Getting Your First Non-Executive Directorship

According to an Economic Times article in August 2024, “There are more candidates wanting to join Corporate India boards as independent directors than the seats available for them. According to data sourced from Prime Database, there are currently 9,603 independent director positions occupied across the boards of 2,394 companies listed on NSE. In contrast, there are 31,151 independent directors registered in the independent director data bank maintained by the Indian Institute of Corporate Affairs.”

What is driving this trend?

The economic reforms introduced in the early nineties have led to the growth of many companies, impacting millions of consumers. The government has, from time to time, introduced legislation to ensure transparency in corporate governance. The requirement for non-executive, or independent, directors on the board of companies is one such requirement. According to the Indian Companies Act 2013, “Every listed public company shall have at least one-third of the total number of directors as independent directors.”

The role of a non-executive director (NED) is a strategic, responsible, visible role. While it is a career-positive role for people at all stages, it is becoming especially popular with senior leaders recently retired from full-time roles in companies, looking to continue their business engagement with a reduced commitment of time.

Of course, the role also carries handsome remuneration commensurate with the time demanded.

Obtaining Your First Non-Executive Directorship

Being a competitive position, with greater demand than availability, you may need to work towards getting the role.

What can you do?

Update your profile

This is also a good opportunity to update your profile to make it suitable for an NED role. Fill the obvious gaps through training and reading. You should view this as an opportunity to refresh your personal brand.

It is also advisable to ensure that your profile is consistent across public platforms. Search firms nowadays dig into all available profiles of candidates they are considering.

Network

“How does one network when one is not yet in that space?” you might ask.

While not an unreasonable question, it must be remembered that we are building our networks all the time. Hence, if you consider yourself to be a suitable candidate for an NED role, you ought to have connections with other people who are either already NEDs or aspire to be. If you don’t, you need to ask yourself if you are targeting something too far from your comfort zone.

There are many ways of building on networks, such as participation in industry events, reaching out to others through existing networks, like-minded networks on social media platforms, etc.

Build a target list

Most people will have a leaning towards an industry, or function, or something else, in our profile, based on what we have done so far. Familiarity with the space should be a help in building a short list of companies you believe you can be a good fit in an NED role.

Once this has been created, you would need to monitor vacancies (through search firms, job boards, company networks or through direct contact with the company).

Grow into it

Volunteering for pro-bono assignments with companies is a good way of expressing your interest in a long-term strategic role. It will also enable the company to assess your suitability.

Starting with smaller companies in the space your expertise lies in could be a good starting point.

Preparing for Your First Non-Executive Directorship

Until the time you land the role you desire as an independent director, you should prepare yourself for it.

How?

Study the requirements and build an understanding

Being well prepared is half done, they say.

The role of an NED could be different from that of an executive director, with little day-to-day involvement in execution. The time commitment is also vastly different. You should also build an understanding of your rights and duties as an NED. The better prepared you are, the greater the likelihood of landing a suitable role.

Assess your suitability

While an aspirant might hope for landing a dream role and learning on the job and growing, the recruiter would normally expect a new hire to hit the ground running.

Since you are aiming for your first NED, the higher the suitability of your past experience and present skills to the requirements of an NED role, the higher the chance of success.

Sign up for training

The free market creates products and services when a need is sensed. Non-executive directorship is no different.

The surge in interest in NED roles has led to a slew of training programmes being offered for those so inclined. The providers include:

• Reputed business schools such as IIM Bangalore, which offers the Independent Directors Certificate Programme,
• Consulting firms, such as KPMG’s Independent Director Certification Programme,
• The Indian Institute of Corporate Affairs’ The Centre for Independent Directors offers a variety of resources such as E-learning modules, case studies, self-assessment tests, etc.
• And many others.

Seek guidance

Finding a coach or a mentor might be one of the easiest and most effective techniques to realise your dreams.

Conclusion

Ushankk supports organizations in fulfilling their independent director positions. We are also engaging with the Indian Institute of Corporate Affairs (IICA) to access the independent director database to fulfil client requirements.