Hire a Non-Executive Director (NED)

Hiring a Non-Executive Director: Where to Start

Most boards hire a non-executive director only occasionally, so few people inside the business have done it before. The questions are usually the same: do we actually need a NED, what should they bring, how do we find them, what will it cost and how long will it take? This page answers those questions in the order a board meets them, from the first conversation about the role to the new director’s first board meeting.

NED Capital helps UK organisations hire non-executive directors, chairs, committee chairs and trustees. We work with private and family companies, private equity-backed businesses, FCA-regulated firms, listed companies, charities and public bodies. Searches are run by our senior search team under founder Adrian Lawrence FCA, a Fellow of the ICAEW and former listed-company finance director. For a full description of the service, see our non-executive director recruitment page. For how we find and approach candidates who are not on the market, see NED headhunters.

Do You Need a Non-Executive Director?

Listed companies are expected to have independent non-executives under the UK Corporate Governance Code or the QCA Code, and many regulated firms need them to meet FCA expectations. For private companies the decision is voluntary, and it usually follows one of these triggers.

Growth beyond the founders. The business has outgrown a board made up of its founders and managers, and needs someone to challenge the plan and hold the executive team to account.

Investment or a sale. Investors often require an independent director, and buyers look for a board that has been properly governed. See NEDs for private equity boards.

A skills gap. The board lacks finance, sector, technology, regulatory or people expertise that a non-executive could supply.

Regulation. An FCA-regulated firm may need an independent chair or committee chairs, some of whom hold senior manager functions. Our guide to appointing a NED for an FCA-regulated firm explains what is involved.

Succession or family dynamics. A family business preparing for the next generation, or a founder stepping back, often benefits from an independent voice. See do private and family businesses need a NED?

Define the Role Before You Search

The single biggest factor in a good NED hire is a clear brief. Before speaking to candidates, agree the following as a board.

What gap are we filling? List the skills and experience already around the table and identify what is missing. A board skills matrix makes this objective.

What will they actually do? Will they chair a committee, mentor the CEO, lead on risk or prepare the business for investment? The answer shapes the profile.

How independent must they be? An independent NED should have no material relationship with the business or its shareholders. Our guide to independent and affiliated NEDs explains the difference.

How much time is needed? Be realistic about board meetings, committee work, preparation and the extra time a transaction or difficult period demands.

Who decides? Agree who on the board will interview, who signs off the appointment and how shareholders or investors will be involved.

The Hiring Process Step by Step

1. Brief. We agree the profile, the committee roles, the independence requirements, the time commitment and the terms with the chair or the person leading the appointment.

2. Search. We research and approach candidates who match the brief, most of whom are already serving on boards and are not actively looking. The search draws on the shared network of the five specialist firms in the FD Capital Group.

3. Assessment. Candidates are interviewed against the brief, with conflicts, other directorships and real availability checked early.

4. Shortlist and interviews. The board meets a shortlist of assessed candidates, written up so they can be compared like for like.

5. Offer and appointment. We support references, the offer, the appointment letter and, for regulated firms, the FCA approval process. The new director is then registered at Companies House.

6. Induction. A structured induction (meeting the executive team, site visits and a briefing on strategy, risk and governance) helps the new NED contribute from the first board meeting.

Our step-by-step guide for chairs covers each stage in more detail.

What Does It Cost to Hire a NED?

There are two costs to plan for. The first is the director’s own fee, which depends on the size and complexity of the organisation, the role (chairs and committee chairs are paid more than ordinary members) and the time commitment. Our NED salary guide sets out typical arrangements, and our guide to how NED fees are structured explains fixed fees, committee supplements and equity in growth companies.

The second is the cost of the search. For a retained search the fee and timeline are agreed before any work begins, so the board knows the commitment from the outset. Many charity trustee roles are unpaid, but the search still needs to be run properly.

How Long Does It Take to Hire a NED?

A well-run search usually produces a shortlist within a few weeks of the brief being agreed. Interviews, references and the offer add further time, and the chosen candidate may need to give notice on other commitments. Regulated appointments take longer where the FCA must approve the director before they take their seat. The quickest searches are the ones with a clear brief and a board that makes interview time available promptly.

What to Look For in a NED Candidate

Relevant board experience. A first-time NED can be the right choice, but most boards benefit from at least one director who has served on a board before and understands the difference between governing and managing.

The specific skill you need. If the gap is finance, look for a qualified accountant or former CFO who can chair the audit committee. If it is growth, look for someone who has scaled a business in a similar market.

Independence of mind. The best non-executives ask uncomfortable questions politely and persistently. Test this at interview by asking how they handled a disagreement with an executive team.

Chemistry with the chair and CEO. A NED must challenge without undermining. Make sure the chair and chief executive both meet the preferred candidate before an offer is made.

Genuine availability. Check how many other boards the candidate sits on and how much time those roles demand, especially in a busy year.

Common Mistakes When Hiring a NED

Appointing from the existing network. Friends, advisers and former colleagues are rarely independent, and the board loses the outside challenge it needs.

Hiring a generalist. A strong CV is not enough if it does not fill the board’s actual gap.

Underestimating the time. A director who cannot give the role the time it needs adds little.

Skipping the brief. Without agreed criteria, interviews turn into a popularity contest.

Ignoring conflicts. Other directorships and relationships must be checked before an offer, not after.

For guidance on judging firms that offer to run the search, see our guide to choosing a NED recruitment agency. The Institute of Directors’ factsheet on the NED role is also a useful reference for boards new to the process.

Frequently Asked Questions

Does a private limited company have to have a non-executive director?
No. There is no legal requirement for a private company to appoint one, although investors, lenders and regulators may expect it.

Can we hire a NED for one or two days a month?
Yes. Most non-executive roles in smaller companies involve a day or two a month, rising for chairs, committee chairs and during transactions.

Do NEDs have the same legal duties as executive directors?
Yes. Under the Companies Act a non-executive director has the same statutory duties as any other director.

Should our first NED be the chair?
Often, yes. Many growing companies appoint an independent chair first so the founder can focus on running the business. See chairman recruitment.

Can you help if we are not sure what we need?
Yes. An initial conversation is free and often helps a board decide whether it needs a NED, a chair or an adviser.