Non-Executive Director Job Description

A non-executive director (NED) is a member of the board of directors who does not work in the business day to day. Their job is to bring independent challenge, strategic judgement and oversight to the board: to test the executive team’s proposals, to make sure risk and financial reporting are properly controlled, to set executive pay and plan succession, and to look after the interests of shareholders and the company as a whole. A NED is a director in law, with the same statutory duties as an executive director, but the role is part-time, non-operational and built around the boardroom and its committees rather than a department.

What the job looks like in practice depends heavily on the type of organisation. A NED on a premium-listed board works within the UK Corporate Governance Code, sits on audit, remuneration and nomination committees and faces annual re-election by shareholders. A NED on an AIM board works to the QCA Code. A NED on a private equity-backed board is usually there to protect the investment case and support the management team through to exit. A NED in an FCA-regulated firm may hold a Senior Manager Function and carry personal regulatory accountability. Charity trustees and NHS non-executives sit in their own governance regimes again. The core responsibilities are the same; the weight placed on each one is not.

This page is a working reference for boards, chairs and nomination committees writing a NED job description, and for candidates who want to understand what a board will expect of them. It covers the responsibilities of the role, how it changes across listed, private, investor-backed, regulated and not-for-profit boards, committee membership, the Code provisions that shape independence and time commitment, directors’ duties and personal protection, the experience boards look for, and the appointment process. It finishes with a role specification template and a letter of appointment outline you can adapt. If you are ready to start a search, our NED recruitment service works with boards across all of these settings.

UK Non-Executive Director — Senior Responsibilities Framework

The 2024 UK Corporate Governance Code sums up the NED role in a single principle: non-executive directors should have sufficient time to meet their board responsibilities, and they should provide constructive challenge, strategic guidance, offer specialist advice and hold management to account. Every well-written NED job description is, in effect, an expansion of that sentence for a particular board. The main areas of responsibility are set out below.

Independent challenge

The NED’s first job is to ask the questions the executive team would rather not be asked. That means testing the assumptions behind a strategic plan, a budget, an acquisition or a major investment; asking what happens if the base case does not hold; and making sure the board has the information it needs before it takes a decision. Good challenge is specific and evidence-based rather than adversarial. A board where NEDs simply nod papers through is failing in its basic purpose, however harmonious the meetings feel.

Strategy and performance

NEDs contribute to setting the company’s strategy and then monitor management’s performance in delivering it. In practice that means taking part in strategy days, reviewing the business plan and key performance measures, scrutinising results against budget, and judging whether the executive team is executing well. A NED with relevant sector or functional experience — international expansion, digital change, M&A, turnaround — is often appointed specifically to strengthen the board’s thinking in that area.

Risk, audit and internal control

NEDs must satisfy themselves that financial information is accurate and that financial controls and risk management systems are sound and defensible. Much of this work is delegated to the audit committee and, in banks and insurers, a separate risk committee, but the whole board remains responsible for determining the company’s risk appetite and principal risks. For listed companies, the 2024 Code adds a board declaration on the effectiveness of material internal controls, which raises the bar for every NED, not only those on the audit committee.

Remuneration

NEDs, usually through a remuneration committee, set the remuneration policy and individual pay for executive directors: base salary, bonus, long-term incentives, pension and termination terms. The job is to align reward with long-term performance and with the company’s purpose and values, and to be able to explain the outcome to shareholders and the wider workforce.

Nomination and succession

NEDs have a prime role in appointing and, where necessary, removing executive directors. Through the nomination committee they lead board appointments, maintain succession plans for the board and senior management, and keep the board’s skills, experience and diversity under review. Planning CEO and CFO succession before it is urgent is one of the most valuable things a non-executive team can do.

Stakeholders and culture

Under section 172 of the Companies Act 2006 every director must have regard to the interests of employees, customers, suppliers, the community and the environment, the long-term consequences of decisions, and the company’s reputation. NEDs bring an outside view to those questions. Many boards also give a designated NED responsibility for workforce engagement, and NEDs are expected to form their own view of the company’s culture by spending time in the business, not only reading board papers.

UK NED Tier Framework — UK Firm Governance Framework Dimensions

The NED role is shaped by the governance regime the organisation sits under. A job description should name that regime explicitly, because it determines the committees, the independence tests, the reporting obligations and, in regulated sectors, whether the appointment needs regulatory approval.

Main market listed companies (FTSE 100, FTSE 250 and other commercial companies)

Commercial companies listed on the main market report against the UK Corporate Governance Code on a comply-or-explain basis. NEDs on these boards sit on the formal committees the Code expects, are subject to its independence tests and face annual re-election. The scale and visibility of the role rise with the size of the company: a FTSE 100 board carries more investor engagement, more complex reporting and closer public scrutiny than a smaller listed company, but the shape of the job is the same. Our listed company NED recruitment covers main market and AIM boards.

AIM companies

AIM companies must state which recognised corporate governance code they apply and how they apply it. The QCA Corporate Governance Code, revised in 2023, is widely adopted by AIM boards. It is principles-based and proportionate, but it still expects independent NEDs, a functioning audit and remuneration committee and an annual explanation of how the board operates. AIM NEDs are often closely involved with fundraising, the nominated adviser relationship and the board’s first steps into public company disclosure.

Large private companies

Large private companies that meet the size thresholds in the Companies (Miscellaneous Reporting) Regulations 2018 must report on their corporate governance arrangements, and many use the Wates Corporate Governance Principles for Large Private Companies. Wates sets out six principles covering purpose and leadership, board composition, director responsibilities, opportunity and risk, remuneration, and stakeholder relationships. NEDs on these boards often help an owner-managed or family business professionalise its governance without importing listed-company formality it does not need.

Private equity-backed companies

In a PE-backed business the NED, often the chair or an independent alongside investor directors, is expected to support delivery of the value creation plan, hold management to account against it and prepare the business for exit. The role is commercial and fast-moving. NEDs may be invited to invest alongside the sponsor or management, which needs to be disclosed and considered against any independence expectations. Our PE NED hiring guide covers this setting in more depth.

FCA-regulated and PRA-regulated firms

In banks, building societies, insurers, investment firms, asset managers, payments firms and other authorised businesses, NEDs work within the Senior Managers and Certification Regime (SMCR). The chair and certain committee chairs and the senior independent director may hold Senior Manager Functions that need regulatory approval before the person can take up the role, and every NED is subject to the Conduct Rules. Dual-regulated firms answer to the PRA as well as the FCA. The SMCR position, including current reform proposals, is covered in its own section below.

Charities and not-for-profit organisations

In a charity the board members are trustees, governed by charity law and overseen in England and Wales by the Charity Commission. Trustees are usually unpaid, with reasonable expenses reimbursed, unless payment is authorised by the governing document, the Charity Commission or the courts. Trustee responsibilities mirror the NED role closely — strategy, financial oversight, risk, safeguarding and holding the executive team to account — with the added duty to act only in pursuit of the charity’s purposes.

NHS bodies and public sector boards

NHS trusts and foundation trusts have unitary boards with a non-executive majority. Chairs and NEDs of NHS trusts are appointed through NHS England, while foundation trust NEDs are appointed by the council of governors. Public sector appointments follow their own public appointments principles, with open competition and published criteria, and the role combines conventional board oversight with accountability for quality, safety and public money.

UK NED Board Committee Membership Framework

Most of the detailed oversight work on a board is done in committees, and a NED job description should say which committees the appointee is expected to join or chair. On a listed board the three Code committees are audit, remuneration and nomination; banks and insurers add a risk committee; some boards have further committees for sustainability, technology or investment.

Audit committee

The audit committee monitors the integrity of the financial statements, reviews significant accounting judgements, oversees internal audit and the internal control and risk management systems, manages the relationship with the external auditor (including appointment, tender, independence and non-audit services) and runs the whistleblowing arrangements. Under the Code the committee should consist of independent NEDs, at least one member should have recent and relevant financial experience, and the committee as a whole should have competence relevant to the sector. The FRC has also published a minimum standard for audit committees and the external audit, which FTSE 350 audit committees are expected to apply.

Audit committee chair

The audit committee chair is usually a finance-rooted NED: a former CFO or finance director, or a former audit partner, almost always holding a professional accountancy qualification such as ICAEW, ICAS, ACCA or CIMA. Beyond technical credibility, the role needs someone who can manage the external auditor firmly, ask the CFO difficult questions and lead the committee’s report to shareholders. In an FCA- or PRA-regulated firm the role may be a Senior Manager Function in its own right (SMF11).

Remuneration committee

The remuneration committee sets the policy for executive director pay and determines individual packages: salary, annual bonus, long-term incentive plans, share plans, pension and leaving arrangements. It reviews workforce pay and related policies when setting executive pay, and on listed boards it prepares the directors’ remuneration report and policy for shareholder votes. The Code expects the committee to be made up of independent NEDs, and the chair should normally have served on a remuneration committee for at least a year before taking the chair.

Nomination committee

The nomination committee leads the process for board appointments, oversees succession planning for the board and senior management, and keeps board composition, skills, experience and diversity under review. A majority of its members should be independent NEDs. The committee usually commissions the board effectiveness review and acts on its findings, and on listed boards it reports annually on its work.

Risk committee

Banks, building societies, insurers and many larger investment firms have a separate board risk committee. It advises the board on risk appetite and strategy, oversees the chief risk officer and the risk function, and challenges the firm’s capital, liquidity, credit, market, operational and conduct risk positions, including operational resilience. The chair of the risk committee is a Senior Manager Function (SMF10) where the regime requires it, and boards generally look for a NED with direct risk or prudential experience for the role.

UK Corporate Governance Code — UK FTSE-Listed Firm NED Framework Detail

The 2024 UK Corporate Governance Code applies to financial years beginning on or after 1 January 2025, with the new internal controls declaration (Provision 29) applying from financial years beginning on or after 1 January 2026. It is organised into five sections: board leadership and company purpose; division of responsibilities; composition, succession and evaluation; audit, risk and internal control; and remuneration. Several provisions bear directly on how a NED role should be described and filled.

Independence (Provision 10)

The board must decide whether each NED is independent in character and judgement. Provision 10 lists circumstances that are likely to impair, or could appear to impair, independence. They include:

• having been an employee of the company or group within the last five years;
• having had a material business relationship with the company within the last three years, directly or as a partner, shareholder, director or senior employee of a body that has such a relationship;
• receiving remuneration from the company apart from a director’s fee, participating in share option or performance-related pay schemes, or being a member of the company’s pension scheme;
• close family ties with any of the company’s advisers, directors or senior employees;
• cross-directorships or significant links with other directors through involvement in other companies or bodies;
• representing a significant shareholder;
• having served on the board for more than nine years from the date of first appointment.

Where any of these apply and the board still considers the NED independent, it must explain why. In practice, nomination committees screen for these points at long-list stage so that an otherwise strong candidate is not lost late in the process.

Board balance and the senior independent director (Provisions 11 to 13)

At least half the board, excluding the chair, should be NEDs whom the board considers independent. The board should appoint one of the independent NEDs as senior independent director, who acts as a sounding board for the chair, an intermediary for other directors and shareholders, and leads the NEDs’ annual appraisal of the chair. NEDs should meet without the chair present at least annually, and the chair should hold meetings with the NEDs without the executives present.

Time commitment and other appointments (Provision 15)

When making new appointments, the board should take into account the other demands on directors’ time. Before appointment, significant commitments should be disclosed with an indication of the time involved, and additional external appointments should not be taken on without the prior approval of the board, with the reasons for permitting significant appointments explained in the annual report. Full-time executive directors should not take on more than one non-executive directorship in a FTSE 100 company or other significant appointment. Investors and proxy advisers also apply their own “overboarding” policies, so a candidate’s existing portfolio needs to be checked early.

Annual re-election and tenure (Provisions 18 and 19)

All directors should be subject to annual re-election, and the board should set out in the papers accompanying the resolutions the specific reasons why each director’s contribution is, and continues to be, important to the company’s long-term success. The chair should not remain in post beyond nine years from first appointment to the board, although this can be extended for a limited time to support succession planning, with a clear explanation. The nine-year point in Provision 10 works in practice as the expected limit on an independent NED’s tenure.

Board diversity reporting

Separately from the Code, the UK Listing Rules require in-scope listed companies to report, on a comply-or-explain basis, against board diversity targets covering the proportion of women on the board, at least one woman in a senior board position (chair, CEO, CFO or senior independent director) and at least one board member from a minority ethnic background. Nomination committees should build these targets into the role specification and the search brief rather than treating them as an afterthought.

NEDs in FCA-Regulated Firms: SMCR Roles and Proposed Changes

In an authorised firm, the NED job description has to deal with regulatory status as well as governance. Under the SMCR, certain non-executive roles are Senior Manager Functions. Where they apply, the main NED functions are:

• SMF9 — Chair of the governing body;
• SMF10 — Chair of the risk committee;
• SMF11 — Chair of the audit committee;
• SMF12 — Chair of the remuneration committee;
• SMF13 — Chair of the nominations committee;
• SMF14 — Senior independent director.

Which of these apply depends on the firm. Banks, building societies and insurers (dual-regulated firms) and Enhanced solo-regulated firms have the fuller set; Core solo-regulated firms generally have only the chair as a non-executive SMF. An SMF holder needs approval before taking up the role, has a Statement of Responsibilities, is subject to the Senior Manager Conduct Rules and the duty of responsibility, and must be assessed as fit and proper. NEDs who do not hold an SMF are not pre-approved, but they are still subject to the Conduct Rules and the firm must be satisfied they are fit and proper. A NED role specification for a regulated firm should therefore state whether the appointment is an SMF, which committees it chairs, and that the offer is conditional on regulatory approval where approval is needed. Our financial services NED recruitment work is built around these requirements.

Proposed changes: CP26/37 (consultation, not yet in force)

In October 2026 the FCA published CP26/37, its Phase 2 review of the SMCR, alongside a parallel PRA consultation. Comments close on 22 January 2027. These are proposals only, and the current rules continue to apply until final rules are made. The proposals include:

• removing some SMFs and moving several others, including a number of committee chair and senior independent director roles at dual-regulated and Enhanced firms, from prior approval to notification, while keeping the Senior Manager Conduct Rules and duty of responsibility for notified roles;
• streamlining SMF applications and removing the routine submission of Statements of Responsibilities and Management Responsibilities Maps to the regulator;
• raising the thresholds for Enhanced firms, so fewer firms fall into the Enhanced regime;
• removing the Certification Regime, and simplifying Conduct Rules training and breach reporting.

If adopted, these changes would shorten the path into some NED roles at regulated firms, but they would not reduce the personal accountability attached to them. Firms would still need to vet candidates properly, and a notified SMF would carry the same conduct expectations as an approved one. Until final rules are published, boards should plan NED appointments on the basis of the current approval regime and allow for approval timescales in their succession plans.

UK NED Time Commitment and What Drives NED Fees

The single most common weakness in NED job descriptions is a vague time commitment. Candidates and their other boards need to know what is expected, and the Code expects boards to take other commitments into account before appointing. A good specification states the number of scheduled board meetings, the committee meetings attached to the role, the strategy days, site visits and investor meetings, the time needed to read papers properly, and an explicit statement that significantly more time will be needed in periods of increased activity — a transaction, a capital raise, a regulatory issue, a CEO departure or a crisis.

NED fees are not set by a formula, and published survey ranges vary widely depending on who is surveyed. Rather than rely on a single headline figure, boards should benchmark against comparable companies and understand what drives the number. The main drivers are:

• Size and complexity of the organisation. Revenue, market capitalisation, international footprint and group structure all affect the workload and the risk a NED takes on.
• Ownership and governance regime. Main market boards, with Code reporting and annual re-election, generally pay more than AIM or private boards; charities usually do not pay at all.
• Committee chair and senior independent director roles. Most boards pay a basic NED fee plus additional fees for chairing the audit, remuneration or risk committee and for acting as senior independent director.
• Regulatory accountability. Holding an SMF in a bank, insurer or other regulated firm carries personal accountability and usually commands a higher fee.
• Time commitment and situation. A business going through a turnaround, an IPO or heavy M&A activity needs more NED time, and fees reflect that.
• Equity arrangements. In PE-backed and early-stage businesses, NEDs may receive or buy equity. On listed boards the Code expects NED remuneration not to include share options or performance-related elements, because these can compromise independence.

NED fees are normally paid as a fixed annual sum, with reasonable expenses reimbursed. NEDs are office holders rather than employees, and the tax treatment of their fees should be checked with the company’s advisers. Listed company NED fees are usually set by the board (or the chair and executive directors) within any limit set in the articles, and are disclosed in the directors’ remuneration report.

Directors’ Duties, Liability and Protection for NEDs

Company law does not distinguish between executive and non-executive directors. The general duties in sections 171 to 177 of the Companies Act 2006 apply equally to every director, and a job description should say so plainly. The duties are:

• to act within the company’s constitution and use powers only for the purposes for which they are given (s171);
• to promote the success of the company for the benefit of its members as a whole, having regard to the wider stakeholder factors (s172);
• to exercise independent judgement (s173);
• to exercise reasonable care, skill and diligence (s174);
• to avoid conflicts of interest (s175);
• not to accept benefits from third parties (s176);
• to declare an interest in a proposed transaction or arrangement with the company (s177).

The standard of care under section 174 is judged against both the general knowledge, skill and experience reasonably expected of a person carrying out the director’s functions and the knowledge, skill and experience that particular director actually has. A NED appointed for their finance or risk expertise will therefore be held to a higher standard in that area. Being part-time is not a defence to failing to ask questions or to read the papers.

D&O insurance and indemnities

Directors’ and officers’ (D&O) liability insurance is a standard expectation for any NED appointment. The Companies Act allows a company to buy and maintain insurance for its directors against liability, while generally preventing it from exempting or indemnifying directors against liability for negligence, default, breach of duty or breach of trust, except through permitted arrangements such as a qualifying third party indemnity (Companies Act 2006, Part 10, Chapter 7). Candidates should ask to see the policy limits, key exclusions and run-off cover, and whether the company also offers a deed of indemnity. The letter of appointment should confirm both.

Companies House identity verification

Since 18 November 2025, identity verification has been a legal requirement for company directors. New directors must verify their identity before they can be appointed, and existing directors were required to confirm verification when filing their company’s next confirmation statement during a 12-month transition period. Verification is done through GOV.UK One Login or an Authorised Corporate Service Provider, and produces a personal code that is supplied for each directorship. Acting as a director without verifying is an offence, so the appointment timetable for any NED should include this step before the appointment date.

UK NED Required Experience and Qualifications

There is no legal qualification for becoming a NED. What boards look for is a combination of senior experience, sound judgement and the ability to influence without executive authority. The person specification should separate what is essential from what is desirable, and should be driven by the gaps identified in the board’s skills matrix rather than by a generic list.

Senior executive experience

Most NEDs have held senior executive roles — CEO, CFO, COO, managing director or another C-suite position — or have been senior partners in professional services firms. That experience gives them the credibility to challenge an executive team and the practical sense of what can and cannot be delivered. Former chairs and experienced NEDs bring board-level perspective that first-time NEDs are still building.

Sector and functional expertise

Boards usually want a mix: some NEDs who know the sector well and some who bring a different perspective. Specific functional expertise is often the reason for an appointment — finance and audit, risk, technology and cyber, digital, people and culture, sustainability, regulation, international markets or transactions. In regulated firms, the regulator will expect committee chairs to have experience relevant to the committee they lead.

Professional qualifications

For audit committee members and chairs, a professional accountancy qualification — ICAEW, ICAS, ACCA or CIMA — is close to essential, alongside recent and relevant financial experience. For risk committee chairs at banks and insurers, prudential and risk management experience matters more than any particular qualification. Lawyers, actuaries and engineers bring their own professional standards to boards where those disciplines are central.

Director development programmes

Many NEDs, particularly those taking their first board role, complete a director development programme. The Institute of Directors runs the Chartered Director qualification and shorter director courses, and business schools and the Financial Times run non-executive director programmes. These are useful evidence of commitment to the role and of governance knowledge, but boards should treat them as a supplement to experience rather than a substitute for it.

Personal qualities

The qualities that separate effective NEDs are consistent across boards: independence of mind, the confidence to raise difficult issues and the judgement to know when to press and when to let go; the ability to absorb complex papers quickly; integrity and discretion; and the ability to work as part of a board while remaining willing to stand apart from it. Structured interviews and referencing should test these directly. Our NED search process is built to assess them.

Non-Executive Director Role Specification Template

The outline below can be used as the basis of a NED role specification. Replace the bracketed text with your own details and delete the sections that do not apply. Keep it to two or three pages: a clear, specific document attracts better candidates than a long generic one.

1. Role title. [Independent Non-Executive Director / Independent NED and Chair of the Audit Committee / Senior Independent Director].
2. The organisation. [A short description of the business, its ownership, size, markets and strategy, and the governance regime it reports under — UK Corporate Governance Code, QCA Code, Wates Principles, SMCR or charity law.]
3. The board. [Current composition: chair, executive directors, NEDs, investor directors; committees; why the board is recruiting now — succession, a skills gap identified in the board evaluation, a change in strategy or ownership.]
4. Purpose of the role. [Two or three sentences on what this NED is being appointed to add.]
5. Key responsibilities. Provide constructive challenge and strategic guidance to the executive team; contribute to developing and monitoring strategy; satisfy themselves on the integrity of financial reporting and the effectiveness of risk management and internal control; take part in setting executive remuneration and in board and senior succession planning; have regard to stakeholder interests under section 172; uphold the company’s values and culture; [specific responsibilities, for example chairing the audit committee or acting as the board’s workforce engagement NED].
6. Committee membership. [Committees the appointee will join or chair.]
7. Regulatory status. [Whether the role is a Senior Manager Function (for example SMF11) and that the appointment is conditional on regulatory approval, or that the appointee will be subject to the Conduct Rules.]
8. Time commitment. [Number of scheduled board and committee meetings, strategy days and other commitments; location and format of meetings; a statement that additional time will be required at times of increased activity.]
9. Term. [Initial term, subject to annual re-election where applicable, and the expectation of review at the end of the term.]
10. Fees. [Basic fee, any committee chair or senior independent director fee, expenses policy, and any equity arrangement.]
11. Person specification — essential. [Senior experience, sector or functional expertise, independence under the relevant code, capacity to commit the time, and any qualification required for the committee role.]
12. Person specification — desirable. [Previous board experience, specific market or transaction experience, director development, contribution to board diversity.]
13. Independence and conflicts. [Statement that candidates must disclose existing appointments, business relationships and any circumstances that could affect independence.]
14. Process and timetable. [Interview stages, who candidates will meet, referencing and due diligence, Companies House identity verification and, where relevant, regulatory approval; target appointment date.]

UK NED Appointment Framework

A well-run NED appointment usually follows the same sequence. The nomination committee agrees the brief against the board’s skills matrix and evaluation findings; decides whether to use an external search firm (the Code expects listed companies generally to use open advertising and/or an external search consultancy for chair and NED appointments); builds a long list and then a short list; holds interviews with the chair, the nomination committee, the senior independent director and usually the CEO and CFO; carries out referencing and due diligence; and recommends the appointment to the board. In a regulated firm, an application for SMF approval follows where needed. For a wider board rebuild, our board of directors recruitment team can run several appointments as one coordinated process.

Letter of appointment

A NED is appointed under a letter of appointment rather than an employment contract. The letter sets out the terms of the office, and it should be consistent with the company’s articles of association and, for listed companies, the Code. It is common practice for listed companies to make NED letters of appointment available for inspection. The outline below covers the clauses most letters contain.

Letter of appointment template outline

1. Appointment and term. Start date, initial term, re-election requirements under the articles and the Code, and the conditions of appointment (including regulatory approval and identity verification where relevant).
2. Time commitment. Expected meetings and days, with the statement that more time may be needed at times of increased activity, and confirmation that the NED has disclosed other significant commitments.
3. Role and duties. The NED’s responsibilities as a director, reference to the statutory duties in sections 171 to 177, and any specific role such as committee chair or senior independent director.
4. Committees. Committees the NED will join or chair, with reference to their terms of reference.
5. Fees and expenses. Basic fee and additional fees, payment frequency, review arrangements and the expenses policy.
6. Outside interests and conflicts. Disclosure of existing appointments, the requirement for board approval before taking on further significant appointments, and how conflicts will be authorised and managed.
7. Confidentiality. Obligations during and after the appointment, and for listed companies the handling of inside information.
8. Share dealing. For listed companies, compliance with the company’s dealing code and market abuse rules.
9. Induction and development. The induction programme, ongoing training and access to the company secretary.
10. Performance review. Participation in the annual board evaluation and individual review by the chair.
11. Insurance and indemnity. Confirmation of D&O cover, its key terms and any deed of indemnity.
12. Independent professional advice. The right to take independent advice at the company’s expense in furtherance of the NED’s duties.
13. Regulatory obligations. For regulated firms, the Conduct Rules, any Statement of Responsibilities and the obligation to notify the firm of matters affecting fitness and propriety.
14. Data protection. How the company will hold and use the NED’s personal data.
15. Termination. Notice, circumstances in which the appointment ends automatically (for example failure to be re-elected), and return of company property.
16. Status and governing law. Confirmation that the letter is not a contract of employment, and the governing law and jurisdiction.

Tenure

Initial NED terms are commonly set at three years, with a further term subject to review. Under the Code all directors face annual re-election, and a NED who has served more than nine years from first appointment is presumed to have lost independence unless the board explains otherwise. Planning NED refreshment over a rolling cycle avoids several long-serving NEDs leaving at once and keeps committee chair succession orderly.

Cross-Portfolio Architecture and Adjacent Senior UK NED Recruitment Engagement

Exec Capital is part of FD Capital Group, a family of specialist search firms that share a network of senior executives, many of whom also hold board roles. For NED and governance appointments, our sister firm NED Capital focuses on non-executive, chair and trustee roles. FD Capital supports audit committee chair and finance-led NED searches, and Accountancy Capital covers qualified finance appointments below director level. Pooling the networks means a board looking for, say, a former CFO to chair its audit committee can reach candidates across all of them through a single brief.

Within Exec Capital, NED work sits alongside our board leadership searches. We recruit chairs through our chairman recruitment practice, senior independent directors and committee chairs, and NEDs for listed, private equity-backed, AIM, financial services, technology and healthcare boards. Every search is run by our specialist team, with Adrian Lawrence FCA overseeing each mandate.

Frequently asked questions

What does a non-executive director do?

A NED sits on the board without running part of the business. They challenge and support the executive team on strategy, oversee financial reporting, risk and internal control, set executive pay, lead board succession and represent the interests of shareholders and the company as a whole.

Do NEDs have the same legal duties as executive directors?

Yes. The general duties in sections 171 to 177 of the Companies Act 2006 apply to all directors. The standard of care takes account of the NED’s own knowledge and experience, so specialist NEDs are held to a higher standard in their area.

How much time does a NED role take?

It depends on the company, the committees and the circumstances. The letter of appointment should state the expected commitment and make clear that more time will be needed during transactions, crises or other periods of increased activity.

Does a NED in a financial services firm need FCA approval?

Only if the role is a Senior Manager Function, such as chair (SMF9), a committee chair (SMF10 to SMF13) or senior independent director (SMF14). Other NEDs are not pre-approved but are subject to the Conduct Rules. CP26/37 proposes moving some of these roles to notification; until final rules are made, the current approval requirements apply.

How is a NED’s independence judged?

On listed boards, against Provision 10 of the UK Corporate Governance Code, which lists circumstances such as recent employment, material business relationships, family ties, representing a significant shareholder and more than nine years’ service. The board decides, and must explain if it treats a NED as independent despite one of these.

What should a NED letter of appointment include?

Term, time commitment, role and committees, fees and expenses, conflicts and outside interests, confidentiality, induction, review, insurance and indemnity, the right to independent advice, regulatory obligations where relevant, and termination. The outline above can be used as a starting point.