At a time when corporate governance is more scrutinised than ever, there is (arguably) no action a company can take to bring additional rigour to its processes than to appoint a non-executive director to its board. So, what should you be aware (and wary) of if you are asked to become a non-executive director of a private company?

Firstly, non-executive directors should be aware that they have the same legal duties as executive directors. Technically, the legal framework for directors doesn’t distinguish between executive and non-executive roles, so any new non-executive should make sure they are aware of their legal duties and responsibilities as directors. A good way to do this is to suggest that the entire board have “director duties” refresher training. Make sure you know what your section 172 Companies Act directors’ duties really are!

For your own personal comfort and protection, ask the company if there is D&O insurance in place and whether the insurance brokers have confirmed it is suitable for the company.  Additionally, consider asking if directors are given a specific indemnity from the company for actions that are properly taken as a director.

Take your time before accepting the role to genuinely understand your non-executive responsibilities. Make sure you can commit the time to the role: if something goes wrong, saying you were too busy to read papers or to attend meetings would not be a legal defence. Non-executive roles can vary in remit, from being an overseer and adding different perspectives to being asked to lead and drive projects and being responsible for committees. Don’t think there is a standard non-exec role.

Be very clear with yourself and the rest of the board about what you want to bring to the role and understand why the company wants you involved. Are you bringing specific industry experience? Or a different perspective and skill set? Is it independent scrutiny and challenge that is needed? When considering a role, be sure the company wants to embrace the governance that a non-exec can bring and isn’t trying to virtue signal by making an appointment.

Remember, although you may not be an executive and are  not involved in the general running of the business, you are still a representative. How you act and what you do is important and will be noted. Take the time to meet the staff and understand their concerns so that you can be well informed at board meetings. This will enable you to help with insight and perspective, rather than solely receiving insight by the executives (who will otherwise control the information that you receive), leaving you potentially less effective as a non-exec. Make it known to the business that you welcome discussion, debate, input and information from anyone in the business.

Be prepared – and push the board to be ready – for when something goes wrong. Even the best run companies hit bumps. This could be anything from financial and reputational challenges to conflicts within the business. Whatever it is, make sure that as a non-exec you are involved in helping to manage the challenge and that the company responds well. Particularly as your name is liable to be mentioned in public, especially in a reputational challenge.

While this may seem a cautionary piece, the role of non-executive director is becoming increasingly common and important. We have seen more and more reports, recommendations and legislation being extended to large private companies that insist on governance principles and processes. While not all private companies are required to have non-executives or comply with certain standards, there is a primary expectation that all businesses must act more in line with those standards (such as the Wates Principle). Failing to do so will result in corporations being challenged by customers and their communities.

It is an exciting and challenging time for companies, with hot buzz words like “purpose”, “values” and “governance” when incorporating a non-executive. There has never been a more high-profile time to be a non-executive director, however, directors and companies need an appreciation for what the role requires and to allow non-execs to bring experience, insight, and challenge to a board.