Board Structure
As part of the board evaluation process, the structure, composition and processes of the board should be reviewed to ensure they remain appropriate for the size and structure of the organisation and the tasks required to be completed by the board
It is for each board to determine the most appropriate composition and consultation of its board
Among the factors to be considered are competencies, experience, diversity, independence and any applicable obligations such as the GC for listed companies
The GC while not prescribing the composition of the board does make a number of recommendations for listed companies
Board to compromise both executive and NEDs
At least half the boards in the FTSE 350 should be indpendent NEDs excluding the chair. Companies outside the FTSE350 should have at least two NEDs
A majority of board committee members should be independent NEDs
As with the composition of the board, it is for each board to decide the frequency of its regular shceulde meeting. The cycle of issuing board packs sufficiently ahead of the meeting to allow time for the directors to read the reports, holding the meeting, drafting minutes nd then call for papers for inclusion in the next board pack means that holding regular meetings more frequently than monthly is not practical. Meeting less often than quarterly is unlikely to provide sufficient oversight of the company's operations
Many private companies with only one or two directors often do not hold regular board meetings managing the business on a day to day basis as required. Often the only formal meeting is the annual meeting to approve the financial statements formally
For subsidiaries it can often be the case that the companies trading activities are undertaken by managers with the directors not involved in the day to day decision making process
Where meetings are held on a regular basis, the board should establish board processes often by the chair in conjunction with the company secretary. This should include
Establishing a schedule of future dates for board meetings
Standing agenda items
The structure and format of board papers
The process for calling for board papers
Circulation of the board pack
The process for non-standard items to be added to the agenda for the next meeting or any meeting scheduled for the future
A robust process for tracking and progressing outstanding actions from previous meetings
Drafting and commenting on draft minutes