What I look for in a non-executive director

Joanne Hosker is part of BGF’s Talent Network Team. She is primarily based in our Manchester office with a national role. She has introduced BGF portfolio businesses to dozens of experienced non-executive board directors and chairs. 

1. Been there, done it

It sounds obvious, but a founder or CEO needs to have a trusted non-executive who has previously been in their shoes and felt the same responsibility of having the success of a business on their shoulders. It can be a very lonely role being the leader of a scaling business. Someone who has been in the same position, built a high-performing team around them and made crucial, timely decisions is indispensable. I look for experienced non-executives who have seen the good and the bad – things that went well and (just as importantly) things that didn’t. This gives them the best ability to make a positive and valuable contribution. 

2. Pace and dynamism

BGF backs ambitious, fast-paced businesses. A non-executive needs to match that pace, dynamism and enthusiasm. A key part of fast growth is creating structures and processes that enable and support sustainable and successful expansion. Still, there is also a need to be opportunistic and entrepreneurial and to demonstrate fast, effective decision-making. 

3. Emotional intelligence and low ego

A non-executive role is as much about holistic support and mentoring as it is about strategy and go-to-market propositions. It’s a support role for an entrepreneur or entrepreneurial team who may be scaling an exciting business for the first time, while developing their leadership skills. Emotional intelligence and the ability to develop a close, successful and trusting relationship with an entrepreneur (and an investor director) is vital. Low ego is relevant in developing a successful relationship. We want those who have been there and done it, and who can apply that wisdom to help the management team with the current challenge, motivated by the success of the team and the value being created in this business. 

4. Shaping a business for exit

I look for non-executives with experience in investor-backed businesses. They usually maintain an eye on the likely exit route, which could be a trade sale, public listing or some other kind of buyout. Shaping a business for an exit is a long-term responsibility with continued considerations identifying what will transfer to value and what won’t – and how to maximise that value. Where possible, we are keen for our non-executives to invest alongside us and be aligned with all shareholders. Many of our non-executives have been through this process multiple times. They can use their experiences to guide management, evaluate potential options and support the entrepreneur(s) in what can be a time of complex emotions. 

 

5. Complementary fit

Although a lot of us feel that our sector, particularly our business, is unique, many of the challenges facing a scaling business are universal. Specialist sector knowledge is not a prerequisite. The entrepreneur and management team almost certainly have specialist knowledge already and are often working in businesses disrupting the status quo in their sector. It is better to place a complementary skillset on the board, which aids cognitive diversity and brings together a wider variety of experiences and perspectives. 

6. Specific business model experience  

Many of our non-executives have worked in both larger, more corporate environments and in smaller, earlier-stage, developing businesses. This gives them the dual view of knowing what a good, established company looks like as well as what it feels like to be in a developing, fast-paced scale-up. An understanding of the business model and aspirations is essential, of course. As part of the collaborative non-executive selection process, we spend plenty of time with management assessing their strengths to understand where expertise is required and should be added. For example, if the investment case is for international expansion, a non-executive with a track record of overseas growth would be valuable. In another example, the play may be ‘buy and build’, so a non-executive with merger and acquisition expertise would be sought. 

 

Which non-executive directors have you introduced to portfolio businesses who are a great example of what you look for?

One example out of many would be Fiona Lowry (pictured above), who joined A Wilderness Way as chair at the time of BGF’s investment. Fiona is a serial entrepreneur we know well. She was the founder and CEO of Good Care Group, a BGF-backed business that exited to Sodexo in 2019. Before that, she led the buyout of Merlin Communications from the BBC as CEO, exiting four years later to Vosper Thornycroft. She was also the co-founder of Oracle Care. Her understanding and experience of founding, scaling and exiting businesses is perfect for supporting the ambitious growth plans of A Wilderness Way.

Another example is Martin Harriman, whose background is in larger companies. He was on the main board at O2 and, at Telefonica, led consumer Internet of Things (IoT) and digital home. Since then, he has focused on scaling businesses, most notably supporting WaveOptics as chair through its transformation from six employees to an exit to Snap Inc for $500 million in 2021. He is a recent addition to BGF’s Talent Network and has joined portfolio company Jola Cloud Solutions, an award-winning mobile data specialist, as a non-executive.  

A third example is David Algar, the former CEO of fishing tackle business Fox International. He helped to double that business in size with acquisitions and product development and successfully exited it to a trade buyer. He has also served as CEO of private equity-based garden equipment company Hozelock. Following our introduction, David serves as non-executive chair at portfolio business Evolution Aqua, based in Wigan, which makes and supplies filtration products to the aquatics industry. He is helping the management team deliver their exciting growth plans, launch new products and expand internationally. 

Parts of this article appeared in ‘What to look for in a non-executive director’, published by Management Today on 6 October 2022. This article was edited in part by Khadijat Ajonbadi, an intern in the BGF marketing team.