A non-executive director (NED) is a member of a company's board of directors who is not part of the executive management team and does not engage in the day-to-day operations of the company. Unlike executive directors, who are employees involved in running the company, non-executive directors serve as independent advisors and provide oversight, strategic guidance, and constructive challenge to the executive team
. Key aspects of a non-executive director's role include:
- Providing independent oversight and monitoring the performance of the executive directors and senior management
- Participating in policymaking, planning, and corporate strategy development
- Serving on committees that handle sensitive issues such as executive pay and risk management
- Acting in the interests of shareholders and other stakeholders by offering an objective perspective free from conflicts of interest
- Sharing legal responsibilities and liabilities equal to those of executive directors, despite not being employees
Non-executive directors are typically compensated for their services through fees, equity, or cash payments but are not considered company employees
. In summary, a non-executive director is a part-time board member who contributes independent judgment, oversight, and expertise to help ensure good corporate governance and the long-term success of the company without being involved in its daily management
