Non-Executive Director

What is a 'Non-Executive Director'

A non-executive director is a member of a company's board of directors who is not part of the executive team. A non-executive director (NED) typically does not engage in the day-to-day management of the organization, but is involved in policy making and planning exercises. In addition, non-executive directors' responsibilities include the monitoring of the executive directors, and to act in the interest of any stakeholders. Also called external director, independent director and outside director.

BREAKING DOWN 'Non-Executive Director'

Non-executive directors are often included in a firm's lineup for public relations reasons; for instance, the non-executive director's community status and experience could provide good exposure for the firm. Even though they are non-working directors, they can share liability with the executive directors of the firm.

RELATED TERMS
  1. Outside Director

    Any member of a company's board of directors who is not an employee ...
  2. Dummy Director

    A person on a company's board of directors who votes and acts ...
  3. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  4. Executive Director

    The senior operating officer or manager of an organization or ...
  5. Inside Director

    A board member who is an employee, officer or stakeholder in ...
  6. Independent Outside Director

    A member of a company's board of directors who was brought in ...
Related Articles
  1. Professionals

    The Marketing Director's Pitch

    Are your shoulder's wide enough to carry a company's reputation?
  2. Professionals

    Sales Director Career Provides Daily Challenge

    Find out what you need to do to close the deal on this investment management position.
  3. Fundamental Analysis

    The Basics Of Corporate Structure

    CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
  4. Financial Advisors

    Fund Boards: What They Do and Why You Should Care

    Fund boards oversee management and operations of the fund on behalf of shareholders. Make sure you've got a board that will look out for you.
  5. Professionals

    The Hierarchy of an Investment Bank

    Learn about the hierarchy of an investment bank, from the entry-level analyst to the power-wielding managing director, including respective pay for these jobs.
  6. Executive Compensation

    Retired Execs: How Much Do Corporate Boards Pay?

    If you have the right skill set, getting a seat on a company board can be a lucrative and stimulating way to spend some of your new free time.
  7. Options & Futures

    Governance Pays

    Learn about how the way a company keeps its management in check can affect the bottom line.
  8. Investing News

    Large Chipotle Shareholders Get More Control (CMG)

    Chipotle shareholders voted on Wednesday to allow large, long-term shareholders more control over the board of directors. All board members were re-elected.
  9. Professionals

    The Path to Become a Managing Director in an Investment Bank

    Find out what it takes to become managing director at a major investment bank, starting from business school and surviving all of the titles in between.
  10. Investing

    Corporate Governance

    Corporate governance refers to the formally established guidelines that determine how a company is run. The company’s board of directors approves and periodically reviews the guidelines, which ...
RELATED FAQS
  1. How do a corporation's shareholders influence its Board of Directors?

    Find out how shareholders can influence the activity of the members of the board of directors and even change official corporate ... Read Answer >>
  2. Why doesn't Warren Buffett name a successor for Berkshire Hathaway?

    Learn about how Warren Buffett plans to have Berkshire Hathaway managed after his passing. Find out more about his decision ... Read Answer >>
  3. There is no obligation to pay out dividends even for those firms that have traditionally ...

    Could you please explain this? "Some companies pay out dividends, but many others do not. And there is no obligation ... Read Answer >>
  4. How do the C-suite members work together to make a successful company?

    Learn more about the C-suite titles and how the executive team successfully runs a large or small organization. Find out ... Read Answer >>
  5. What is a staggered board?

    A staggered board of directors (also known as a classified board) is a board that is made up of different classes of directors. ... Read Answer >>
  6. When a corporation wishes to open a margin account with a broker-dealer ...

    The correct answer is b. Whenever a corporation opens an account with a broker-dealer, a resolution by the board of directors, ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center