Corporate Governance are words that have leapt to the top of most organisations agendas over the last couple of years, and will likely enjoy the keenest focus from regulators the world over. NEDs need to be fully familiar with the laws and regulations of the areas in which they operate, and so qualified to lead the businesses they represent in dynamic, entrepreneurial and prudent ways that enhance stakeholder value. This subject is so important that several organisations have recently published up to date guidance on it. In December 2009, the Financial Services Commission Gibraltar issued a Consultation Paper on Corporate Governance of Firms; this is a good starting point to understand the impact and responsibilities that NEDs carry as they fulfil their roles in todays business environment.
Similarly, the OECD has recently launched an initiative titled “Towards Better Corporate Governance”: in Paris, on March 18, 2009 OECD Secretary General Angel Gurría will welcome representatives from governments, the private sector, trade unions and civil society to address the role of corporate governance in the financial crisis. This Global Consultation seeks “...to address weaknesses in corporate governance that are related to the financial crisis.” These are issues that will not go away, and are fundamental to fulfilling the role of being NED.
Suitable qualification is a key element of being a NED and even if already professionally qualified, members may wish to consider more specific training in the responsibilities, liabilities and accountabilities related to being a NED. A good starting point is the Institute of Directors in the UK, amongst general membership and services, the Institute offer specific and relevant Board Development Services and have established the Chartered Director course as a gold standard in director qualification. For IOD guidance on Corporate Governance, there is a Factsheet on the subject in the UK that is also worth reading, as is the Four Key Tasks of a Board, another well researched IOD publication.
Being a subject expert is no longer sufficient - todays directors need to be upspeed on relevant issues to their industry and fully conversant with the role and duties of a director, which encompasses the law, relevant regulation and of course Company procedures, policies and practices. Today's NED has to be on top of their game and looking to remain up to date, informed and learning. Finally, the IOM FSC has published a Guidance Note on the Responsibilities and Duties of Directors under the Laws of the Isle of Man and is recommended as essential reading.
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