Non-Executive Director

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DEFINITION of 'Non-Executive Director'

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.

INVESTOPEDIA EXPLAINS '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.

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