What is a trustee or NED
Beyond the reasons for wanting to join a Board, what essentials do you need to know before considering whether to apply for a role? Here are some things to think about; they’re not designed to put you off, and they are a bit dry, but they’re worth knowing!
You must be at least 16 years old to be a trustee of a charitable company or a charitable incorporated organisation (CIO), unless the charity’s governing document says you must be older. You must be at least 18 to be a trustee of any other type of charity.
This is the one consistent factor people underestimate when taking on their first board role. It’s a good idea to think about your time and if you are realistically able to give it. Having the backing of your line manager if you are employed so that you are not using up any annual leave is essential– many companies openly support their employees taking the odd voluntary day but those alone won’t be enough time to cover every meeting.
Board are increasingly holding meetings virtually, with many favouring a split between virtual/in person, which will help with managing your time but it is still a considerable part of your day and if you have to travel you’ll need to factor that in.
What you see advertised e.g., 1 day a month, is an average amount of time a board role can take up spread across a year – this usually breaks down as:
- Full Board meetings (usually four a year and can last between 2-4 hours); plus an Away Day/Strategy Day, which tends to be a full day.
- Sub-committees – you might be asked to join one, it could be around finance and audit, HR and employee wellbeing, or income generation. Those meetings can be held on the same day as the full Board meeting, but many organisations will hold them separately throughout the year; factor in additional meetings of around 1-2 hours.
- Board papers: depending on the size of the charity they can be considerable documents to read and although you’ll learn what’s relevant to you as you gain experience, you will likely spend quite a few hours going through them. And then reading them again a day before the meeting!
Check out our videos on your YouTube channel to hear how trustees and NEDs have learned to manage their time.
What is the difference between a Charity trustee versus a Non-Executive Director?
Trustee, Director or Non-Executive Director: it can get a little bit confusing when considering the different non-executive roles that exist, but overall, they bring similar responsibilities and accountabilities as a group to ensure an organisation is well run and fulfilling its purpose.
Although you don’t have to be an expert in governance, you do need to be proactive in your approach to learning about it and you need to understand what your role is on that Board and what your duties are.
- Trustees act collectively to set the strategic direction of the organisation, periodically review its achievements at Board meetings and provide a high level of scrutiny.
- Trustees are not employed or paid by the charity – but the Board is collectively responsible for ensuring that:
- the charity is well run
- manages its finances responsibly
- carries out its purpose for public benefit
The specific duties of the Board of Trustees will be set out in the organisation’s governing document which can be called its constitution, articles of association or trust deed. This sets out the rules by which the organisation must be run and includes: its purpose (Objects) in existing, who it benefits, the activities it can be involved in, where it operates, and the powers of the Board.
All trustees, not just the treasurer, are responsible for the charity’s finances and should be able to understand, consider and comment on financial information.
- a company director of a charity which is structured as a company
- a senior employee of the charity, but not a company director
Anyone who is a company director should be registered as such at Companies House and has certain duties under companies’ legislation. Company directors of company charities are charity trustees and must be registered with the Charity Commission as well as being registered with Companies House.
It’s rare for charity trustees to be prosecuted by third parties but understanding the differences between incorporated and unincorporated charities is worth knowing in terms of what personal liability you might hold.
Incorporated charities the liability of trustees is limited to if they have acted negligently or been dishonest or caused loss to the charity. For unincorporated charities, trustees enter into a personal contract with the charity (which isn’t a legal entity) and the contractual performance of the charity will fall on them including any financial losses. Most unincorporated charities should offer trustee indemnity insurance – it’s worth checking if you are unsure.
The role of the Non-Executive Director holds some similarities to a trustee; they are responsible for the active governance of an organisation. It is their job to act as an independent member of the Board, advising on the long-term strategy and providing constructive challenge and sometimes direct intervention to the Executive when necessary. One main difference is that Non-Executive Director roles may be remunerated, with the pay differing quite considerably between public and private sector organisations.
Why become a trustee or non-executive director?
Whether you are driven by social action and the desire to influence change in society or are volunteering your free time to a cause or organisation that you are passionate about, helping steer an organisation towards achieving its goals is very rewarding thing to do.
You may have some doubts about what value you might bring to a Board at this early stage of your life or career, but we want to show you that your experiences and skills are valuable to a wide range of organisations and how to go about selling yourself. You can’t be shy about putting yourself forward – Boards need engaged and committed members to keep the organisation on track and achieving its goals.
What you will gain Becoming a member of a board is an exciting and new stage in your professional or personal development. You will get to see how an organisation is governed and see how different people apply their experience and knowledge to ensuring the organisation is running correctly. You will also create new networks and meet a variety of different people – from fundraising to HR or finance, every Board needs a wide variety of skills and professional experience represented for it to be effective. And being on a Board will help you develop your confidence and leadership abilities and show you what you can achieve.
What a Board will gain by having you on it You will bring your unique perspective of being a younger person into what is a predominantly older group of professionals. Your lived experience, insights and new ways of thinking are invaluable to help create a diversity of thought that is essential for a Board to truly thrive. As a new pair of eyes, there will be questions they haven’t thought of that will help shed light on how they can improve what they do and how they operate.
Building your experience
Only 10% of trustee roles are advertised externally – so if you are proactive and are interested in volunteering your time and energy to an organisation that calls to you, reach out and see how you can get involved. Maybe be a bit bold and tell them why they need your voice represented in their organisation? They might not have thought about it!
Volunteering with local youth or community organisations is a really good way to gain exposure to how organisations engage at a grassroots level. You could consider becoming a governor of your local school or joining a Youth Committee or Advisory Panel of your local authority or NHS Trust –think about what interests and excites you and start researching. You will be surprised at how many opportunities there are to start gaining board level exposure before applying for a full Board role.
There are many networks and organisations dedicated to helping younger people gain board experience in particular the Young Trustees Movement, Getting on Board and Beyond Suffrage.
LinkedIn – if you have a profile, add that you are interested in joining a not-for-profit board so that recruiters and organisations looking directly for candidates can find you more easily. If you don’t have a profile yet, think about creating one, it’s free and a really good way to showcase who you are and what skills and abilities you offer. It’s not just for people with MBA’s or degrees – it’s a brilliant way to start creating connections and increasing your own network and profile.
The hard and soft skills of successful non-executive directors
When applying for board positions, non-executive directors are expected to bring strategic and leadership skills to the table. In today’s challenging business climate, soft skills are also in high demand.
Having a wealth of experience to bring to a non-executive board position is a clear advantage. Application processes for board roles are competitive, and the time to put your case forward is limited.
So, how do you prepare yourself when applying for non-executive directorships?
Juliet Taylor, CEO of board recruiters Starfish Search [include link], says, “Understand what the gap is that the organisation is trying to fill and make sure you are clear and confident about what you can offer.”
What is your signature skill?
Across the globe, companies are experiencing extensive regulatory, technological and financial challenges. Managing business through these challenges requires highly-skilled and experienced board directors.
“Most boards look for: knowledge, governance expertise, networks, and connection with audiences,” says Taylor.
“You don’t have to bring all four things, though, so [ask yourself] what’s your signature contribution?”
You can make a difference.
Highly valued non-executive directors are well-versed in emotional intelligence – they can quickly grasp other people’s characteristics and agendas.
“Understanding the nuance of board roles is also important,” says Taylor. “Consider where the organisation is trying to get to and what you can bring to the party.
“We are seeing more and more people from all sectors looking for more purposeful ways of using their skills and who want to make a positive contribution to society.
“Always remember: this is your time, so don’t forget to tell the organisation what the role would give you in return.”
What professional disciplines, or hard skills, are currently in demand on UK boards?
“The pandemic recovery period means that effective non-executive leaders are in demand more than ever before,” says Taylor.
“We are seeing increasing numbers of non-executive board members being sought for organisations who need to rebuild or refocus their strategy.
“We have seen a strong trend in boards looking for people with digital expertise and backgrounds in customer service and organisational or cultural change.
Those with financial skills and profit-making skills are now high in demand.
“People who can help increase income or support financial management are also towards the top of the list, as are people who can bring insight into, and connection with, customers and audiences.
However, it isn’t all about increasing the bottom line and opening the right doors.
“One of the shifts we are seeing is a marked move away from focusing too much on professional disciplines. Organisations in all sectors are much more aware of their diversity now than they were before 2020. Creating strong, versatile and authentically diverse teams is now a consistent theme.”
What soft skills are in demand?
An effective board member is hard to define, mainly due to their soft skills, such as the ability to listen and knowing when to speak.
“It’s hard to tell a great non-executive on paper because so much of the role is about how people operate and not what they have done,” says Taylor.
“Great board members are people who understand how to deploy their expertise in a way that has an impact in a non-executive board setting.”
Self-awareness is a powerful skill
“The skills that make the difference are the capacity for self-reflection, so people with insight and self-awareness, also diplomacy and listening skills,” says Taylor.
“Increasingly, people are being expected to bring all their experiences into the board room, not just their professional accomplishments. Sound judgement is key to doing this well and to understand how you can add value.”
When it comes to the interview
This is your time to reflect and prepare. The role you are applying for needs to be fulfilling and worthwhile for you as well.
Be clear. Tell the organisation what you can bring to the table to help it reach its goals and why it matters to you.
This article was written by Juliet Taylor in partnership with Women on Boards.