The most startling result of the Cadbury committee's report on the financial aspects of corporate governance has been the transformation in the status of the non-executive director.Previously little more than a spear-carrier in the drama of corporate governance, the non-executive has now moved centre-stage and is hogging the spotlight to the evident embarrassment of some other members of the cast.The office of non-executive director is not one recognised under the Companies Act.

There is much confusion surrounding the nature of the contribution to be expected from those who are not engaged full-time in the management of the business.In the absence of legislation, we will have to look to the courts to define what the non-executive director's functions are on a case-by-case basis - a process that is currently proceeding at a slow pace.Most non-executive directors spend a maximum of 15 or 20 days a year, often less, in the service of the company.

They therefore have less detailed knowledge of the business than many employees and full-time directors.In practice, they have less access to detailed information concerning the business than full-time board members and must inevitably rely upon summary informatio n filtered upwards.The growing trend to see the non-executive director as a general panacea to all questions of corporate governance is impracticable and doomed to disappointment.The non-executive director cannot be a corporate police officer, shadowing the every move of executive management.

By the same token, he or she should not be considered an amateur auditor.Equally, the non-executive is not a cheap alternative to first class independent professional advice.

It is the responsibility of the management to ensure that companies are properly advised, by professionals, who take responsibility for the advice they give.Most importantly, the presence of a non-executive director does not mean that the other directors can delegate their own responsibilities for proper corporate governance and compliance to the non-executive.There is a very useful role left for an outside presence on the board.

The non-executive should be a complement to the skills and experience represented by the executive board.

His or her role should be to seek to add value to the board's collective decisions by bringing a different range of knowledge, experience and insights, and introducing best practice and procedure from elsewhere.He or she should seek to be a check and balance on the interactions within the executive board, operating by force of personality and experience rather than from a detailed knowledge of what is going on at middle management level.The non-executive is thus a source of objectivity and should be responsible for balancing the different interests of stakeholders in any company, eg shareholders, creditors, employees, customers and sometimes the public at large.

That part of a board's function which is devoted to strategy, policy, resources and performance is the non-executive's legitimate concern.These are necessarily flexible and general role definitions.

Varying managing structures throughout industry mean that the emphasis of what is required from the non-executive will vary from business to business.

This is as it should be.

Executive teams are structured differently, contain varying talents and the complementary skills that are required from outsiders will themselves vary.There is a measure of justifiable public cynicism at the corporate merry-go-round of a small pool of executive directors serving as non-executives on each others' boards.In my opinion, the Cadbury report was much too restrictive in suggesting that executive directors were the most appropriate candidates for non-executive positions.Skills such as objectivity, experience of alternative points of reference, and an ability to check that the control systems are in place and working are possessed by many others than company directors.

Academia, the Civil Service, international institutions and, of course, the professions, should increasingly provide the recruiting ground for the kind of outside help executive boards need.The direction of the major wealth-creating engines of society is a process that should involve at least more than those employed in that sector.If it is impossible for a part-time director to be as well informed as a full-time executive director, is it really fair to make him or her legally responsible in the same way as a full-time executive?The courts are beginning to address this issue by carefully assessing what standards of care are expected of non-executives in particular cases and distinguishing that from a higher duty sometimes expected from their more knowledgeable executive counterparts.

But this process can only proceed at the speed at which cases come before the courts.Unless and until this issue is concluded, it will become increasingly difficult to recruit non-executive directors to serve on the boards of those companies which often need their assistance most.

The proliferation of directors' and officers' insurance policies is evidence of the unease on this issue felt by many non-executives.It may prove to be difficult to resolve this problem within the unitary board system.

The outside director's role has gone well beyond the Companies Act and is, de facto, evolving into a two-tier board system.It is also important to look at alternative systems.

One option would be the creation of an advisory board, which would be effectively 'an upper chamber'.

The advisory board would carry with it the ultimate sanction of public resignation in the event that it lost confidence in the ability of the executive board to function properly.

The advisory board would not have formal powers of appointment and removal of the executive chairmen and team - that would involve a change in the law - but de facto it might have powers akin to these.Such a system would by no means suit all companies in the UK - but it might suit some.

And it might suit some better than having two roles performed within a unitary board - and it might suit some smaller companies better than having to adopt the whole panoply of Cadbury's version of best practice in the UK.