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29 Cards in this Set
- Front
- Back
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Directors responsibilities - Code
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FLAVOUR
Financial & mngt perf LT success / Leadership Aims - strategically Values Obligations to s/hs Risk mngt |
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Directors responsbilities - ISCA IBE
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CHIDE
Control through checks High-perf culture Informed decisions Direction of management Ethical standards set |
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Directors responsibilties damaged by - ICSA IBE
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RON
Relunctance to involve NEDs Overly dominant people No awareness of risks |
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Directors' responsibilities - King III
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LEGERS (all linked)
Leadership Ethical conduct Governance Ensure compliance Risk management Sustainability Corporate citizenship key |
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Directors' responsbilities - ICGN Principles
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ORDER
Objectives (corp objs, strategy) RM & IC Disclosures & financial reporting Effectivness (succession, transparency) Remuneration |
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Directors' duties - common law
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Fiduciary duty - position of trust (bona fide ben co as whole)
Skill + care - neg standard is that expected of d of his skill or generally expected of a d - equiv to IA86 s214 wrongful trading 'reasonable diligent person' (Re D'Jan of London) |
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Directors statutory duties
s171-177 |
1. act within power in acc w constitution
2. promote success of co, in good faith, for ben of members as a whole (but enlightened) 3. ex. ind judgement 4. ex r skill, care, diligence 5. avoid conflicts of interest 6. no benefits from 3rd parties unless authorised 7. declare interest in proposed trans w co (DTR related party trans - approve + announce if related person 30%+ shares) |
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Liability of directors - 'wrongful acts'
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actual or alleged breach of trust, misstatement, misrepresentation, omission ro breach of warranty of authority, libel or slander
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Chairman - Code
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JAILED
Job desc - clear re time, crisis, committments Agenda setting Info provided - ensure Leadership Effectiveness of board Discussions open |
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Chairman - ICSA IBE
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SCARPERED
Succession planning Comms w s/hs Agenda Relevant discussions reserved for board Pivotal role Effective decision-making Rels w/ CEO & SID Engage all Director development |
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Chairman - CL duties
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National Dwellings Society v Sykes
preserve order run meeting in acc to law conduct vote (reach decision) |
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FRC Guidance BE
(15 points) |
'Good boards created by good C'
NEED No 'no go' areas Encourage participation Evaluation results acted on Director devt |
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Chairman - Tricker
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'Nothing grows under the oak tree' - v. dom C stifles debate
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CEO - ICSA IBE
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Sets example to employees
Proposes strategy to board Delivers strategy once agreed |
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Chairman & CEO - Cadbury args for separation
'clear division of resps in writing' (Code) |
CULTS
Concentration of power - no debate, unfettered dom Unlike qualities req'd - mngt v running board Leave at same time v. poss (Michael Grade at ITV) Too much work for 1 Strength to tell C when he should leave? |
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Walker - if Chairman & CEO roles joined -
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STIRS
Sufficient time needed for roles Temporary only - short period Include nomco - cuccession planning Roles set out in writing/agreed SID become sep channel of com & counter-weight to power |
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NEDs - Higgs
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Strategy (devt/challenge)
Performance (of execs) Risk People (rem, succession, app) 'Custodians of governance process' |
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NEDs - ICSA IBE
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GLITCHES
Good understanding of co Letter of app stating time req'd Induction Time sufficiently devoted Culture of boardroom app instilled Hold up standards of integrity/probity Ensure well-informed - insist on receiving clear info in advance S/h & s/k views learned |
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ProNED
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SPEC
Standards of F probity high Promote effective leadership Ensure effectiveness of execs Contribute independent view |
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NEDs - Walker
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Should be material input and challenge the execs.
NEDs bring balance to the board + act as a check on power of execs. |
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NEDs - effectiveness - Myners
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SWINGERS
Self-perpetuating oligarchy - missing link, don't stand up for s/h rights Weight of opinion of execs overriding influence - rely on them for info Insufficient time - too many positions (15 days/yr) No distinction in law from execs - support b/c 'know best' Golden triangle - informal apps, cross directorship (wider pool - Tyson) Encumber/delay decision-making Require more K of bus ops of co S/hs only speak to them in formal GM setting + infrequently |
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NEDs - independence
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TAMERS
Ties - close - family, advisors, cross-d's Additional rem above annual fee Material bus rel Employee of co recently Represents major s/h Served on board for 9+yrs |
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NED due diligence before accepting role
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SACRIFICED
Suitability - skill, esp, space on board Availability - suff time Conflicts of interest Research - ARA - ICS, RMS, s/hs, rep Independence criteria met Fee appropriate (hand over?) Integrity of FS - going concern Consent from other board Ethics, CG, rep D&O cover sufficient |
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SID
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Chairman - sounding board, support, review, convey d&s/h views, succession
NEDs - intermediary S/hs - channel of com when usual ones don't work |
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SID - ICSA IBE - period of stress when SID useful
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C/CEO dispute
C/CEO too close C bulldozing strategy through Succession planning ignored NED concerns ignored |
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SID - ICGN principles
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Necy when C/CEO too close or same person
Alternative conduit of com w s/hs |
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Jill Solomon - SID
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superfluous and undermind co-s/h rel
a good C renders SID unnecy |
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Board effectiveness
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ACCESSORISE
Agenda clear, BMs freq, action points acted on, list of matters for board C/CEO work constructively together Contribution for all d/s inc NEDs challenging - not viewed as restraint Ensure sustainable business Sufficient training in CG & support Sufficient & reliable info in good time (CoSec flows of info) Open/supportive env - culture/beh/attitude Rem appropriate (LT incentive schemes esp) Independent thinking/debate but common vision Suitable composition (skills/K/exp/size) Evaluations acted on |
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Higgs Guidance on Performance Evaluation
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DREAMT
Decide matters to look at Report how conducted in ARA External specialists (3yrs) Agree targets (use for comparison) Make necy changes/discuss weaknesses Targets reset for next year |
