The Seeking of the Non-Executive Directors (NEDs) Essay

The Seeking of the Non-Executive Directors (NEDs) - Essay Example Consequently, this had resulted in endeavors to make the directors more liable for their strategies and actions. The inclusion of non-executive directors in the board of an organization has an imperative part to play in this context and will be the subject of concern in this study (Stewart, n.d., p.2). The non-executive directors (NEDs) perform multiple functions in an organization. In accordance to the Combined and the UK Codes of Corporate Governance together with the UK Stewardship Code, the NEDs seek to challenge the chairman and the executive directors in the board, offer expertise, knowledge and insight to the board, elevate principles of corporate governance, and guide the board on business strategy (Lewis, 2010, p. 5). The role of the non-executive director The latest financial disaster and the resulting bail-out of many financial organizations have impelled the discussion regarding the position and efficacy of non-executive directors (NEDs) in context of corporate governance . ... Fundamentally, the role of a non-executive director is to offer a resourceful contribution to the organization by presenting objective criticism to the board. The non-executive directors seek to bring in independent opinion on matters associated with strategy, resources and performance of the organization. Additionally, it is also expected that the NEDs would provide their independent verdict on key appointments to be made in the organization as well as its standards of conduct. The non-executive directors are inducted in the board of an organization owing to their wide range of experience, their apt competence and meticulous personal attributes. Furthermore, the NEDs might possess some expert knowledge and understanding that would aid the board by endowing it with helpful insights or key contacts in associated businesses. Nevertheless, the utmost objective of having the non-executive directors in the board is their independence with respect to the organization’s management as well as its involved parties. This implies that the NEDs bring in an extent of impartiality to the board’s discussions and negotiations, and hence play a crucial task of monitoring the management of the organization. According to the Combined Code of Corporate Governance (2008), the board of any business organization should comprise of ample number of autonomous non-executive directors having adequate calibre, so that their opinions carry considerable weight in the discussions of the board during strategy formulation and other important issues. In addition to providing added competence, proficiency and perspective, the introduction of NEDs in an