of the ICAEW holding an ICAEW practising certificate — the professional background that gives NED Capital direct expertise in assessing finance governance NED candidates.

We assess finance governance NED candidates specifically against the FRC Code’s “recent and relevant financial experience” standard and the applicable regulatory requirements for the appointing organisation. Call 0203 137 2496 or email recruitment@nedcapital.co.uk to discuss a finance governance NED appointment.

The Audit Committee Chair — Governance Role and Requirements

The audit committee chair is the most technically demanding NED governance role in most company boards. The chair leads the committee that oversees the integrity of the company’s financial reporting, the external audit relationship, the internal controls framework and the internal audit function. The quality of the audit committee chair — their financial qualifications, their understanding of the financial reporting framework and their ability to engage as a governance peer with the CFO, the external auditors and the internal audit function — directly determines the quality of the company’s financial governance oversight.

The FRC UK Corporate Governance Code requires the audit committee of a FTSE 350 company to include at least three independent NEDs and to have at least one member with “recent and relevant financial experience” — defined in the FRC’s Guidance on Audit Committees as a professional accountancy qualification with current financial experience, which in practice means a qualified accountant (ACA, FCA, ACCA, CIMA or international equivalent) who is currently applying their financial expertise in a relevant context. For smaller listed companies, the FRC Code requires at least two independent NEDs on the audit committee, with at least one having recent and relevant financial experience.

The “recent and relevant” standard is more demanding than many boards appreciate. “Recent” means the financial experience is current and continuing — a former CFO who qualified 30 years ago and has served only in governance roles for a decade is not clearly “recent.” “Relevant” means the experience is applicable to the financial reporting context of the specific company — an audit committee chair whose finance experience is exclusively in manufacturing may not be “relevant” for the audit committee of a complex financial services firm. We assess every finance governance NED candidate against both dimensions before shortlisting.

Audit Committee Responsibilities

Financial reporting oversight. The audit committee reviews the annual accounts before board approval — assessing the appropriateness of the significant accounting judgements management has made, challenging the accounting treatments for complex or unusual transactions and ensuring the accounts give a true and fair view. This requires the audit committee chair to understand the applicable accounting framework (IFRS or UK GAAP/FRS 102) and to be able to assess management’s judgements with professional scepticism rather than simply accepting management’s presentation.

External audit relationship. The audit committee appoints, oversees and — where necessary — replaces the external auditors. The committee reviews the external audit plan, the auditor’s assessment of significant audit risks, the audit findings letter and the auditor’s independence assessment. Where the company’s audit has been with the same firm for a significant period, the committee assesses whether the audit tenure creates independence risk and whether audit tendering is appropriate. For listed companies, audit firm rotation requirements (20 years maximum without competitive tender for FTSE 350 companies) create specific audit committee governance obligations.

Internal controls oversight. The FRC Code requires the board to maintain and review the effectiveness of the company’s risk management and internal control systems. In practice, the audit committee undertakes much of this work on behalf of the board — reviewing the internal controls framework, assessing management’s assurance that controls are operating effectively and reviewing the internal audit programme that provides independent assurance on control effectiveness.

Internal audit function oversight. Where the company has an internal audit function, the audit committee oversees it — approving the internal audit plan, reviewing internal audit findings and management’s responses, assessing the adequacy of internal audit’s resources and independence and reviewing the performance and appointment of the Chief Internal Auditor. Companies without a dedicated internal audit function need the audit committee to assess whether the absence of internal audit is appropriate for the company’s size and risk profile.

Whistleblowing arrangements. The audit committee oversees the company’s whistleblowing arrangements — ensuring that the policy is in place and effective, that employees can report concerns about financial irregularity or other governance matters anonymously and that whistleblowing reports are investigated appropriately and reported to the committee.

Financial risk oversight. In companies without a separate risk committee, the audit committee typically oversees the company’s risk management framework — reviewing the risk register, assessing the adequacy of risk mitigations for the most material risks and ensuring that financial risks (liquidity, credit, market, operational) are managed within the board’s approved risk appetite.

Risk Committee NEDs

Separate risk committees — distinct from the audit committee — are required for systemically important banks and dual-regulated financial services firms under PRA governance requirements, and are increasingly common in large listed companies where the risk oversight function has grown beyond what the audit committee can accommodate alongside its financial reporting responsibilities.

Risk committee chairs and members need specific risk governance expertise — understanding of enterprise risk frameworks, risk appetite statements, stress testing and scenario analysis, model risk management and the specific risk categories most material to the company (credit risk, market risk, operational risk, cyber risk, climate risk). For PRA-regulated firms, the risk committee chair holds an SMF10 designation — with specific personal accountability for the board’s risk oversight function. See our Financial Services NED Recruitment page for more on SMCR-designated risk committee governance.

Finance Committee NEDs — Charities, Housing Associations and Public Bodies

Many charities, housing associations, NHS trusts and public bodies operate Finance Committees — governance structures that combine elements of audit oversight and financial management governance within a single committee. Finance committee chairs in the not-for-profit and public sector have specific governance requirements that differ from listed company audit committee governance.

For charities, the Finance Committee typically oversees the Charities SORP financial reporting framework — with its specific treatment of restricted and unrestricted funds — alongside the charity’s reserves policy, investment policy and the management of grant funding compliance. For housing associations regulated by the Regulator of Social Housing, the Finance Committee governs the organisation’s financial covenants, its regulatory financial returns and the management of treasury and debt within the RSH’s financial governance expectations.

For more on Finance Committee appointments in charity and not-for-profit contexts, see our Chair of the Finance Committee Recruitment page.

“Recent and Relevant” — The Assessment Standard

The “recent and relevant financial experience” standard is the most important qualification criterion in any audit committee chair appointment and one of the most inconsistently applied. NED Capital assesses candidates against both dimensions of the standard before shortlisting for audit committee chair roles.

Recent: The candidate’s financial experience is current and continuing. A practising accountant — partner or senior manager in an accountancy firm, finance director or CFO in an active executive role, or audit committee member actively applying financial expertise — meets the “recent” standard. A former CFO who qualified 20 years ago and has served only in governance roles for the past decade raises a “recent” question that the board and the nomination committee need to consciously address. Transparency about this assessment in the annual report disclosure is required by the FRC Code.

Relevant: The candidate’s financial experience is applicable to the company’s specific financial reporting context. A manufacturing CFO serving on the audit committee of a manufacturing business is clearly relevant. The same CFO serving on the audit committee of a complex financial services business with a financial instruments portfolio, insurance liabilities and regulatory capital calculations may not be “relevant” without specific additional expertise. The most directly relevant profiles for audit committee chairs are: professional accountants who are currently practising (partners and directors in audit or advisory firms); former senior finance executives in the same or adjacent sectors; and former senior audit partners who have maintained financial currency through board governance activity.

Finance Governance NED Candidate Profiles

Qualified accountants with board governance experience. ACA/FCA, ACCA or CIMA-qualified directors who have served on audit committees as chair or member — bringing both the technical qualification and the governance track record. ICAEW FCA designation — the qualification held by NED Capital’s founder Adrian Lawrence — is widely regarded as the most rigorous professional accountancy qualification for UK audit committee purposes.

Former Big 4 and mid-tier audit partners. Retired audit partners from EY, KPMG, Deloitte, PwC, BDO, Grant Thornton or Mazars who have transitioned to NED roles bring deep audit and financial reporting expertise combined with direct experience of how external auditors assess audit risk and financial reporting quality. Their insider perspective on the auditor’s assessment process is directly valuable to audit committee governance.

Former CFOs and Finance Directors in relevant sectors. Experienced CFOs and Finance Directors who have moved into governance roles — bringing operational financial leadership experience alongside the board governance perspective. The most relevant CFO candidates have sector experience matching the appointing company, are qualified accountants and have remained current in their financial expertise through active audit committee service.

Former financial regulators and banking supervisors. For financial services audit committee appointments, former FCA and PRA supervisors and banking examiners bring regulatory financial expertise that is specifically relevant to regulated firm financial reporting and prudential governance.

Finance Governance NED Fee Benchmarks

Finance governance NED fees reflect the technical expertise and governance responsibility of the role. The audit committee chair supplement is typically the highest committee chair premium in the market. FTSE 100 audit committee chair: £115,000–£175,000 per annum (including supplement). FTSE 250 audit committee chair: £70,000–£110,000. AIM and smaller listed: £35,000–£70,000. Private company audit committee or finance committee chair: £20,000–£50,000. PE-backed company finance NED: £25,000–£55,000 with equity participation. Charity and housing association finance committee chair: £5,000–£20,000 (often lower given the voluntary or regulated not-for-profit context). See our full NED Compensation Benchmarking guide for full-market committee chair fee data.