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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
3
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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.
5
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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
wHy yO wOL CHOOSE THIS OPTION
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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wHy yO wOL CHOOSE THIS OPTION
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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wHy yO wOL CHOOSE THIS OPTION
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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wHy yO wOL CHOOSE THIS OPTION
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.
wHy yO wOL CHOOSE THIS OPTION
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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wHy yO wOL CHOOSE THIS OPTION
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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wHy yO wOL CHOOSE THIS OPTION
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
www.nesta.org.uk