External Expertise: Non Executive Directors (NEDs)

A NED is a member of a company's board of directors who is not responsible for the daily operations and management of the company; they are fundamentally 'outside parties', acting as independent advisors, valued for their insight.

In the UK, under the Companies Act 2006, a director is defined as any person occupying the position of a director, there is no legal distinction between a director and a NED, their legal duties, responsibilities and potential liabilities remain the same with the distinction lying in the role that they perform.

How a NED can add to your care group

Any new or existing entrants to the care sector can benefit from strong corporate support from NEDs which in turn can strengthen the growth of a care sector business. In the corporate governance of a care business, an NED can provide an independent view and perspective on boardroom best practice and the running/governance of the care business. They are able to oversee and constructively challenge management in its implementation of strategy within the care homes governance. In particular, a NED should consider:

• The quality of the current executive directors and NEDs of the care business.

• The business plan, strategic aims and objectives of the care business.

• The care businesses' governance procedures, financial position, investor relations, financial management and risk management procedures.

• The care business' reputation.

What must your care business consider?

A care home business must therefore ensure if it recruits NEDs, that they complement the balance of skills, experience and perspectives of the existing board - they do not need to necessarily know the care home industry, as this should ideally be provided by the executive directors, as their value lies with their ability to identify and advise upon new challenges, initiatives and market opportunities within the care sector.