Questions
Questions founders and boards ask
Direct answers to the questions that come up before an appointment is made. Every statement of law names its source, so you can check it rather than take my word for it.
Board and non-executive roles
- What is a non-executive director? A non-executive director is a member of a company's board who holds no executive management role. They are a registered director under UK law, appointed to the board and filed at Companies House, and they owe the company the same general duties as any executive director. Their job is independent judgement, scrutiny and accountability rather than running the business day to day.
- Do non-executive directors get paid? Most non-executive directors are paid a fee, set either under the company's articles of association or by the board. The fee reflects time commitment and responsibility rather than performance. Under the UK Corporate Governance Code, non-executive pay should not include share options or other performance-related elements. Some non-executives, particularly in charities and early-stage companies, serve unpaid.
- What is the difference between an executive and a non-executive director? An executive director is a director who also holds a management job in the company, usually as an employee running a function such as finance or technology. A non-executive director holds no management role and no employment contract. Both are registered directors and both owe the company the same general duties under the Companies Act 2006.
- Can a non-executive director be a shareholder? Yes. Nothing in the Companies Act 2006 prevents a non-executive director from owning shares in the company, and many do. The issue is independence, not legality: under the UK Corporate Governance Code, representing a significant shareholder is one of the circumstances likely to impair a non-executive director's independence, and the board must handle the resulting conflict.
Fractional CTO
- What is a fractional CTO? A fractional CTO is an experienced chief technology officer who works with a company part time on an ongoing basis, typically a day or two a week or a fixed number of days a month. They carry the same responsibilities as a full-time CTO for strategy, architecture, delivery, suppliers, security and hiring, at a fraction of the cost and commitment.
- What does a fractional CTO do? A fractional CTO sets technology strategy against the business plan, decides architecture, makes delivery commitments verifiable, holds suppliers and agencies to what they promised, owns security and technical risk, and hires and develops the technical team. The work is judgement and accountability rather than writing code, and it is reported to the board in terms the board can act on.
Longer guides
Question not answered here?
Describe the situation and I will tell you plainly whether it needs a board seat, a fractional arrangement, or nothing at all yet.