Why Top Executives Are Rejecting Unpaid Board Roles (And You Should Too)

Are you an experienced executive considering unpaid board positions as a stepping stone to paid NED roles? You might be making a critical career mistake that's costing you both time and money.

The True Value of Your Executive Experience

What's your most valuable asset as an experienced executive? If you answered "time" or "expertise," why would you consider giving it away for free?

Many highly accomplished executives believe they need to take unpaid board positions before "graduating" to paid NED opportunities. This mindset is so prevalent that professionals with impressive credentials - like CFOs of £200M businesses - are being advised to work pro bono for a year or more to "build governance credentials."

As someone who regularly helps executives secure Non-Executive Director positions with SME boards, I can tell you firsthand: this approach is fundamentally flawed, especially when targeting the SME market.

Four Crucial Insights About Unpaid Board Roles

Before you donate hundreds of valuable hours to unpaid positions, consider these four insights that might change your approach to building your NED portfolio career.

Insight 1: The "Unpaid Apprenticeship" Myth Is Holding You Back

The persistent myth that you must serve an "unpaid apprenticeship" before earning compensation may apply to FTSE boardrooms or public appointments - but it doesn't reflect the reality of working with small and medium enterprises.

Growing businesses aren't looking for directors with charity or public board experience. Instead, they seek proven commercial expertise that can directly impact their bottom line.

Your decades of operational experience and industry knowledge are immediately valuable to these companies. Many have budgets specifically allocated for this expertise and are ready to invest in the right person today.

Rather than following the traditional path, focus on packaging your expertise for the SME market and target businesses where your skills solve their immediate needs.

Insight 2: Pro Bono Positions Signal a Different Value Proposition

Taking unpaid board and advisory roles may actually damage your chances of securing paid SME positions. Why? Because it positions you as someone willing to work without compensation.

As one executive trying to break into the SME Non-Exec space shared: "The transition from a free to paid role isn't as simple as many assume. You have to completely reset expectations, which can damage the relationship with the client."

SME owners look for directors who understand business value and deliver measurable ROI. They want someone who prices their contribution appropriately.

Rather than diluting your market value, focus on articulating how your expertise translates to achieving results these businesses want. Combine this with a retainer-based pricing strategy and framework for closing conversations to open up more opportunities.

Insight 3: The "Free-to-Paid" Pathway Rarely Works for SMEs

The traditional wisdom of volunteering your way to paid positions might work in large corporate environments or public boards. But in the SME sector, paid and unpaid roles represent completely separate career paths.

One workshop participant spent 18 months on an unpaid charity board only to discover that none of those connections overlapped with the SME community they wanted to access.

Owners and investors who hire paid NEDs for SMEs rarely look to volunteer boards for their talent pool. A better approach is developing relationships directly with business owners, advisors and investors in the SME market where plentiful paid opportunities exist.

Insight 4: SMEs Are Facing Unprecedented Challenges They'll Pay to Solve

In today's economic climate, SMEs are navigating complex challenges from supply chain disruptions to talent shortages and digital transformation pressures.

They're not looking for governance generalists. They're seeking specific expertise to help them become more resilient and grow sustainably.

As the founder and CEO of a high-growth SME recently shared: "I need someone who understands what a business like mine should look like at the level I'm aiming for - then guide me on getting my business to look like that."

These businesses will invest in addressing their urgent, specific needs. Instead of building generic governance experience, identify the specific pain points in your sector where SMEs are struggling and position yourself as the solution to those exact challenges.

The Financial Reality of SME Board Positions

Here's the truth: If you want a portfolio of paid SME board positions, taking unpaid roles is the slowest and least effective path to get there.

As an investor who regularly appoints NEDs within portfolio companies, I can reveal that we budget £25,000-£50,000 annually for the right expertise. We don't look to get it for free and we're skeptical of those who undervalue their contribution.

Let me be clear - there's absolutely nothing wrong with taking on pro bono board work because you genuinely care about an organisation's mission. Contributing your expertise to causes you're passionate about is both admirable and fulfilling.

I'm simply cautioning against taking unpaid positions as a stepping stone to paid NED roles. If your heart is in it, by all means serve where your passion leads you. Just don't expect it to be the fastest route to building your paid NED portfolio.

Building Your SME Non-Executive Career Path

The fastest way to develop a portfolio of paid Non-Executive Director positions is by focusing directly on the SME market, positioning your specific expertise as a solution to their pressing challenges and valuing your contribution appropriately.

If you're ready to accelerate your journey to building a rewarding NED portfolio career with SMEs, our one-day SME Non-Exec FastTrack workshop provides a comprehensive system for finding, negotiating and working with ambitious SMEs for both income and impact.

What has your experience been with unpaid versus paid board roles? Have you been advised to take the "stepping stone" approach, or have you successfully secured paid positions without this detour?