Having an independent Non- Executive Director on your board is essential for growth Bryan Foss Independent Non-Executive Director, Risk & Audit Chair, Board And Business Development Adviser, Visiting Professor Bristol Business School Is your board fit for business? Wednesday 22 May Victoria Street Bristol

Background Client side and supplier side perspectives Varied and hybrid background Independent NED portfolio Time available for ‘Interventions’ when called Also for continual learning & unpaid helping!

Challenges Grow the value of the business, organically or perhaps with exit in mind – What defines value? To which potential buyers? – Long term income or short term growth, profit synergies etc. A clear core purpose? – Know we need to be focused, but too busy to stop and think? Usually results in wasted resources, whether money, people or time window

How an NED might help Get a busy executive team to stop and think Focus efforts on an appropriate strategy and pre-test executives before public actions Help to keep stakeholders (investors, advisers, regulators etc.) onside, so ‘safe to deal with’ Be available for coaching & support via phone, & coffee meetings, also at critical times Give independent & committed advice (shared risk) at a very competitive cost

Helping with revenue specifically Routes to market, via partners etc. Knowledge of other markets, Asia/US etc that might balance revenue risks Influencing the market as an independent Challenging re pipeline content and assurance of closing, leading to confirmed cash - or looking at cost reductions / working capital fund raises to reduce liquidity risks Engaged & helpful while independent / Non-exec

What’s the business case? Cost of an NED – Listed company shares more public risk. More pay needed to reflect this – Private company NED has limited risk as director. Payment closer to a day rate – Can use shares or options etc. Best to pay at least their costs (e.g. expenses, VAT, tax on income?) so that they are not risking more than time Value – 12 to 20,perhaps 30, days of consultancy at half-price – Connectivity, communications and influence with stakeholders – 24/7 access to a second opinion before acting? Risks & mitigation – NED’s don’t engage usefully : Set clear expectations as team member – NED have strong exec views of their own : Coach the NED! – NED doesn’t add value : Say so – then move them on….

Rightsizing governance Why: ‘Safe to deal with’ Clarity of core purpose to all stakeholders Board skills must be ahead of company maturity and status, not behind Consider value of risk management / independent assurance. SID role? Value of a part-time independent chair? – Name/experience, also advocacy & team oversight

Expect & support due diligence Access to financials of course, including pipeline Access to key stakeholders (investors, partners, clients and employees – also advisers) Floor walking / back to the floor (internal & external). Listen to calls, review complaints. ‘What is the one thing that would help’? Mystery shop: Buy and use products & services On-going engagement process, not one-off

An external perspective You don’t have time to get out enough Need to keep up with markets, alternatives, regulation, risks, best advisers, etc. Can explore on your behalf and come back with a focused summary – e.g. how will the bribery bill (or new annual reporting rules etc.) affect your business? Introduce you at the right time, making meetings and outcomes far more effective

Essential conditions Awareness Openness Willingness Teaming Culture

Summary ‘Growth’ of business maturity and value, not only revenue growth (although this is an essential component) Lower cost, lower risk, ‘independent’ (actually supportive of your team in many ways) access to their experience and the experience of their networks Need to know or learn what you need, provide space for suggestions and keep challenging towards outcomes Etc.

Is your board fit for business? Wednesday 22 May Victoria Street Bristol