Non-Executive Director: Role, Responsibilities, Salary

Staff Writer

November 24, 2023

What’s in the article?

Companies in Singapore are often comprised of different levels of directors and members that play varying roles in the operation and management of the business, an example of which is a non-executive director. 

What is a Non-Executive Director?

A non-executive director is a member of the company’s board of directors and provides an unbiased perspective on the company’s decision-making processes. The non-executive director is not involved in the daily operations and routine but offers independent insights to ensure that the company accomplishes its goals and mission in a responsible and ethically sound manner.

These individuals are trained to understand that the company’s interests are much more valuable and important than those of the executive directors, management, and shareholders and essentially have a bird’s eye view over all business activities. While not technically a full-time employee, this director is one of the highest-ranking executives in the company and contributes greatly to the overall success of the business.

What are the Responsibilities of a Non-Executive Director?

The roles and responsibilities of a non-executive director include, but are not limited to, the following:

  • Reviewing Company Performance: A non-executive director is in charge of critically analyzing the company’s performance based on certain key performance indicators and industry standards. With an objective mindset, the non-executive director helps the company identify its strengths, as well as areas for improvement, which are then relayed to the company through constructive feedback and comments.
  • Shaping the Company’s Strategic Direction: A non-executive director collaborates with the company’s board members to decide the company’s long-term goals, as well as the strategic path that will help the business achieve these. This is done with a thorough understanding of the company’s competencies and market position in relation to the industry environment.
  • Managing and minimizing risk: While every company is liable for some risk, the non-executive director is in charge of identifying these and mitigating them effectively. This can be done by looking at the company’s potential operational, compliance, and financial risks and developing strategies to limit these as much as possible to protect the company’s assets, image, and future.
  • Managing and evaluating employees: A non-executive director is in charge of the appointment and dismissal of senior management employees, as well as the evaluation of their performance with the company. The director should aim to promote the right employees to leadership positions and create an overall balanced team that can help the company move forward. The director is also in charge of promoting a healthy and positive workplace culture.
  • Maintaining external relations: A non-executive director helps the company keep solid relations with its shareholders, customers, suppliers, and regulatory bodies by acting as a mediator, ensuring the representation of the company’s interests.

How Much is a Non-Executive Director's Salary?

While they are not full-time employees, non-executive directors are compensated for their services through fees, cash, or company stock. Non-executive directors can earn a base pay of around SGD 200,000 to SGD 300,000 a year, but this amount will also heavily depend on the industry standard, the size, and the financial performance of the company, as well as the amount of time the non-executive director has spent working.

What’s the Difference Between Non-Executive Directors and Executive Directors?

The main difference between non-executive directors and executive directors is that the non-executive directors are not as involved in the company’s daily operations and management. 

Executive directors are involved in the day-to-day of the company and work closely with the company board members, while non-executive directors are not seen as full-time employees and are only meant to provide independent advice by having an overview of the company.

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