Non-executive director

A non-executive director (NED or outside director is a member of the board of Directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way. They are differentiated from inside directors, who are members of the board who also serve or previously served as executive managers of the company (most often as corporate officers ).

Non-executive directors have responsibilities in the following areas, according to the Higgs Report, commissioned by the British Government and published in 2003.

· Strategy: Non-executive directors should constructively challenge and contribute to the development of strategy.

· Performance: Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitoring, and where necessary removing, senior management and in succession planning.

· Risk: Non-executive directors should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible.

· People: Non-executive directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning.

NEDs should also provide independent views on:

· Resources

· Appointments

· Standards of conduct

Non-executive directors are the custodians of the governance process. They are not involved in the day-to-day running of business but monitor the executive activity and contribute to the development of strategy.

Executive director

Role

The role of the Executive Director is to design, develop and implement strategic plans for their organization in a cost-effective and time-efficient manner. The Executive Director is also responsible for the day-to-day operation of the organization, including managing committees and staff and developing business plans in collaboration with the board for the future of the organization. In essence, the board grants the executive director the authority to run the organization. The Executive Director is accountable to the Chairman of the Board and reports to the board on a regular basis - quarterly, semiannually, or annually. The Board may offer suggestions and ideas about how to improve the organization, but the Executive Director decides whether or not, and how, to implement these ideas.

The Executive Director is a lesdership role for an organization and often fulfills a motivational role in addition to office-based work. Executive Directors motivate and mentor members, volunteers, and staff, and may chair meetings. The Executive Director leads the organization and develops its organisational culture.

As the title suggests, the Executive Director needs to be informed of everything that goes on in the organization. This includes staff, membership, budget, company assets, and all other company resources, to help make the best use of them and raise the organization's profitability and profile.