The External Examiner is an academic outside the university, who is responsible for checking the standard of the marking of your essays by tutors. Some of your tutors in turn may act as External Examiners for English departments in other universities.
The External Examiner will take particular interest in the quality of the feedback tutors write on your essays, so he or she may be regarded as part of the audience for your tutor's comments. This is why it makes sense to take account of the perspective of your External Examiner in your design for a reader. Unlike your module tutor, your External Examiner won't be familiar with the details of the way the module has been run, so you can't include unpublished sources such as module handouts in your referencing. The External Examiner may only have read the books your module covers ten years ago, or perhaps not have read them at all if they are not very well known, so will need some reminding of their content, though you have to avoid the kind of plot summary that is typical of writer-orientated prose.