The Blog

Investing in Trust: The Role of NEDs in Engaging Gen Z Investors

By Sarah Penney

Reflecting on the Non-Executive Director Awards

Last week, the TEA team had the pleasure of attending the Non-Executive Director Awards in London. Our founder, Sheryl Cuisa, served as a judge and had the honour of presenting the Not-for-Profit award – a fantastic opportunity to highlight our mission of engaging Gen Z in investing.

Here’s a look at the winners (you can read more about them in The Times):

• FTSE 100 – Paul Walker, RELX
• FTSE All Share – Colin Day, Premier Foods Group
• FTSE AIM – Malcolm Wall, Eagle Eye Solutions Group
• Private/Private Equity Backed – Alison Thain OBE, Sage Homes
• Not–for–Profit/Public Service Organisation – Stephen Hill OBE, Alzheimer’s Society
• Dame Helen Alexander ‘NED to Watch’ – Salma Shah, Mitie Group
• Lifetime Achievement – Sir Nigel Rudd‍

In the current professional climate, the importance of non-executive directors (NEDs) has never been more pronounced.

The NED Awards are a testament to the belief that good governance is foundational to corporate success and that NEDs are pivotal in ensuring this, especially in difficult times. 

The awards spotlight the indispensable contributions of NEDs to their companies and, by extension, to investors who rely on robust governance for confidence in their investments. The awards underscore the complexity and diversity of the NED role, celebrating exceptional contributions across various sectors and circumstances.

The critical context in which NEDs operate today was succinctly captured by Ruth Cairnie, chairwoman of the judges, who noted the myriad challenges facing UK businesses. From economic sluggishness to higher interest rates and talent access issues, the role of NEDs in devising strategies that navigate these hurdles while fostering growth and resilience is unparalleled. 

The NED Awards, by recognising the exceptional contributions of individuals like Alison Thain and Colin Day, highlight the undeniable impact of strong, diverse boards in guiding companies through uncertain times, reinforcing the idea that robust governance begins with insightful, dedicated non-executives.

NEDs and the Gen Z Challenge

Increasingly, Gen Z is a vital, yet complex, group of investors that companies need to engage with. This generation is having to shift away from traditional aspirations like home ownership and focus more on growing savings through investments. With this shift, there’s a significant pool of capital waiting to be deployed.

But it’s not that simple. This new wave of investors has different expectations. While seeking growth, they also prioritise supporting businesses aligned with their values, particularly in areas like sustainability, corporate governance, and community engagement.

Enter top-tier NEDs. With the right NEDs on board, these strategic advisors can play a crucial role in helping companies connect with this evolving investor demographic and future-proof their investment strategies.

One example at the NED awards was Salma Shah from Mitie was named this year’s NED to watch. Shah’s unique background, spanning journalism, government advising, and now corporate governance, illustrates the evolving nature of the NED role in embracing diverse perspectives and expertise. Her leadership in Mitie’s ESG initiatives showcases how modern NEDs are pivotal in aligning companies with today’s ethical and sustainability standards.

Picking the right NED for the job

Reflecting on our experience at the NED Awards, we’ve distilled the key qualities that public companies should seek in their modern-day NEDs:

• Industry Expertise: NEDs with deep industry knowledge can better grasp investor concerns and tailor communication strategies accordingly.
• Financial Proficiency: NEDs with a strong financial background can contribute to investor engagement efforts by providing in-depth analysis of financial performance, interpreting key metrics, and articulating the company’s financial position in a clear and accessible manner.
• Effective Communication: NEDs should possess excellent communication skills to bridge the gap between boardroom discussions and investor expectations, fostering transparency and trust.
• Investor Relations Experience: Previous experience in investor relations equips NEDs with the know-how to engage with investors and address their needs proactively.
• Ethical Integrity: Integrity and ethical conduct are non-negotiables for NEDs, advisors who are vocal about their values and how they’re steering the business in this direction reinforce trust and credibility with investors.
• Long-Term Focus: NEDs should prioritise long-term shareholder value over short-term gains, advocating for sustainable business practices and strategic initiatives that will deliver value to investors.
• Diversity and Inclusion: This is a biggie. Modern-day boards need to reflect our society, this is something Gen Z investors actively looking for. Diversity on boards promotes a broader range of perspectives, enhancing decision-making and fostering positive investor engagement.
• Tech Proficiency: In an increasingly digital landscape, tech-savvy NEDs are necessary, they need to be able to leverage digital platforms to enhance investor engagement and proactive communication.

We all know how valuable talented NEDs are to a business’s performance, but we need to make sure we’re forever evolving this thinking and pushing NEDs to continue challenging companies to rise to the changing values of retail investors. 

By appointing NEDs with the attributes outlined in this blog, public companies can strengthen their investor relations and cultivate lasting relationships with younger investors, ultimately driving long-term value creation for all involved.

To find out more about implementing inclusive investor engagement, download our whitepaper: https://teaxall.org/white-paper/ 

Join TEA! Let's shape the financial inclusion agenda together by facilitating inclusive investor engagement. Sign up now for FREE!

Sign up to our newsletter to stay up to date