LORD Young, president of the Institute of Directors, recently called for non-executive posts to be abolished. He felt that non-execs, as part-timers, are not able to properly fulfil their duties.

Whether you agree with this or not, in light of recent corporate collapses a review of the role of non-executives seems necessary, and it will need to distinguish between the needs of a plc and a start-up. Career non-execs, fully dedicated to a handful of companies, may be able to address some of the issues highlighted in the case of plc’s, but if there is one kind of non-exec that should be abolished, it’s the career non-exec to start-ups.

Non-execs are appointed to a company to police the executive directors on behalf of shareholders and ensure that they don’t overpay themselves. There is no need for this in start-up companies: the founding team are usually the only shareholders and they usually pay themselves a pittance to conserve cash.

Non-execs are extremely useful for networking within an industry and making the firm look good to investors - whatever the size of the company.

This can create conflicts for a plc since finding an industry expert usually means someone employed by a competitor, a customer or a supplier and consequently not necessarily someone you would wish to be familiar with your detailed finances and operations. Conversely, for a start-up, such a person can be a great addition to the board: he or she can seduce potential funders, become your first customer, first strategic partner or eventually your acquirer.