Board building8 min read
What does a non-executive director do at a startup?
Four jobs: hold the chief executive to account, bring pattern recognition, open doors, and turn the board into a decision-making body.
Key points
- The role is oversight, not management. A non-executive who starts doing the work has stopped being a check on it.
- Every director you appoint takes on a statutory duty under section 172 of the Companies Act 2006, the same duty as the founders.
- Expect one to two days a month at seed stage, rising with committee work.
- Typical cost: £10,000 to £20,000 plus equity at early-stage technology scale, £5,000 to £30,000 at SME scale.
- The single most useful thing a good one does is ask the question nobody in the room wants to answer.
What does a non-executive director actually do at a seed-stage company?
Four things. They hold the chief executive to account without managing them. They bring pattern recognition from having seen the problem before. They open doors to customers, capital and hires. And they turn the board from a reporting ritual into a decision-making body.
At seed stage that is typically one to two days a month, for £10,000 to £20,000 a year plus equity. What they do not do is run anything, sell for you, or raise your round.
What are the four jobs?
Holding the chief executive to account. Not managing them — holding them to what they said they would do. At seed stage the CEO usually has no boss, no peer group and no one who will tell them their plan does not add up. A non-executive is the only person structurally positioned to say so and still be in the room next month.
Pattern recognition. The value is not general wisdom, it is specific recall. Someone who has taken a business through FCA authorisation, or scaled a sales team past the first ten hires, or been in the room for a down round, knows which of your current problems is fatal and which is noise. That judgement takes fifteen years to acquire and about ninety minutes a month to deploy.
Opening doors: introductions to customers, to capital, to senior hires. Be precise about this in the appointment conversation, because a director who will make five specific introductions is more valuable than one with an impressive network they never open.
Making the board work. Most early-stage board meetings are the chief executive presenting to investors for ninety minutes. A good non-executive turns that into a meeting where three decisions get made — usually by insisting on a proper pack circulated in advance, a written agenda, and minutes that record what was actually decided.
What are their legal duties?
The same as any other director. Appointment brings the full set of statutory duties under the Companies Act 2006, and being non-executive does not reduce them.
The one that matters most is section 172: a duty to act in the way the director considers most likely to promote the success of the company for the benefit of members as a whole, having regard to the long term, the interests of employees, relationships with suppliers and customers, the impact on community and environment, the company's reputation, and the need to act fairly between members. The others include exercising independent judgement, exercising reasonable care, skill and diligence, avoiding conflicts of interest, not accepting benefits from third parties, and declaring interests in proposed transactions.
Two practical consequences. A non-executive who does not read the board pack is in breach of the duty of reasonable care, not merely underprepared. And "I was only the non-exec" is not a defence — it is the sentence that appears in disqualification proceedings.
What does a non-executive director not do?
The list is as useful as the job description. They do not manage: no direct reports, no operational decisions, no sitting between the chief executive and their team. They do not sell for you — they can open a door, but walking through it is your job. They do not raise your round: they can introduce investors and pressure-test the deck, but a non-executive running your fundraise is doing an executive job on non-executive terms and it will end badly for both of you.
They are not a part-time chief executive. If what you need is someone to run a function, you need a fractional executive, not a board member: different role, different terms, different equity. And they do not represent an investor. That is an investor director, and the distinction matters at exactly the moments it is tested.
How much time does it take?
At seed stage, one to two days a month is a realistic baseline: a board meeting, the preparation for it, and a handful of calls between. That rises with formality — committee membership adds days, and chairing a committee adds more.
A crisis — a funding gap, a departure, a regulatory issue — can consume a week without warning, and it is when the director earns the whole year's fee. Get the commitment in writing at appointment, expressed as days per year with a note of what counts. "As required" is how a twelve-day role becomes thirty days, and it is the commonest source of resentment on both sides.
What should the first ninety days look like?
A good non-executive arrives with a plan. If yours does not, suggest one. In weeks one and two they read the last four board packs, the management accounts, the cap table, the shareholders' agreement and the last round's documents, and meet the founders separately. In weeks three and four they meet the senior team one to one, without the chief executive present, which is where a non-executive learns what the board pack does not say.
In week five they meet the lead investor to understand the thesis, the fund lifecycle and their view of the company. Week six is the first board meeting attended, mostly listening. From weeks seven to twelve they form and share a view, in writing, on the three things that most need to change.
That written view at ninety days is the deliverable that separates a useful appointment from a decorative one.
How do you tell a good one from a decorative one?
Four tests, before appointment. Do they ask for the management accounts? A candidate who accepts a seat without seeing the numbers is not going to challenge them afterwards. Will two previous boards take a reference call? That answer tells you more than any CV. Can they name what they would change in the first ninety days? Someone who has done the role has a view within one conversation.
And would they invest? Not whether they will, but whether the answer is instant. A candidate who would not put their own money into your company has told you something, and it is worth hearing before you appoint them rather than after.
Where to go next
If you are working out whether you need one yet, when to appoint your first independent director sets out the six signals. Before you appoint anyone, read what to check on directors' and officers' insurance — the strongest candidates will ask, and no cover will cost you them.
This guide is general information about governance practice and directors' duties, not legal advice.
Common questions
What are the legal duties of a non-executive director?
The same as any other director. Appointment brings the full set of general duties under the Companies Act 2006: to act within powers, to promote the success of the company under section 172, to exercise independent judgement, to exercise reasonable care, skill and diligence, to avoid conflicts of interest, not to accept benefits from third parties, and to declare interests in proposed transactions. Being non-executive does not reduce any of them.
How much time does a non-executive director spend?
At seed stage, one to two days a month is a realistic baseline: a board meeting, the preparation for it, and a handful of calls between. Committee membership adds days and chairing one adds more. Get the commitment in writing at appointment, expressed as days per year with a note of what counts.
What is the difference between a non-executive director and an investor director?
An investor director sits on the board to represent a fund's interest as a shareholder. A non-executive director represents nobody: their duty under section 172 is to the company and its members as a whole. The distinction matters at exactly the moments it is tested — a down round, an offer that treats share classes differently, a decision about the chief executive.
Should a non-executive director manage staff?
No. No direct reports, no operational decisions, and no sitting between the chief executive and their team. A non-executive who starts running a function is doing an executive job on non-executive terms, and it ends badly for both sides. If you need someone to run something, you need a fractional executive rather than a board member.
Sources
- Companies Act 2006, sections 171 to 177 — general duties of directors
- Companies Act 2006, section 172 — duty to promote the success of the company
- UK Corporate Governance Code, Financial Reporting Council — board role and effectiveness
- Board Appointments, UK non-executive director remuneration (2026) — time commitment and fees by company type
- InvestingDirectors placement experience (InvestingDirectors network data)
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