what is a non executive director 
the term non executive director refers to a member of a company s board of directors this board member isn t a company employee which means they don t engage in the day to day management of the organization rather most non executive directors act as independent advisors and are involved in policymaking and planning exercises their responsibilities generally include monitoring executive directors and acting in the interest of corporate stakeholders understanding non executive directorsas noted above non executive directors are not company employees they are part of a company s board of directors they are put in place to challenge the direction and performance of a company as well as its existing team since non executive directors do not hold c level or managerial positions they are thought to understand the interests of the company with greater objectivity than the executive directors who may have an agency problem or conflict of interest between management and shareholders or other stakeholders 1also known as external directors independent directors and outside directors non executive directors are often installed on a firm s board for public relations reasons for instance a particular non executive director s community standing a record of philanthropy and prior experience could provide positive exposure and symbolic value for the firm although they aren t employees non executive directors may still be compensated for their time they can be paid through fees cash or equity compensation the amount they are paid depends on the industry the size and scope of the company and the amount of time they spend doing work for the corporation because they come with a lot of experience and connections many non executive directors can be handsomely rewarded for their time non executive directors are equally liable for the success or failure of a business as outlined by statutory requirements and tax laws 23special considerationsas a function of their leadership role non executive directors are required to embody certain key values this includes using their past experience to mentor others during new ventures they are also responsible for keeping the executive directors and the entire board accountable this can be accomplished by helping with and managing a company s they also independently assess the company s performance to ensure the firm s stakeholders are considered before the needs and want of the management or board a non executive director with the right experience may also take a deep look into the financials of the company to verify fiscal responsibility putting necessary controls in place if required all non executive directors are required to commit a significant amount of their time to the oversight of the company they are expected to disclose any other significant time commitments to the board and to inform the board of any changes to their schedules non executive directors must also provide value through leveraging their network of outside contacts that can benefit the company 1in some cases non executive directors may serve in the same role for two or more companies when this happens they must fully disclose their time commitments to both boards and juggle their responsibilities accordingly non executive director vs executive directorit s easy to confuse a non executive director with an executive director but the two are inherently different the former is not an employee 4 but an executive director acts as a leader and manages the day to day operations of the company they work for usually a non profit organization along with managing company matters some of the other responsibilities of an executive director include although the role and responsibilities of an executive director are similar to those of a chief executive officer ceo their salary is normally much lower in some cases many executive directors often work on a voluntary basis and are not compensated 5example of non executive directorhere s an example to demonstrate the roles and responsibilities of non executive directors let s say the former ceo of a successful public technology company assumes the role of a non executive director with a technology startup as part of the board they may be expected to in certain cases non executive directors are well established in their fields as such they may have good connections in their industries in the case of the former tech ceo they would likely have warm relationships with venture capital firms that can help the startup achieve its goals of expansion and growth 