Non-Executive Directors (NED's)
Responsibilities
Scrutinize the performance of management in meeting agreed goals and objectives
Monitor the reporting of performance
Make sure of the integrity of financial information
make sure financial controls and risk management systems are robust and defensible
Determine appropriate levels of remuneration for executive directors
Prime role in appointing and removing executive directors
Prime role in succession planning
The board should include a balance of NEDs and executive directors
Half of the NED's must be independent exclusive of the chair
1 NED should be the Senior Independent Director who is directly available to deal with concerns that cannot of should not be dealt with by the chair, CEO or finance director.
Roles
Strategy
Contribute to the development of strategy
NED's have the right and responsibility to contribute to strategic success, challenging strategy and offering advice
Scrutinising
Review the performance of management in meeting objectives
NEDs are required to hold executive colleagues accountable for decisions made and results obtained. They should meet without the chair at least annually to evaluate their performance
Risk
Make sure financial systems are accurate and risk management robust
NEDs make sure the company has adequate internal controls and risk management in place
People
Decide remuneration of board and ensure appropriate succession planning
NEDs oversee a range of responsibilities in appointment and remuneration of board and will be involved in contractual and disciplinary issues.
Effectiveness
Build recognition by executives of contribution in order to promote openness and trust
Be well informed on company and its external environment
Have strong command of issues relevant to the business
Insist on a comprehensive, formal and tailored induction
Continually develop and refresh skills and knowledge to ensure contribution remains informed and relevant
Ensure information is available well in advance to enable though consideration of issues
Insist that information in sufficient, accurate, clear and timely
Uphold the highest ethical standards of integrity and probity
Question intelligently, debate constructively, challenge rigorously and decide dispassionately
Promote the highest standards of corporate governance and seek compliance with Combined Code wherever possible
Independence
Provide a detached and objective view of board decsions
Provide expertise and communicate effectively
Provide shareholders with an independent voice on the board
Provide confidence in corporate governance
Reduce accusations of self-interest behavior of the executives
Threats to independence
Material business relationship within last 3 years
Employee in last 5 years
Cross directorship in other companies
receive remuneration other than directors fee
Close family ties with director
Significant shareholder
Served on board for more than 9 years