Question 1

What does a non-executive director actually do, and what is a board for?

Accepted Answer

A board is the body that **directs the company** — as distinct from managing it — and a non-executive director is a member who is not an employee, brought in for independent judgement, experience and oversight.

**What a board is actually for:**

**Setting strategy and approving major decisions.**

**Holding management accountable** for delivering against it.

**Overseeing risk, controls and compliance.**

**Appointing, assessing and if necessary removing the chief executive** — arguably its single most important function.

**Ensuring the company's obligations are met**, since directors carry personal legal duties.

**The distinction that matters:** the board **directs**; management **runs**. A board that starts operating the business has lost the ability to hold anyone to account for operating it, which is the most common dysfunction in small company boards.

**What a non-executive brings:**

**Independence.** No job to protect, no internal politics, and the ability to ask the question everyone is avoiding.

**Experience of things you have not done yet** — a first acquisition, a first fundraise, a downturn.

**Challenge to the chief executive**, which nobody employed by the chief executive can do freely.

**Networks and credibility** with investors, lenders and customers.

**Oversight of what executives cannot assess objectively** — their own performance and pay.

**What non-executives are not:** consultants, part-time executives, or a source of free labour. Using them to do work is a common and value-destroying mistake.

**The legal point that surprises people.** In UK law there is **no distinction between executive and non-executive directors' duties**. A non-executive owes the same statutory duties, carries the same potential liabilities, and cannot defend themselves by saying they were only part-time. This is why proper information, minutes and insurance matter.

**When a small company should get one:** at the point where the founder has no one to be genuinely challenged by, before a fundraise or sale, when entering unfamiliar territory, or when investors require it.

**What makes it work:** a clear remit and time commitment, real information in advance, and a chair who runs proper meetings.

General information, not legal advice.

Question 2

What are a company director's actual legal duties?

Accepted Answer

In the UK, seven duties are set out in statute — the Companies Act 2006 — and they apply to every director of every company, including a sole director of a small one who may never have read them. The

Question 3

What is an employee ownership trust?

Accepted Answer

A structure in which a trust holds a controlling stake in a company on behalf of all its employees, collectively and indefinitely — rather than employees individually holding shares. It has become a

Question 4

What is the difference between a bookkeeper, an accountant and an auditor?

Accepted Answer

Three distinct roles that differ in what they produce, what qualifications they need, and — crucially — who they are working for. The third distinction is the one that surprises people. A bookkeeper

Question 5

What does limited liability actually protect you from?

Accepted Answer

Less than most people assume. A limited company is a separate legal person, so its debts are its own — but there are substantial and routine exceptions, and the ones that matter most are usually

Question 6

How do you close a business properly?

Accepted Answer

Through a formal process appropriate to the structure and to whether the business is solvent — and the distinction between solvent and insolvent closure determines everything, including whether

Question 7

What is the difference between taking salary and dividends as a company director?

Accepted Answer

They are legally different transactions, taxed differently, subject to different conditions — and the common advice to "take a small salary and the rest as dividends" is a simplification that depends

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