Would you be a NED?

As part of their role as members of a unitary board, non-executive directors should constructively challenge and help develop proposals on strategy. Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. They should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible. They are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing executive directors, and in succession planning. (UK Corporate Governance Code)

Action points:

  • Ask what you bring. Do your skillsets and experience contribute to a balanced board? What do the existing board members offer?
  • Do your due diligence. Is the board compliant with its legal and governance obligations over a period of time? Will it listen, be challenged and improve?
  • Request the recent management accounts. A good company will let you have these subject to signing a confidentiality agreement;
  • Is the culture right for you and are your values right for the company?
  • Look at the terms of the directors’ and officers’ insurance

It’s nice to be asked to be a NED, it is far more important that your decision to accept is based on sound analysis and judgement.

For more information email info@haddletonlegal.com

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