A non-executive director (abbreviated to non-exec, NED or NXD), independent director or external director is a member of the board of directors of a company or organisation, but not a member of the executive management team. They are not employees of the company or affiliated with it in any other way and are differentiated from executive directors, who are members of the board who also serve, or previously served, as executive managers of the company (most often as corporate officers). However they do have the same legal duties, responsibilities and potential liabilities as their executive counterparts.
Non-executive directors provide independent oversight and serve on committees concerned with sensitive issues such as the pay of the executive directors and other senior managers; they are usually paid a fee for their services but are not regarded as employees.
All directors should be capable of seeing company and business issues in a broad perspective. Nonetheless, non-executive directors are usually chosen because of their independence and initiative, are of an appropriate caliber and have particular personal qualities.