Three NEDs you should never appoint

Founders building toward exit usually upgrade the board in the 12 months before transaction. The clean-up is rational but a year too late. The right time to think about board composition is when the company crosses £5m revenue — well before the exit conversation. Three specific NED archetypes to avoid at that stage:

The retired CEO of the unrelated giant

Former CEO of a household-name FTSE 100 retailer. Brand recognition off the chart. Looks brilliant on the cap table. Almost never useful operationally because their reference frame is a £5bn business with 12,000 employees — not your £8m business with 60 employees. The advice they give optimises for risks your stage doesn't face.

Worse: they take board fees that signal seriousness to investors but consume time the founder needs for actual operating advice. Their networks are at director-of-X level — too senior for your hiring needs, too distant from your customer base.

The serial NED with eight seats

Their LinkedIn shows them as Non-Executive Director at eight different scale-ups. They attend your board meetings, contribute four sensible observations, and leave. They have not read your last management accounts in detail because they have not had time. They will not be paying attention when something matters because they will not have the cognitive capacity to be paying attention to all eight companies at once.

The right NED is on two boards maximum. Three is borderline. Eight is theatre.

The ex-Big Four partner who has never operated

Long career in audit or transaction advisory. Excellent technical fluency on accounting, M&A mechanics, due diligence. Has never run a business. When the company faces an operational crisis — losing a key customer, replacing the CFO, navigating a hire failure — the advice is structurally framed around process and risk-mitigation rather than operating decisions. Risk-mitigation is necessary but insufficient.

This NED is the right hire in the 12 months immediately before a transaction. They are the wrong hire in the 24 months of company-building before that.

The board you want at exit is not the board you want at scale. Most founders inherit the first and apply it to the second.

What we recommend instead

For most operating companies between £5m and £30m revenue, the right NED is:

• Currently or recently operating a comparable-stage company in an adjacent sector
• On no more than two other boards
• Available for at least one full hour per month between board meetings
• Compensated correctly — £20–40k per year is the right band, not £70k
• Reference-checked with two founders they've previously sat with

If the board composition question is on the agenda, that's exactly the kind of advisory we run. Send a brief.