What is a NED, and how do they work?

The short version

A Non-Executive Director (NED) is a member of a company's board of directors who does not have day-to-day executive responsibility for running the business. They are appointed to bring independent judgement, specialist expertise, and oversight to board decision-making — and to hold the executive directors to account on behalf of the shareholders, the regulator, and (depending on the company's status) other stakeholders.

A NED is a director, with all the legal duties and personal liability that go with that. They are not a consultant, not a freelance advisor, not a "fractional executive", and not someone who can hide behind "I just gave them advice — they made the decision". The Companies Act 2006 makes the same statutory duties apply to executive and non-executive directors alike.

What a NED actually does, week to week

The day-to-day work of a NED falls into four roughly equal categories:

1. Board meeting attendance and pre-reading

Most boards meet between 6 and 12 times a year. Each meeting comes with a board pack — typically 50 to 200 pages of management accounts, KPI reports, risk register updates, strategic papers, and ad-hoc items. A NED's job is to read all of it, form a view independently of management, and turn up ready to challenge, support, or steer as the discussion warrants. Reading takes 4-8 hours per pack. The meeting itself is half a day to a full day.

2. Committee work

Most NEDs sit on at least one board committee — Audit, Risk, Remuneration, Nomination, or (increasingly) Technology, Cyber, or AI. Committees typically meet 4-6 times a year, on different days from the main board, and the chair of each committee carries an additional workload of agenda-setting and report-writing. Cyber NEDs are most often pulled into the Audit Committee, the Risk Committee, or — in larger or more regulated organisations — a standalone Technology / Cyber Committee.

3. One-to-ones with the executive team

The board meeting is the visible part of the role. The invisible part — and arguably the more impactful part — is the steady cadence of one-to-one calls with the CEO, CFO, CTO, CISO, and other senior executives between meetings. These are where the real coaching, challenge, and steady-hand-on-the-tiller work happens. A NED who does this badly is a tax on the management team. A NED who does this well is one of the most leveraged roles in the company.

4. Ad-hoc work and incidents

Strategic decisions, fundraising, M&A, regulatory enquiries, executive search, crisis events, and material incidents all draw on the NED's time outside the meeting cadence. For a cyber NED, the "ad-hoc" category disproportionately means being on the phone within hours of a serious incident, walking the executives through what to do, what regulators will expect, and what the board itself needs to do to discharge its duties.

NEDs in the UK Corporate Governance Code

Listed UK companies follow the UK Corporate Governance Code (the "Code") on a comply-or-explain basis. The Code expects:

• At least half the board (excluding the chair) to be independent NEDs.
• A Senior Independent Director (SID) to act as a sounding board for the chair and a route for shareholders if the chair channel fails.
• An Audit Committee, a Remuneration Committee, and a Nomination Committee — all chaired by independent NEDs.
• Annual board effectiveness reviews, with periodic external review.

Private companies are not bound by the Code, but those backed by institutional investors, regulated by the FCA / PRA, or operating in critical national infrastructure are increasingly expected to follow the spirit of it. The Wates Principles apply to large private companies and explicitly call out the value of independent NED voices on the board.

NED, advisor, consultant, fractional executive — what's the difference?

NED

Statutory director. Part of the board. Personally liable for board decisions in the same way executive directors are. Filed at Companies House as a director. Duty of care, skill, and diligence under sections 171-177 of the Companies Act 2006. Cannot legally be told "you don't need to know about that" — the duty applies even if information was withheld.

Advisor

Not a director. No statutory duties. Provides advice; the board takes the decision. Can be retained on flexible terms; can be ignored; not in the room when the vote is taken. Useful when the board needs specialist input but does not want to add a director.

Consultant

Engaged for a specific deliverable on a time-and-materials or fixed-fee basis. Not on the board. Reports to whoever signs the SOW. Useful for projects, not for governance. The relationship ends when the deliverable lands.

Fractional executive (fractional CISO, fractional CTO)

Part-time member of the management team — sits below the board, runs a function, has direct reports. Typically two or three days a week per company. Very useful in scale-up companies that need executive depth but don't yet have the volume of work for a full-time appointment. Not a substitute for a NED — a fractional CISO sits inside the management line, a NED sits outside it.

Chair / Senior Independent Director (SID)

Specialist NED roles. The chair runs the board. The SID is the second-in-command and the route shareholders use if the chair channel breaks down. Both roles are NED appointments at heart, but with additional time commitment and additional pay.

Independence — what it means and why it matters

A NED's value is in independent judgement. The Code is precise about what undermines independence: holding executive office in the company in the last five years; material business relationships with the company; cross-directorships with executive directors; substantial shareholdings; representation of shareholders; service on the board for more than nine years.

For a private company outside the scope of the Code, the principles still apply. A NED who is the CEO's brother-in-law, or who runs a business that supplies the company, is not independent — even if they are smart, well-intentioned, and technically competent. The independence test is the thing that lets a NED ask "are we sure about this?" without anyone in the room wondering whose side they are on.

Time commitment

Realistic ranges, drawn from public guidance and what I see in practice:

• Smaller private company / start-up: 1-2 days per month — typically a board meeting plus pre-reading and one or two one-to-ones.
• SME / scale-up: 2-3 days per month — board, one committee, ongoing one-to-ones, occasional ad-hoc.
• Mid-market regulated business: 3-4 days per month — board, two committees, deeper one-to-ones, regulator engagement.
• Listed company / large mid-market: 30-50 days per year — board, multiple committees, AGM, investor engagement, regulator engagement.
• Chair or SID role: roughly double the equivalent NED time.

The contract usually states a minimum commitment and an expectation that the NED will be available for material incidents on top. A serious cyber breach can absorb a fortnight of a NED's time in a single quarter — the contract has to allow for that.

Term length and renewal

Typical first appointment is for 3 years, with a review at the end and a possible renewal for a further 3 years. The Code has a "nine-year independence sunset" — beyond nine years, the company has to explain why a NED is still considered independent. That sunset is a feature, not a bug: boards benefit from periodic refresh.

The legal bit

The seven statutory duties of a director (Companies Act 2006, sections 171-177):

1. To act within powers conferred by the company's constitution.
2. To promote the success of the company for the benefit of its members as a whole, having regard to the listed factors (long-term, employees, suppliers, community, environment, reputation, fairness).
3. To exercise independent judgement.
4. To exercise reasonable care, skill, and diligence — judged against both an objective standard (what a reasonably diligent person in the role would do) and a subjective standard (what the actual director, with their actual experience, ought to know and do).
5. To avoid conflicts of interest.
6. To not accept benefits from third parties.
7. To declare interest in a proposed transaction or arrangement with the company.

All seven apply equally to NEDs. The "reasonable care, skill, and diligence" test is where subject-matter expertise matters: a NED appointed for cyber expertise will be held to a higher standard on cyber decisions than the rest of the board, because they are expected to know more.

Insurance and indemnity

Any NED appointment that doesn't come with a Directors & Officers (D&O) liability insurance policy is, in plain language, a bad deal — for both sides. The policy covers personal liability for breaches of duty (and the legal costs of defending against allegations of breach). Companies should be paying for this; NEDs should be reviewing the policy wording before signing the letter of appointment. I cover this in the engagement-process page.

Continue: The benefits a NED brings · Cost · How to engage me.