The Growing Importance of outstanding Non-Executive Directors and robust Boards for UK SMEs
Is a Board necessary for smaller businesses? Karena Vaughan, Founder & Managing Director at Catalina Consulting explains why it is important for SMEs to have a Board in this day and economy.
The global financial crisis, coupled with increased regulation have drawn attention to the roles played by board advisers and independent non-executive directors (iNED).
From corporate governance through to oversight and mentorship, the requirements of the advisory role have never been so broad or demanding.
The ability to review in detail a company’s strategy and decision-making to support and challenge, have for a long time now been essential attributes of the trusted advisor.
Today, even more than that, is the need to understand real operational detail, including risk, finance, technology and sales.
Emphasis on these skills and demand for experience in these critical business functions is being driven by:
- Founders and CEOs of fast-growth SMEs and high-potential start-ups
- VCs & Corporate Innovation teams seeking iNEDs and advisors for portfolio small businesses
In particular, we see demand for skills in the following key areas:
As company leaders strive to achieve diversity goals to provide a good work/life balance for their people, or to build a culture that retains the best talent, there is a need for advisors who can help them to understand how to be an employer of choice.
The need to realise investment in digital transformation, to manage, protect and monetise data, to drive efficiencies through AI or robotics requires a level of understanding that goes beyond the traditional advisory role. Most in demand are advisers who understand how to commercialise technology.
Digital skills are set to be the highest growth area for advisers and iNEDs with experience and expertise in digital transformation and in particular monetising transformation in high demand.
Within regulated industries the iNED face much closer scrutiny from regulators than ever before. The growth in fintech and regtech companies in particular has led to an increasing demand for advisers with specific regulatory knowledge and expertise
Sales and marketing
Most in demand for advisory roles are people with specific industry knowledge as well as experience of leading high performing teams. A ready-made rolodex of contact is also a distinct advantage.
Advisers are increasingly required to support fundraising and investor engagement. In high demand are those who have built and sold successful businesses and who understand how to engage and negotiate with investors.
From a board perspective the glare of the spotlight has never been more intensely focused on boards than it is today. The scrutiny of governance, due diligence and transparency has grown apace, as regulated industries in particular tighten and redefine their approach to board composition, management, reporting and performance assessment.
Company success is a measure of the Board’s performance, with the ultimate measure being the alignment between the expectations of shareholders and the company’s actual performance.
For small business the Board is there to ensure the company’s continuing prosperity and to show real leadership in terms of its ethos, culture, ethics, values and ambition. It is there to drive the company forward while keeping it under prudent control. In the current climate, this is invaluable for the small business leader.