Is a non-executive director personally liable?

Yes. A non-executive director is an officer of the company, listed at Companies House. Liability is personal and can outlast the appointment, and the disqualification and wrongful trading provisions do not distinguish between executive and non-executive directors.

What does a non-executive director do?

A non-executive director is an officer of the company, appointed to the board and listed at Companies House. They share in board decisions rather than advising from beside them, bring independent judgement the executive cannot supply itself, and carry the same statutory duties and personal liability as any other director.

What duties does a non-executive director owe?

Sections 171 to 177 of the Companies Act 2006 apply to a non-executive director exactly as they apply to the chief executive: promote the success of the company, exercise independent judgement, exercise reasonable care and skill, and avoid conflicts of interest.

Does a consultant need to be independent?

No. Independence is not required of a consultant, who can sit as close to the executive team as the work needs. For a non-executive director independence is the entire point, because the role exists to bring judgement that is not already inside the executive.

Is a non-executive director an employee?

No. A non-executive director is an officer of the company rather than an employee of it, appointed to the board and listed at Companies House. That is a different relationship from a contract of employment, and it is why the liability attaches to the person rather than to the job.

Are non-executive directors listed at Companies House?

Yes. A non-executive director is an officer of the company and appears on the public register as one. If a name is not there, whatever the engagement letter says, the role being performed is advisory rather than directorial.

Do non-executive directors have voting rights?

Yes. A non-executive director is part of the board decision rather than adjacent to it, and shares in the authority and the consequence equally. A consultant recommends and the board decides; a non-executive director is one of the people deciding.

Is a non-executive director the same as an independent director?

Not automatically. Independence is what the non-executive role exists to supply, but a long-serving non-executive who has become an extension of the chief executive has stopped being independent while keeping the title. The test is whether they still ask the awkward question in front of everybody.

Consultant or Non-Executive Director: What Actually Separates Them

A cool grey corridor with coats hanging on a rail, looking through a part-open wooden door into a warmer lit room where four people sit around a table in discussion, out of focus.

A consultant advises from outside the governance structure and carries no legal responsibility for what the board decides. A non-executive director sits inside that structure, holds the same statutory duties as every other director, and is personally liable for the board’s decisions. That is the difference, and everything else follows from it.

The confusion is common enough to cause real problems. Craig Fearn has sat in rooms where a company believed it had appointed a non-executive director and had in fact engaged a consultant, and in rooms where an experienced adviser worked out some way into the relationship that they had accepted directors’ liability without intending to.

The consultant

Engaged for a defined problem, on a defined scope, usually with deliverables somebody can point at. Bought expertise, in and out.

Accountability runs to whoever commissioned the work.
Liability is contractual. Negligent advice is a professional matter, not a Companies Act one.
Authority is nil. They recommend. The board decides and the board owns the consequence.
Independence is not required. A consultant can sit as close to the executive team as the work needs.

The non-executive director

An officer of the company, appointed to the board and listed at Companies House.

Duties are statutory. Sections 171 to 177 of the Companies Act 2006 apply to them exactly as they apply to the chief executive: promote the success of the company, exercise independent judgement, exercise reasonable care and skill, avoid conflicts of interest.
Liability is personal and can outlast the appointment. Disqualification and wrongful trading provisions do not distinguish between executive and non-executive directors.
Authority is shared. They are part of the decision rather than adjacent to it.
Independence is the entire point. A non-executive who has become an extension of the chief executive has stopped doing the job.

The test that settles it

Ask one question. If this decision goes badly, is this person’s name on it?

If yes, they are a director, whatever the engagement letter calls them. If no, they are a consultant, however senior they are and however many board meetings they attend. Titles and day rates do not decide this. Legal responsibility does.

Two practical consequences. Anyone accepting a non-executive role should read the directors’ and officers’ insurance schedule before signing rather than afterwards. And a board that needs deep expertise on one problem usually wants a consultant, so appointing a non-executive instead because it feels like more of a commitment is a slow way to acquire a governance obligation nobody actually wanted.

Good boards use both, for different work

A consultant is the right answer when you need depth on a defined question: a market entry, a system replacement, a remuneration benchmarking exercise. You want the expertise, not another permanent voice in every future decision.

A non-executive is the right answer when the problem is the quality of the board’s own thinking. The most valuable ones are rarely the ones with the deepest sector knowledge. They are the ones willing to ask the awkward question in front of everybody, early, while it is still cheap to answer. Whether anybody is willing to is less about who sits on the board than about what the room permits.

That doubles as a test of a board’s health. In board advisory work the question worth asking is when someone on this board last changed their mind during a discussion. Boards that can answer “recently” tend to be fine. Boards that go quiet are usually carrying something good governance should have caught already.

If you are deciding which to become

Executives moving toward portfolio careers often treat the two as interchangeable stepping stones. They are not, and they suit different temperaments.

Consulting rewards depth, pace, and the ability to leave. You solve the problem, hand it over and go. The exposure is limited and so is the influence.

Non-executive work rewards patience and nerve. Influence arrives slowly, mostly through the questions you ask rather than the answers you supply, and you carry the risk of decisions you argued against. That is not a small thing, and it is better understood before the first appointment than after it.

If you are weighing which is right for you, or your board is not certain which it needs, board advisory is the conversation.