Non Executive Director- Is there a more effective alternative?

Corporate Governance Pressures - CEO Peer Group Support

Corporate Governance Pressures – CEO Peer Group Support

The role of managing director or chief executive officer (CEO) can be a lonely place. There are times for some CEOs when they have nobody to confide in despite having a board of directors. A non executive director may be recruited in order to provide that support, advice and accountability to help them drive a company forward. However, a non executive director has a fiduciary duty to the company and its shareholders which comes before the needs of the CEO. Therefore, the non executive director can never be a true confidant to the CEO.

So is there are an alternative?

This article looks at how a CEO peer group might replace the traditional role of non executive director.

A CEO peer group is a group of Managing Directors and CEOs that meet once a month to process and work through challenging issues so that they can drive their businesses forward. A CEO peer group acts in many ways like a non executive director. However, they have a number of advantages over a non executive director.

  • They are not accountable to the shareholders but to the CEO.
  • Their advice is truly independent as they don’t receive any financial compensation from the company or the CEO.
  • You get up to 15 experienced business professionals working on your problem.
  • You get a wide range of perspectives applied to your challenge from different business sectors.
  • You can discuss highly confidential and sensitive issues that would be difficult even with a non executive director such as a developing an exit strategy if you are an owner/manager.
  • A non executive director will bring with them their network. A CEO group facilitated by a third party will bring with it the networks of up to 15 other people and also the network of the facilitator’s organisation which can be considerable if they are a global organisation.

So in summary, a non executive director can be a great asset to a CEO, however, a CEO peer group amplifies those benefits and does not have the fiduciary downside. Moreover, a CEO peer group is likely to be cheaper than a non executive director.

For more information about a CEO peer group in your area, please go to www.mdgrowthboard.co.uk or call 0845 053 7417

Peter Dickinson is an experienced, director, high growth business coach, facilitator, interim, digital marketeer, customer services champion, project manager, change management consultant and advisor and has worked with over 300 companies helping them develop a systematic approach to growing their businesses. Working with companies as a high growth business coach, facilitator or interim, Peter will help crystallise the vision, rationalise strategy, identify the most cost effective routes to market including the development of new products, develop a consistent sales approach, champion customer service, streamline processes and identify key performance indicators to help drive the business to meet the goals of the main stakeholders. LinkedIn: http://www.linkedin.com/in/e4abusiness (Open Networker) Twitter: http://www.twitter.com/Enterprise4all Facebook: http://www.facebook.com/KUB.LTD Web site: http://www.kub-uk.net

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Posted in Advisory Boards, Business Coaching, CEO Peer Group, Corporate Governance, Non Executive Director, Peer Group Advisory Board
2 comments on “Non Executive Director- Is there a more effective alternative?
  1. Peter your article is a great overview of the value many CEOs find in belonging to Peer Groups. I too lead them here in the US and find many do suffer from the sense of isolation given the factors you outlined.

  2. […] Non Executive Director- Is there a more effective alternative? (peterdickinson.net) […]

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