Independent judgement, for exactly as long as it matters

A non-executive director holds a formal seat on the statutory board, carries Companies Act 2006 fiduciary duties, is registered at Companies House and takes real legal accountability. A board advisor is informal, carries no legal duties and no board seat. Advisory input is often the right first step for early-stage founders. A formal NED is the right structure when investors require it, when you are heading toward AIM, or when the weight of the decisions calls for real board-level oversight. Early-stage founders often start with an advisor and move to a director seat as capital and complexity arrive.

Typically 2 to 4 board meetings per year (1 to 2 hours each), plus pre-meeting preparation (1 to 2 hours per meeting). Committee work, if relevant, adds 4 to 8 hours per year. On-call availability for founder or CEO conversation is expected but unscheduled. The commitment rises around defined moments: a fundraise, a transaction or a governance review, then settles again. Experienced directors batch the work efficiently and know how to prepare without losing a week to it.

Non-executives have the same seven statutory duties as executives under Companies Act 2006: act within powers, promote the company’s success, exercise independent judgement, exercise reasonable care and skill, avoid conflicts of interest, refuse benefits from third parties and declare interests. Directors carry personal liability. Directors’ and Officers’ liability insurance is standard and matters. Good non-executives accept the risk because they have experience navigating it. The governance process itself, with regular board papers, clear decision trails and early-warning flags, mitigates the real risks.

Independence is defined by absence of relationships likely to impair judgement: no recent employment, no material business ties, no large shareholding, no family ties, and no tenure longer than 9 years. This absence-based framing leaves room for board-level judgment rather than bright-line rules. The market cares because independent NEDs are required by QCA, Wates and the UK Corporate Governance Code AND because they signal to investors that the board can push back credibly on the founder. Independence is a judgment call, not binary. Our placement process stress-tests it thoroughly.

Standard first term is 3 years, often renewable for a further 3 years. Growth companies rarely commit longer; the business pivots and the board composition changes. At the end of year 3, a formal review decides whether to renew. Early exits, founder changes or investor transitions can shorten the term, and that is normal. The arrangement is built with the expectation of renewal if it works, but not a given.

Compensation varies by stage and company size. Early-stage scale-ups typically offer a modest cash retainer (£10,000 to £25,000 per annum) plus equity (0.25% to 1%, vesting over 3 to 4 years). AIM-listed and larger private companies offer cash retainers (£30,000 to £60,000 per annum) plus committee fees. Some day-rate roles exist (£500 to £1,500 per day) but are less common for formal board seats. These are market benchmarks. The best people care about the business, the team and the role itself. Compensation matters, but it is not the deciding factor for experienced directors.

If you are AIM-listed: the QCA Code applies and is mandatory (comply or explain). If you are a large unlisted private company: Wates Principles apply as voluntary guidance, but adoption is increasingly expected by lenders and PE investors as a market signal of governance maturity. If you are Main Market listed: the UK Corporate Governance Code applies. If you are a small private company: no code is required, but Wates adoption is increasingly adopted as a competitive governance signal. We can help you map the right code and structure for your company.