Pricing NED Services: How to Avoid the £20k Mistake That's Costing You

What's the most uncomfortable question in any NED conversation? "So... what do you charge?"

For many executives transitioning into SME board roles, this moment triggers anxiety, uncertainty, and—in most cases - significant underselling of their services.

The Hidden Cost of Underpricing Your NED Services

I can't tell you how many conversations I've had with experienced executives who give away their expertise because they don't understand their value in the NED market.

One former operations director had been accepting £8,000 annually for board roles that should have commanded £25,000+. Another finance executive admitted he'd been so uncomfortable discussing NED fees that he'd defaulted to "whatever the budget allows"—only to discover later that similar roles were paying double what he'd accepted.

This pricing confusion is concerning, especially since SMEs have budgets for the right expertise and are prepared to invest in qualified Non-Executive Directors.

Let's explore four key ideas to help you price your NED services with confidence and avoid leaving money on the table.

Idea 1: Your Corporate Salary is Irrelevant to NED Pricing

It's a common misconception that NED fees should somehow relate to your previous executive salary or daily consulting rates. This thinking leads to two equally damaging conclusions:

Pricing too low, thinking "I'm only working one day per month, so £2,000 seems reasonable."

Pricing too high, calculating "My day rate was £1,500, so £18,000 annually seems right"—without understanding that NED value isn't measured in time.

SMEs don't pay for your time. They pay for access to your expertise, judgment, and the confidence that comes from having an experienced voice in the room.

A manufacturing SME owner recently told me: "I don't care if my NED spends two hours or two days on our monthly board pack. What I value is that when we face a critical decision, I have someone with 20 years of operational experience helping us think it through."

Instead of thinking in time, focus on the outcomes you enable and risks you help avoid. Price the value, not the hours, when determining your NED compensation.

Idea 2: Most Executives Dramatically Undervalue Their Expertise

The "modest pricing" approach backfires more often than executives realize. When you price significantly below market rates, you do more than simply leave money on the table—you signal that your contribution isn't valuable.

I recently worked with a technology executive who had been accepting £12,000 for NED roles. When we repositioned his expertise and raised his NED fees to £30,000, not only did he secure better opportunities, but business owners took his advice more seriously.

He shared: "It was counterintuitive, but when I started charging what I was actually worth, clients began implementing my recommendations more consistently. They had skin in the game."

SME owners understand the relationship between price and quality. They're often more suspicious of unusually low fees than impressed by them.

A software company founder told me: "When someone quotes significantly below what I expect to pay, my first thought isn't 'great value'—it's 'what am I missing?'"

Rather than competing on price, compete on the value you bring to businesses facing challenges you've already solved. Value yourself appropriately in the SME NED market, so others will too.

Idea 3: The Compensation Model Matters More Than the Absolute Amount

The traditional annual retainer isn't the only way to structure NED compensation, and it's often not the most attractive option for either party. Smart executives are exploring hybrid models that align their success with the business's performance.

Consider these NED compensation models:

Base retainer + equity: A lower annual fee (£15,000-£20,000) combined with equity participation rewarding long-term value creation

Performance bonuses: Fixed retainer with bonus payments tied to milestones or metrics you're helping them achieve

Project-based fees: Retainer for regular board duties plus separate fees for initiatives where your expertise is crucial

One former marketing director structured a deal with a retail SME that included an £18,000 base retainer plus 0.5% equity and a £5,000 bonus if they achieved their digital transformation targets within 18 months.

"It aligned my interests with theirs perfectly," she explained. "They got my full commitment to their success, and I benefited from the value we created together."

These hybrid approaches often result in higher total Non-Executive Director compensation while feeling less risky for the business owner. Think partnership, not just payment.

Idea 4: Regional Markets Have Hidden Pricing Benchmarks

One of the biggest mistakes executives make is assuming NED pricing is uniform across all markets and business sizes. In reality, compensation varies significantly based on geography, sector, business size, and growth stage.

£25,000 might be standard for a £5M manufacturing business in the Midlands, while a £15M technology business in London might budget £40,000+ for similar expertise.

Fast-growth businesses typically pay a premium for relevant experience, while established family businesses might prefer longer-term arrangements at more conservative rates.

A private equity partner shared: "We budget £30,000-£50,000 annually for sector specialists in our portfolio companies. That's not negotiable—it's the cost of having the right expertise in the room."

Instead of guessing at appropriate fees, research your market segment and understand what your targets pay for expertise like yours. Know your market, not just your worth, when setting your NED rates.

Structuring Your NED Value Proposition

Pricing your NED services isn't about finding the "right" number—it's about understanding the value you create and structuring compensation to reflect that value while aligning with your target market's expectations.

As someone who has both paid for NED expertise and guided executives through this transition, I can confirm that the most successful appointments happen when both parties feel the arrangement is fair and motivating.

The executive who understands their value and can articulate it clearly always outperforms the one who competes purely on price. Your expertise has real monetary value to SMEs.

Building Confidence in NED Pricing Conversations

The question isn't whether you're worth premium NED fees—it's whether you can communicate and structure your value proposition in a way that makes those fees feel like an obvious investment.

What's been your experience with NED pricing conversations? Have you found effective ways to discuss fees, or is this an area where you'd like more confidence?

Understanding how to price your services appropriately is crucial for building a successful NED portfolio that reflects your true value in the marketplace.