Are you planning a ‘hard-stop’ retirement? Or do you want to continue working, helping other businesses and organisations benefit from your skills and experience? Is there a cause you have always been passionate about but not had time to play an active role?
Taking on a non-executive director role could give you the best of both worlds; an interesting, flexible (paid) part-time job.
You don’t need to wait until retirement either. A survey by Legal and General insurers found that 18% of pre-retirement participants wanted to reduce their hours, and 15% were considering going self-employed to get more flexibility.
But what if you don’t want to continue in the job you are in, or start afresh on your own with a new business?
Retirees as non-executive directors
A non-executive directorship for a company could bridge the full-time to part-time transition, and also keep your brain active well into retirement too. A recent Sunday Times article featured a lady who had taken on no less than four part-time non-executive director roles after her full-time job came to an end.
“It work fantastically for me… It’s a different sort of work. A lot of it is reading documents which I can do in the evening or at the weekends. The flexibility is fantastic and definitely allowed me to work for longer.”
What is a non-executive director?
“NEDs (non-executive directors) are fundamentally ‘outsiders’ to a company, detached from day-to-day operations and valued for their objective insight. They can offer a unique perspective towards corporate governance, strategy, risk management and succession planning, amongst other areas.”
It’s not just companies that are overseen by a board of directors. A whole range of organisations rely on an expert and active board, including charities, schools, government bodies and health trusts. Most of them are very conscious of their boards needing to reflect the society they serve or do business with. They are constantly looking to recruit new NEDs to improve their diversity and gender balance, not to mention lowering their average age a little too!
So even if you are decades off retirement, there will a board of directors wanting to benefit from your insights.
Benefits of being a NED
When you approach retirement, you have accumulated decades of experience, skills, insights, innovation and ideas. One of the major benefits of being a NED is that all that doesn’t go to waste. You can use your wealth of business knowledge and practical experience to help others.
Most company NED positions are paid, so it is also a way to continue to earn a modest income in retirement in a flexible and meaningful way. You don’t have to be an expert in the company or organisation’s field either. Again, it’s about the diversity of the board members and their ability to bring fresh insights and talents that the organisation doesn’t have already.
You’ll also be involved in regular board meetings, maintaining your all-important element of in person discussion, debate, and decision making that many retirees miss when they give up full-time work. Many also appreciate the social side of being on a board (and the free lunches too!).
Balancing your time
Being a member of any board can consume a considerable amount of time, especially in the early stages when you’re learning about the organisation, its activities and its aims.
You need to consider how much time you actually want to spend on this new position and balance it against what else you want to do in your retirement. As explained in a past article, a work/life balance in retirement is just as important as when you’re working full time. It might be better, therefore, to start small with a non-exec director role at a small local company or organisation, to see how the role suits you.
The legal side of being a NED
There is one important issue to bear in mind if you’re considering becoming an NED, as the IoD website points out:
“There is no legal distinction between executive and non-executive directors … NEDs have the same legal duties, responsibilities and potential liabilities as their executive counterparts. Clearly, it is appreciated that NEDs cannot give the same continuous attention to the business of the company. However, it is important that they show the same commitment to its success as their executive colleagues.”
According to The Companies Act 2006, the statutory duties for executive and non-executive directors include:
- Promoting the success of the company.
- Using their independent judgement.
- Exercising due care, skill and diligence.
- Avoiding any conflicts of interest.
They should also declare any interests in any transactions or arrangements, and not accept benefits from any third parties.
If you’re considering taking on a non-exec director position, it’s important to fully understand what you are potentially getting into. Although specifically written for Stock Exchange listed companies, the FSC UK Corporate Governance Code scopes out the extent of the legal framework. Well worth a read.
Finding your first NED position
I suggest your first step should be to think about what sector you want to be involved in: a company, a charity, local government, etc. Remember that this is your time, so get involved in something you are passionate about. Identify a few organisations you might want to investigate further. Check their website for the current board structure and members – what could you add in terms of skills, experience or diversity?
“It’s important to be realistic about how you are going to get a break. People won’t know you wish to join a board unless you make it known. Tell your boss, talk to board members in your company, ask people to think of you when they are tapped for ideas. Think about getting in touch with old colleagues who may be on boards you are interested in, and – most of all – use the amazing power of digital to reach further than your own address book.”
Planning a retirement with purpose
If you’re struggling to plan your journey into a retirement with purpose, I’m here to help.