Kieran Moynihan 

Managing Partner, Board Excellence 

Some time ago, I delivered a workshop on board good practices for the CEOs of the portfolio companies of an investment firm. All of the CEOs and their respective boards were quite experienced, and I was curious to hear their perspectives on the value their NEDs added beyond standard governance and oversight. To help stimulate the discussion, I posed the following hypothetical question: ‘If you had the opportunity to give a six-month holiday to the NEDs, would you take it, and would it actually make a difference to the company?’ 

I was genuinely surprised to hear that a significant number of the CEOs would have grasped the opportunity as they felt it wouldn’t make a difference to the major decision-making of the company and would free up time spent engaging with and supporting the board. 

One of the CEOs said, ‘We have a very solid board with very experienced, committed NEDs who are governance-centric and oversee our performance in an effective manner, but they actually don’t add any unique value beyond oversight and governance.’ 

Another CEO shared a contrasting perspective, reporting that, ‘While they often drive us crazy and stretch us to our limits, we would actually miss our NEDs. They are highly strategic, sharp as a razor in terms of their insightful challenge and debate, set the bar high on our performance as an executive team, individually and collectively and – while we would hate to have to admit it to them – they add serious value in all the big decisions we make and, actually, they make us better.’ 

In the volatile world in which we live today, shareholders, stakeholders and executive teams should have a genuine expectation that the NEDs will add significant value beyond governance and performance oversight. On many boards, this added value is simply not there. This may be the result of poor board composition or a lack of diversity or board effectiveness but can also be caused by CEOs and executive teams who make it very difficult for NEDs to contribute in areas like strategy. 

High-performing boards are characterised by having a chair and CEO who jointly enable a partnership model between the NEDs and executive team, where intelligent and robust challenge and debate flourish, enhancing decision-making. This dynamic should be underpinned by healthy tensions, trust and a deep commitment – individually and collectively – to excel for  shareholders, employees and stakeholders. 

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