Do We Need a Board?

An independently written article by David Casey for the Informed Executive asks the question “So who needs a Board?”

There is often a clash of views on the value of a Board polarised between the views of the Executive versus Non-Executive Directors.

Typically:-

–        Executives see the Board as a nuisance, adding little value

–        Non-Executives find there is a resistance from Executives to provide adequate information

There is a maturing of understanding of these views by both groups as the impact of the UK Corporate Governance Code is filtering into the consciousness of Directors.

The requirement for constructive challenge is a key to the change, one example noted by Genius Method during an interview of a Non-Exec was “now I understand my role”.

The FRC “Guidance on Board Effectiveness” is a very useful guide to Directors on the interpretation of their roles and responsibilities.  Understanding Director responsibilities as also defined in the Companies Act, Clause 172 as described by David Chivers in his Guidance is what is giving Directors the support to challenge constructively.

Board evaluations are focusing on the existence of challenge by NED’s which is helping all Directors understand their need to question constructively for the benefit of long term sustainability of the entity