NESTA Mentoring Programme

8/8/2019 NESTA Mentoring Programme

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April 2010

NESTA MENTORINGPROGRAMME

The next steps


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Introduction 4

1. Amicable conclusion of mentoring 6

relationship

2. Continue informal mentoring 11

3. Consultanc role 16

4. Non-executive directorship 21

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The NESTA Creative Business Mentor Network was set up

as a year-long mentoring programme, connecting creative

businesses with senior executives to help those businesses

achieve their growth aspirations.

This quick reerence guide has been created or both

mentors and mentees, outlining the key things to

consider beore and during the nal mentoring session

and illustrating the opportunities available or urther

collaboration. The inormation in this booklet is also or

individuals who would like to move rom an inormal

mentoring relationship to a more ormal one.

At the end o a ormal mentoring relationship, such as the

NESTA Creative Business Mentor Network, mentor and

mentee may be wondering what happens next, how they

should bring their particular relationship to an end or how

they should move to a new more ormal arrangement.

In any programme it is important to provide closure and

ocially end the relationship as it is. Mentors and mentees

should both acknowledge that the programme is coming

NESTAMENTORINGPROGRAMMEThe next steps

to an end. Any subsequent decision to continue the collaboration

should be agreed together and must take into consideration other

commitments on both sides that might have an impact on that

arrangement.

Depending on how well the collaboration has gone and the

sentiments o the relevant mentor and mentees, there are our likely

options or progressing:

1. Amicable conclusion o mentoring relationship.2. Continue with inormal mentoring.

3. Adopt a consultancy role.

4. Take on an ocial non-executive director.

Each o the ollowing sections illustrates the rationale behind

adopting any o the our routes. They show how the mentor could

work within the business, and the potential benets and risks or

both mentor and mentee. The purpose is to assist an inormed

decision or both parties on how best to proceed in the uture.

There will o course be variables depending on how strong the

personal relationship developed between the pair has been, so the

ollowing is intended as a guide only.

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Having engaged in the mentoring relationship or the past

year, both parties may eel that or whatever reasons, there

is no need to continue a business relationship beyond the

remit o the programme. The reason or deciding to part

amicably and not continue need not necessarily be negative.

It may be the case that mentor and/or mentee do not have

time to meet regularly with each other and both eel that

they have gained the maximum value rom the relationship

already.

In this case, there is little to do in terms o ormal or legal

actions. In line with the arranged mentoring programmes

wrap-up, it would be highly recommended that both mentor

and mentee arrange a nal meeting to bring the relationshipormally to a close.

HOw yO MIGHT O THIS

In the nal meeting it would be benecial or both parties

to look at the progress the company has made since the

mentor joined the team and to highlight key areas that

the company may wish to move orward on. Ater the nal

1. AMICABLECONCLSIONOF MENTORINGRELATIONSHIP

session both mentor and mentee can part amicably and choose to

stay in touch as oten or as little as desired outside the constraints

o a business relationship.

At the nal meeting

It is important to provide closure and ocially end the relationship

as it is. Mentor and mentee should both acknowledge that the

programme is coming to an end, and i you decide to continue the

relationship, that is up to you.Please ensure that you have set a date and allow enough time or

your fnal mentoring meeting.

Following is a recommended ormat and questions based upon a

NESTA mentoring session lasting two hours.

In the rst hour mentees should make the most o the nal

mentoring conversation and ocus on an important business issue

they are acing.

The second hour is to refect on the past 12 months and review the

next steps. Here are some suggested questions both mentees and

mentors might want to ocus on.

Mentors and mentees ask ourself over the past 12months:

1. What did you nd really useul?

2. What surprised you?

3. What would you do dierently?

4. What aspects o the mentoring worked really well?

5. What impact has the mentoring had on you/your business?


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wHy yO wOL CHOOSE THIS OPTION

You may not have the time to devote to continuing the

relationship eectively.

The advice/recommendations you made over the past year

have been ollowed and implemented, thereby making your job

complete.

You do not eel that you are adding signicant enough value to

warrant an extended relationship.Mentee has not chosen to implement advice given.

HOw yO MIGHT O THIS

An amicable parting o ways, urther to the close-out meeting.

RISS

Possible loss o contact with creative company and individuals.

BENEFITS

More time to dedicate to other projects.

Mentees: the next steps for our business:

1. What would help you achieve more going orward?

2. What action are you going to take to keep yoursel on track

towards your goals?

3. I you see the mentoring relationship continuing, what does

it look like, how will it be structured?* Be honest and realistic

about the time needed to continue the relationship. You may

not have time going orward. Consider whether you want therelationship to become more ormal and what that means or

you both.

4. How will you make the most o the connections you made

through the mentoring programme?

* This booklet will help to answer question three, however it might be moreappropriate or mentor and mentee to set up another meeting to discussthis depending upon what options are being considered.


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It is hoped that both parties have ormed strong working

relationships rom the mentoring experience over the past

year. The notion o inormal mentoring suggests that the

mentoring relationship will continue beyond the duration

o the Creative Business Mentor Network programme,

potentially in a less ormal way.

Please note that the ollowing overview considers

that despite being inormal, certain parameters and

expectations o both parties should be agreed upon beore

continuing the relationship.

2. CONTINEINFORMALMENTORING


You may no longer need external advice at this time, instead

wishing to ocus on the advice already given and having

possibly already implemented it.

You may not have valued the advice rom your mentor.

You may not currently have the t ime to spend with a mentor.

HOw yO MIGHT O THIS

During a nal mentoring session.

RISS

There is the risk that in the mentors absence the business may not

have an impartial sounding board or new projects or an ongoing on

the business perspective.

BENEFITS

N/A


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Opportunity to continue adding value to a high-growth

business.

Less pressure than taking on a non-executive directorship.

With increasing regulatory and governance pressures

associated with directorial responsibilities, a structured

inormal relationship may be more attractive or both parties.

Ability to agree own parameters in terms o time andexpectations.

HOw yO MIGHT O THIS

Despite being an inormal relationship, it is important or both the

mentor and mentee to agree upon the level o engagement that the

relationship will involve.

Whilst there will not be any contractual recourse i the rules o the

relationship are broken, it is important that both parties have shared

expectations to ensure no disconnects in the uture.

As a part o this agreement, it may be advisable to consider the

ollowing when establishing an inormal relationship:

Time commitments: Will you meet on an ad hoc basis, once

a month, quarterly etc? Pre-determining this is important to

managing expectations or both mentor and mentee.

Role o mentor: Determine i the role will involve advice only or

implementation and delivery as well.

Financial issues: An inormal relationship may or may not

include remuneration o some kind. It would be advisable to

discuss these terms beore engaging.

Forming an agreement and understanding the terms o engagement

will provide protection or both parties. This may include signing

non-disclosure agreements.

RISS

Any risks should be mitigated by developing a well thought-out

agreement between both parties.

Issue with giving specic advice despite the inormal natureo the relationship, it is worth reiterating the importance o

setting specic parameters in the contract between what can

be deemed guidance against delivering specic advice. It

is expected that the relationship is very much biased on the

guidance side as opposed to relying on the mentor to make

recommendations or to advise on a specic capacity. A solid

contract will ensure that neither party can be legally sanctioned

should actions be taken as a result o guidance rom the

inormal mentoring.

There should be no issues in signing a non-disclosure

agreement on either side, as this is one orm o protection that

either party may wish to stipulate rom the outset.

BENEFITS

Continued engagement with mentee.

Ability to set parameters in terms o time and duties required.

Less responsibility than a non-executive directorship.


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Retain high-level, strategic advice rom an industry expert.

Avoidance o ocial, regulated involvement rom mentor.

You may not wish to involve your mentor ocially in the

business but see value in maintaining an inormal relationship.

HOw yO MIGHT O THIS

Despite being an inormal relationship, it is important or both the

mentor and mentee to agree upon the level o engagement that the

relationship will involve.

Whilst there will not be any contractual recourse i the rules o the

relationship are broken, it is important that both parties have shared

expectations to ensure no disconnects in the uture.

As a part o this agreement, it may be advisable to consider the

ollowing when establishing an inormal relationship:

Time commitments: Will you meet on an ad hoc basis, once

a month, quarterly etc? Pre-determining this is important to

manage expectations or both mentor and mentee.

Role o mentor: Determine i the role will involve advice only orimplementation and delivery also.

Financial issues: An inormal relationship may or may not

include remuneration o some kind. It would be advisable to

discuss these terms beore engaging.

Forming an agreement and understanding the terms o engagement

will provide protection or both parties.

RISS

Ensuring that the parameters o the relationship are agreed

rom the outset, there is minimal risk to the company and the

individual mentee.

There should be no issues in signing a non-disclosure

agreement on either side as this is one orm o protection that

either party may wish to stipulate rom the outset.

BENEFITS

Continued contact with industry expert (with probable deep-

seated knowledge o your business).

External, impartial advice on the business, environment and

competitive landscape.

No direct responsibility as not employed as a non-executive

director. Flexibility in terms o time however, predetermining

the amount o time likely to be required will manage both

parties expectations.


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Ongoing engagement with the mentee on a more ormal

basis.

Desire to remain engaged and assist growth with nancial

reward.

HOw yO MIGHT O THIS

Contractually agree the remit o services that will be oered.

Boundaries need to be set and agreed within the contract at

the outset to ensure clarity between both parties.

Remuneration agree remuneration model that is

satisactory to both parties (e.g. hourly rate, day rate, pro-

rata).

Time commitment how oten will the mentor consult with

the mentee (once a week, monthly etc. or what period o

time)?

RISS

Provided specic guidelines and contractual agreements are

in place there is minimal risk to the mentor.

BENEFITS

Acting on a consultancy basis allows the mentor to earn a ee

rom the company they have been working with and remain

involved with the business on a more ormal basis.

Choosing to hire the associated mentor as a consultant

allows the mentee company access to the mentors skill base

and network in a more ormal manner without having to

install the mentor as a permanent part o the business, or

example, as a non-executive director.

3. CONSLTANCyROLE


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to work with the mentor/consultant to agree this brie.

2.Agreeafee

Once the brie has been outlined, it is necessary to discuss

a ee that the consultant will be paid. Talk in depth about

rates and build these into stage 3, the contract. Consultants

are not employees o the organisation and are responsible

or their own tax and National Insurance payments. Check

whether VAT is included.

3.WriteacontractPut together a contract with the consent o your other

directors and preerably with the help o a solicitor. The only

relationship between the consultant and the organisation is

the contract and no other employment rights exist. As such,

it is crucial to get this right rom the start.

Consultants obligations: Make it clear in writing i there are

any requirements on the consultant, such as abiding by your

organisations equal opportunities policy or not disclosing certain

inormation to third parties.

Companys obligation: The organisations only duty is under health

and saety legislation, to ensure sae working conditions or all

workers and visitors to the premises.NB: It is important that both parties are aware o when a consultant

switches to become a ull-time sta member and as such, becomes

eligible to pay National Insurance. One o the key dierences

between being a consultant and an employee is that employees

normally have less control over what they do and how they

do it, but they do benet rom certain legal protections which

independent contractors do not. For example, only employees can

bring a claim o unair dismissal against their employer.


Specialist expertise well connected, impartial, industry

experienced consultants can deliver solid value.

I you lack sta to resource specic projects.

In the case o one-o projects, it may not be practical to

employ a new member o sta, but a consultant could step

in to ll the knowledge and resource gap.

Continued impartial sounding board or business.Flexibility (nancial/time) the contract between both parties

can be designed to be fexible to enable consultancy to be used

as and when required.

Flexibility (regulatory) hiring a mentor as a consultant avoids

installing them as a member o the board and thus avoids the

regulatory burdens that become pertinent to both parties.

Familiarity having built a one-year relationship, hiring the

mentor as a consultant would probably save time and expense

as opposed to explaining to a new consultant the intricacies o

your business.

HOw yO MIGHT O THIS

Agree remit o services, rates and time horizons contractually

beore engagement begins.

There are a series o steps to hiring a consultant that can be

outlined as ollows:

1.Writeabrieffortheworkrequired

The more specic the brie, the more eectively the

consultant will be able to deliver the work. You may choose


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This is the most ormal route available to involve a mentor

more permanently in the mentee business. This section

looks at how to go about moving the existing relationship

into a ormal non-executive directorship (NED).

PRPOSE AN ROLE OF AN NE

Non-executive directors are the custodians o the

governance process and whilst they do not get involved in

the day-to-day running o a business, they are accountable

or providing oversight and monitoring o the executive

activity and contribute to the development o strategy. It

is likely that both mentor and mentee have already beenworking on strategic direction and as such, a mentor may be

well placed to adopt such a role should it suit the company

and the individual mentor.

In line with the Higgs Report, non-executive directors have

responsibilities in the ollowing areas:

Strategy: Non-executive directors should constructively

challenge and contribute to the development o strategy.

4. NON-EXECTIVEIRECTORSHIP

Other actors which illustrate a workers employment status include:

Working set hours, or a given number o hours a week/

month.

Being paid by the hour/week/month.

Working at the employers premises or at places determined

by the employer.

Not being allowed to work or others (especially

competitors).It is important to mark the lines in the contract where both parties

see the role o a consultant in terms o time commitments, conficts

o interest, pay and benets. Ironing out these issues at the start

will save any conusion urther down the line.

RISS

Provided specic guidelines and contractual agreements are in place

there is minimal risk to the mentee organisation.

BENEFITS

Similar to those available in the Why you might choose this

option including:

Specialist expertise, covers lack o sta to resource projects,

continued impartiality and fexibility o employment, tangible

measurements o success.


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Formalise the existing relationship.

Having worked with the business or a year, the mentor

may enjoy being involved at a more ormal level with the

mentees company.

Remunerate the existing relationship.

By way o salary or options, the mentor would hope to

receive payment or their ongoing services to the businessand to represent the added risk they would be accepting.

Formalised entrepreneurial mentoring.

In a new business, a non-executive director might act as an

entrepreneurial mentor, providing inspirational leadership

and an experienced voice to ensure maximum potential is

reached.

HOw yO MIGHT O THIS

A mentor looking at the option o becoming a non-executive

director should consider the ollowing:

Do I have something to contribute to the mentees board?

Am I capable o passing judgment on the companys

management/strategic plan/risks/alternatives/competition?

Do I have sucient time and am I suciently committed?

Am I aware o the risks in terms o regulations? (See risks

section below.)

Performance: Non-executive directors should scrutinise the

perormance o management in meeting agreed goals and

objectives.

Risk: Non-executive directors should satisy themselves that

nancial inormation is accurate and that nancial controls and

systems o risk management are robust and deensible.

People: Non-executive directors are responsible or determining

appropriate levels o remuneration or executive directors andhave a prime role in appointing, and where necessary removing,

senior management, and in succession planning.

A non-executive director sits on the board o a company alongside

the executive directors. They act as an independent voice on every

important decision. He or she will not work ull-time and is unlikely

to be concerned with day-to-day issues.

Having spent the past year working with the mentees business, it

is likely that the mentor should have a good understanding o the

business, which is an obvious requirement or such a role. In time,

the mentor will need to learn more about what each department

does and become more amiliar with monthly sales gures and

accounts. This will allow them to make inormed decisions in the

interests o the company.


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The role o a non-executive director may include looking at issues

such as:

Personal interest.

Duty to shareholders.

Disqualied directors.

Disposal o property.

Governance and management.

To accept a role as a non-executive director, certain questions need

to be claried with the mentee company including:

Whatwillbetheexactrelationshiptotheboard?

Will the non-executive director be titled as such, e.g. could

they assume the position o a Chairman under the auspices o

a non-executive directorship? Laying down and understanding

the title and t within the organisation is key.

Howoftenwilltheboardmeet?

Typically, meetings occur 6-10 times per year. Non-executive

directors will typically be required to attend all annual general

meetings and any extraordinary general meetings unless agreed

otherwise.

AgreementofremunerationResearch carried out by The Institute o Directors ound that

an average salary or a non-executive director is 17,320 , but

this can vary according to the size o the company to between

15,000 and 26,061. Options in the business are another

suitable remuneration orm.

RISS

Personalriskduetoregulatorychange

Expectations o non-executive directors are changing rapidly,

and their role is under more scrutiny than beore. The Companies

Act o 1973 lists a number o transgressions that could lead to

criminal prosecutions that all squarely on the non-executive

directors shoulders. The role can expose them to risks o claims o

negligence quite disproportionate to the rewards in many cases.

As has previously been the case, directors can be liable to

disqualication, the reasons or this include:

Allowing the company to trade while insolvent.

Not keeping proper accounting records.

Failing to prepare and le accounts.

Not sending returns to Companies House.

Failing to send tax returns and pay tax.

In some cases, directors could also ace criminal charges, nes or

being made personally liable or the companys debts.

Disqualication proceedings are handled by the courts or the

Insolvency Service. I they nd against the director, disqualicationcan last between two and 15 years.

While disqualied, directors must not:

Be a director o any company.

Act as a director even without being ormally appointed.

Infuence the running o a company through the directors.

Be involved in the ormation o a new company.

Act in a way that promotes a company.


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Goodcorporategovernance

The role o a non-executive director is primarily to protect

shareholders interests, help set strategy, and monitor executive

perormance in achieving that strategy.

Expertiseandimpartiality

In small companies, non-executive directors oten need to

contribute industry expertise, good contacts and a sense obeen there, done that. It is also likely that non-executive

directors o smaller high-growth rms may be required to be

more involved with the business on the days they are in the

oce.

Externalinnovation

A good non-executive director should bring innovation and

experience to the board whilst monitoring executive decisions.

The challenge or them is to remain independent o the

business and its day-to-day operations, while maintaining a

level o knowledge that will allow them to ask tough, objective

questions when necessary.

HOw yO MIGHT O THIS

Being the most ormal route to choose, there are a number o steps

to ollow to install a non-executive director in your business.

1. Ensurethementeecompanyhasaboardinplace

This is a requirement to ocially install a non-executive

director. I you are just setting up a board in order to install

the non-executive director then it could just be ormed o the

Ignoring a disqualication order is a criminal oence. Fines may be

payable and prison sentences o up to two years have also been

recorded.

BENEFITS

Financialcompensation

A non-executive director will typically be paid or their role

on the board. As such, the role has a nancial benet but

importantly enables the individual to be a part o a growing

company and to use their knowledge to good use.

Personalsatisfaction

Each non-executive director will have their own reasons or

deciding to become involved with a company, some nancial,

some more subjective.


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management team initially. The executive team will report to

the board on issues such as budgets and governance and the

non-executive director will need to gain approval rom the

board members beore joining.

a. Settingupaboard

I your company does not currently have a board, the

ollowing outlines the key members it should include and

the way this should be structured within your business.Start-up companies oten have one director, the minimum

required by law or a private limited company. The

director may also be the main shareholder and the person

who runs the business.

As your business grows, you may nd that a single

director may not have enough time to cover every

responsibility and importantly, may become removed rom

the real strengths they can bring to the business (e.g.

sales or innovation). In this situation, the business may

decide to appoint a board o directors, with each director

taking responsibility or a certain part o the business,

e.g. human resources, nance, sales and marketing, or IT.

I you appoint a board o directors, you should ensurethey all within a clearly dened reporting structure. For

example, the sales and marketing teams could report

to a sales and marketing director who is responsible or

strategy in that area.

Typically, a board structure may consist o the ollowing:

A chairman oten non-executive who oversees the

whole business.

A managing director employed by the company or

who is the owner/ounder o the company who runs

the business on a day-to-day basis. The managing

director reports to the chairman and oversees the board

o executive directors.

A team o executive directors (management team)

they will sit on the board, draw salaries and manage

key areas o the business, such as nance, sales and

operations. They may also be incentivised with optionsor a shareholding in the business.

Non-executive directors as outlined above, the

purpose is to advise on the strategic direction o

the business and decide remuneration o executive

directors.

Having a clear structure allows shareholders to

understand the roles o and reasons or appointing

executive and non-executive directors. It is a good idea

to have a senior, independent non-executive director as a

point o contact or shareholder grievances.

Having a well-structured team is also benecial or sta

who oten eel happier knowing who is responsible or

which business areas and who they can go to i problemsarise. In smaller companies, sta may well work alongside

directors but as the company grows they may have less

day-to-day contact.

2. Presentacasetotheboardtohireanewnon-executive

director

Typically, once the desire has been expressed to nd and

hire a non-executive director, the board may require a orm


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o selection or interviewing to occur to ensure the right

candidate is hired. As such, a tight specication on exactly

what is required rom a non-executive director needs to be

produced to manage expectations on both sides o the table.

Dening the requirements o the non-executive director and

holding an interview to make sure that all members o the

board are happy is good practice even i there is no pressure or

impetus rom the board itsel.

Running background checks on any incoming non-executive

director is standard practice and ensures that there are no

conficts o interest (please see Risks section).

3. Agreetermsofengagement

Once the board has reached agreement on a suitable

candidate, it would be advisable to hire a solicitor to drat a

contract between the mentee and non-executive director that

will cover some o the ollowing:

Details and requirements o the role.

Number o days available per year.

Number o meetings/type o meeting required to attend.

Remuneration package/salary and/or options.

4. Registernon-executivedirectorwithCompaniesHouse

Once the non-executive director has been selected, Companies

House must be notied to make the position ocial.

When contracts have been negotiated, reviewed and signed the

non-executive director can start.

Alternativeoption

An alternative option to installing the mentor as a non-

executive director rom the start may be to test the water

by rst installing the mentor within a consultancy role that in

time may progress to a ull non-executive directorship post.

A non-executive director is allowed to deliver consultancy-

based work but would typically be excluded rom discussions

on the consultancy contract. It is not uncommon or an agreed

initial package to include both a mixture o non-executivedirectorship and paid consultancy.

RISS

Relevantexperience

Ensure that the potential non-executive director has the

relevant experience to suit the business ambitions. The NESTA

programme will have paired mentors with relevant companies

but it is important to ensure both mentor and mentee share a

vision.

Financialcost

Non-executive directors will need to be remunerated on an

annual salary basis or with options.Indemnity insurance will also be required to protect the non-

executive director against possible claims rom shareholders.

The mentee company needs to ensure they are able to aord

the non-executive directors salary requirements.

Proximitytothebusiness

In accepting a directorship, the mentor would be accepting

a share o responsibility or decision-making guidance. Both

parties must be absolutely sure that the new non-executive


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TheCombinedCode (2003), Higgs Smith and Turnbull

Guidance and the Sarbanes-Oxley Act.

TheLawandPracticeofCorporateGovernanceby Mark

Womersley o Osborne Clark is reputedly the go to guide

or detailed inormation on NED positions.

FRTHERNON-EXECTIVEIRECTORINFORMATION


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NESTA

1 Plough Place

London EC4A 1DE

[email protected]

www.nesta.org.uk

Documents

NESTA Mentoring Programme