In an ever changing landscape, the expectation of Non-Execs is higher than ever with greater responsibilities, the need to ask the difficult questions, think about the long term, uphold the highest Corporate Governance standards, defend the interests of shareholders and to act truly independently; sadly we see many companies where this is just not happening.

“There is not a strong consensus on how to set the expectations of Boards so that they can perform their role … Demands on Non-Executives have risen to the point where it is time to stand back and take stock and find ways to improve the approach.” Andrew Bailey, Chief Executive Officer, Prudential Regulation Authority

Change comes about not only because of legal and regulatory requirements, but in some cases simply because Boards are under continuing pressure to improve their performance. There are a number of important questions about what makes for an effective Board that remain unanswered. Diversity is a key catalyst to effective conversation in the Boardroom, not only addressing areas such as age, ethnicity and gender but also skills, competencies, and business experience.

Board members are required to demonstrate expertise in many areas of risk: IT, digital/on-line, cyber security, the effects of Brexit, shareholder activism, M&A and Corporate Social Responsibility. Boardrooms have to become more agile and spend more time focusing on getting their strategy right. Chairmen will have to be more innovative and must expect to be challenged.

The impact of these changes means refreshing Boards to achieve successful succession planning is crucial. The importance of a thorough Board skills analysis will ensure Directors are being properly utilized and the right Non-Execs appointed to fill the gaps. Greater scrutiny of Board members by shareholders will inevitably drive recruitment of more ‘independent’ and effective Directors. 






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