Nigel Dykhoff, head of The Remuneration Practice and one-time headhunter at Spencer Stuart, finds that in consequence, good non-executive directors are becoming scarcer: "People are realising the risks are high, the liabilities are great and the rewards are minimal." A non-executive contract may specify one day's service a month, but if things get sticky, who pays for the extra time and the lawyers' services, both of which are certain to be needed?

It would be only human not to probe too deeply into the company's problems, whatever the London Stock Exchange's Combined Code may say about corporate governance and the monitoring duty of independent non-executive directors. In fact, the non-executive director's role is under review for the Department of Trade and Industry.

Although major change is unlikely, there is concern at evidence that non-executive directors are ineffective at achieving management change in response to poor performance compared with their American counterparts. Research by 3i, the venture capital firm, among some 1,400 non-executive directors on its books points in the same direction"one-third of the sample found board meetings to be only partially effective (the proportion has doubled since 1996).

Where there was a need to change an under-performing executive director, two-thirds said they could not push the change through, or doubted whether they could. There are usually several reasons why companies fail but there is generally one above all, according to Mark Palios. Now leader of business regeneration for PwC, the professional services firm, in the UK, Mr Palios is a qualified insolvency practitioner who has seen most forms of corporate abuse. He finds that a too-dominant chief executive is usually at the root of it.

Timid non-executive directors, or those who have too many other commitments to do their homework, merely inflate the chief executive's ego further, contributing to the problem they are appointed to solve. Even a tough non-executive director will find it difficult to tackle a dominant chief executive head-on, warns Mr Palios.

What an effective non-executive director might be able to do is to slow the deterioration in the company's position. That will allow him or her time to collect support among other non-executive directors (hence the Combined Code's suggestion that there should be a chief non- executive director).

The non-executive director can also approach institutional shareholders, perhaps to find a strong independent chairman or, failing all, to find a buyer. What the non-executive director must avoid at all costs, advises Mr Palios, is the temptation to resign. The gesture will count for little, and if the company does subsequently go down, he or she can still be made to contribute to the deficiency and might even be disqualified as a director if there was evidence of negligence.

In the experience of Robbie Taylor, non-executive chairman of the Taylor Group, non-executive directors are more effective if they are relatively new to the company. His firm spans iron foundry and metal work for the electronics industries in Scotland. He has worked with many non-executive directors, and served as a non-executive director elsewhere. "If they stay longer than three or six years, they begin to go native," he says. "They get too close to the executive team." The more closely identified they become with strategies and performance standards, the more difficult it will be to blow the whistle.

Non-executive directors have to strike a careful balance between being too nosy and not nosy enough, and to have faith in the management team.