With shifting risks, rising expectations from the regulator, and the heightened operational demands placed on payment and e-money institutions, the benefit-boost of an experienced, knowledgeable and networked independent non-executive director (INED) in the UK’s non-bank sector is sadly overlooked. Today’s INED must balance independence with pragmatism, challenge with collaboration, and oversight with empathy.
At a recent INED breakfast with some of the sector’s most experienced board members, several powerful themes emerged – lessons grounded in practicality and shaped by real world experience. Together, they form a roadmap for stronger governance, more effective boards, and a culture of constructive challenge.
1. Preparing for the unexpected: the case for war room scenarios
One of the strongest messages was the need for boards to experience crisis before one actually hits. Creating structured opportunities to simulate a war room environment allows directors, and executives, to work through high pressure, time critical, and potentially damaging scenarios in a safe setting.
These simulations expose gaps in decision making, communication flow, and accountability long before a real incident forces them into the light. For payments firms, where operational disruptions, cyber incidents or regulatory breaches can have immediate customer and reputational impacts, war room practice is not a luxury, it’s essential preparation.
2. Crafting a board agenda that balances stability and agility
The board agenda sets the rhythm for effective governance. INEDs emphasised the importance of maintaining a sufficiently stable agenda that allows for meaningful period-on-period comparisons, enabling boards to track trends, progress, and emerging patterns.
However, a static agenda alone isn’t enough. There must also be space for dynamic discussion, room for new, topical, or horizon scanning issues. This blend of consistency and agility ensures the board remains anchored in oversight while being responsive to fastmoving risks, opportunities, and operational realities.
3. Ensuring a balanced board with the right skills and experience
Board composition came through as a central theme: not just the number of directors, but the balance of skills, experience and perspectives. In a sector that spans innovation and growth, capital and liquidity management, technology and cyber security, risk management and customer outcomes, no single background is sufficient.
Boards must be intentionally structured to ensure coverage of all major areas of risk. This includes regular skills matrix reviews and honest conversations about gaps. A well-balanced board is not only more effective; it significantly reduces keyperson dependency and strengthens resilience.
4. Succession planning for both the board and executive team
Good governance looks not just at today but at tomorrow. INEDs underscored the board’s role in succession planning, not just for the executive team but also for the board itself.
For high-growth payments firms, where founders or longstanding executives may dominate leadership roles, structured succession planning protects organisational continuity, supports long-term strategy, and provides assurance to regulators, investors, and customers.
5. The INED as an approachable yet independent presence
Beyond formal responsibilities, an INED plays an important cultural role. They must be visible and approachable to the wider team while maintaining independence of thought and judgement.
Building trust across the organisation, without becoming operationally entangled, allows INEDs to be effective sounding boards and ensures they have a complete picture of the business. The key is to balance warmth with objectivity.
6. Being the “critical friend” to the CEO
The most effective INEDs establish a relationship with the CEO built on trust, transparency, and challenge. They are a “critical friend”, supportive but willing to ask the difficult questions and, when necessary, challenge decisions.
The ability to veto decisions exists for a reason, though as one INED wisely put it, if the relationship has reached the point where a veto is needed, something has already broken down. Preventing that breakdown through early, honest dialogue is a hallmark of strong governance.
7. Grounding decisions in the Articles of Association
While they are sometimes overlooked, the Articles of Association provide the formal blueprint for the board’s roles, remit, and boundaries. INEDs noted their importance in keeping discussions grounded and ensuring all parties, directors and executives alike, remain aligned on authority, process, and responsibility.
Regular reference to the Articles helps prevent mission drift and reinforces the legitimacy of board oversight.
8. Periodically re-educating the board on the role of the INED
Even experienced boards can benefit from reminders about the purpose and remit of an INED. Payments firms evolve quickly, and teams change; what was clear a year ago may be less clear now.
INEDs may need to periodically refresh both the board and executives on what independence means, how INEDs add value, and where boundaries lie.
9. Reading the subtext and being sceptical of “green” reports
Numbers tell a story, but so does what is not said. INEDs highlighted the art of reading the subtext in board papers, understanding tone, omissions, and inconsistencies.
A particular point of caution: be sceptical of uniform “green” reporting. A consistently risk free view of the business may signal weak challenge, incomplete data, or cultural suppression of issues.
10. Anchoring risk oversight in a clear risk appetite
Boards make better decisions when risk appetite is unambiguous, well defined, and consistently applied. INEDs advocated for focusing on the top three risks at any given time and asking management to produce simple, one-page summaries that articulate why these risks matter and what is being done to manage them.
Clarity drives alignment and better decisions.
11. Rethinking meeting cadence: quarterly vs. monthly boards
Finally, INEDs challenged whether monthly board meetings truly serve strategic oversight. The consensus was that monthly meetings often slip into operational detail, while quarterly meetings tend to elevate focus to long-term strategy, performance, and risk.
Where monthly meetings are necessary, boards may wish to split operational and strategic discussions to protect time for forward looking thinking.
Conclusion
The insights shared by INEDs at the breakfast were clear: effective governance in the payments sector requires preparation, thoughtful structure, balanced challenge, and cultural awareness. INEDs must apply not only technical expertise but emotional intelligence, independence, and curiosity.
In a sector defined by innovation and risk, strong INEDs do not just oversee, they strengthen, support, and safeguard the organisations they serve.
If you are an INED and would like to get involved in our informal network, get in touch with me.
If you are a payment or e-money institution that would like to consider the benefits of bringing an INED onboard, get in touch with me or any of my fscom colleagues.
This post contains a general summary of advice and is not a complete or definitive statement of the law. Specific advice should be obtained where appropriate.
