New research from Saunderson House, the wealth management firm, shows that being financially secure is a key consideration for existing and aspiring Non-Executive Directors (NEDs). The firm’s new report ‘Non-Executive Directors – A Financial Outlook’ finds that nine in ten respondents (89%) believe that financial security is a key factor to becoming a successful NED.
However, there is a notable difference in the attitudes of established and potential NEDS. Just under half of established and recent NEDs (48%) and over half of transitioning NEDs (54%) say that they think financial security is very important. In contrast, only a third (34%) of potential NEDs place the same premium on being financially secure.
Ian McNally, Director at Saunderson House, comments: “Financial security is clearly an important factor to consider when deciding whether or not to become a NED. However, our research suggests that many aspiring NEDs haven’t considered their financial matters seriously enough and it isn’t until they start transitioning into a NED role that they realise that a reduced future income will mean that financial planning is necessary.
Saunderson House’s research shows that nearly two thirds (62%) of respondents either expect, or have experienced, a decrease in income as a result of becoming a NED. And, in a related finding, there is a significant degree of worry about income in retirement – 41% of transitioning NEDs are somewhat concerned about the level of income they will have in retirement.
Ian McNally adds: “The transition from full-time employee to NED is a well-trodden path. It can be a period where financial concerns come to fore. However, it also offers an ideal moment to take stock financially, and model future expenditures against best and worst-case scenarios to give comfort that NED plans are financially underwritten.”
Other findings from the research include:
Ian McNally adds: “Becoming a NED is a popular move for experienced individuals. Non-executive roles are often both challenging and rewarding with critical oversight and scrutiny responsibilities. Careful planning can ensure that financial security needn’t be a major concern.”
Saunderson House conducted an online survey with 116 existing and potential future Non-Executive Directors in Spring 2018.
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