Non-Executive Director (NED) Academy

A new 3-day course which has been specially designed to help participants tackle the many challenges of becoming effective, non-executive directors (NEDs, also known as “Outside” Directors). These challenges include selecting the right board and company, allocating one’s time, evaluating legal responsibilities and liabilities and undertaking duties that involve participation on committees and supporting strategic decision-making. Particular focus is given to helping NEDs understand how to ask the right questions in an effort to close the gap between their potentially non-expert understanding of a given company issue and the management’s disclosure of performance in that arena. Participants will learn: How to decide whether to accept a NED invitation The time, resource and legal commitments involved in becoming a NED Global-best practice and legal considerations in board operations (including Sarbanes-Oxley, Dodd Frank, UK Corporate Governance Code and OECD rules and guidelines) How to distinguish the NON-executive director from the executive director role: that is, knowing where to draw the line in NED activity Rules of voting and conflict resolution, particularly between directors and the CEO or between directors Board committee formation: including risk, strategy, audit and compensation Effective oversight and performance assessment Challenges related to outside minority and majority investors, investor activists and outspoken investors Numerous scenarios of conflict and challenges that face boards from case studies and their resolutions
Day 1 Grasping the Role of the NED Introduction What is a “Non-Executive Director (NED)”? Common definitions Legal meaning Powers and responsibilities (summary) Place in the news and recent events Expectations of NEDs, in light of Walker Review, Turner Review, Sarbanes-Oxley and the UK Corporate Governance code Aims of the course Preparatory issues How to decide whether to accept a NED invitation Evaluating the candidate company’s governance apparatus Understanding the CEO’s aims Reading between the lines of company performanc What to worry about and what not to worry about Do you have something to contribute? Are you capable of passing judgment on strategic plans as well as insights? Do you have the time available to offer your input and attend meetings? Are you aware of the risks? Legal Obligations Fiduciary duties Duties of skill, care and diligence Liability Tort Corporate Manslaughter Statutory Duties The Companies Acts o Codified Directors’ duties o Liability o Substantial property transactions o Disclosure of interests in contracts o Administrative breaches o Actions beyond the director’s powers or beyond the objects of the company o Other Acts, sanctions and disclosure rules What makes a good NED? Challenging, monitoring, understanding plans and operations Succession planning assistance Managing your career as a NED Day 2 Challenges as a NED Forming and participating in Committees Basic board-level procedures Written consent Typical Committee structure and roles Audit Committee Strategy Committee Risk Committee Compensation Committee Nominating Committee Governance Committee Case Study: Merck Board operations How the NED works within each committee The problem of lacking expertise Committee oversight: The Art of Asking the Right Questions Recognising your knowledge gap Understanding the parameters of the management function you’re overseeing Acquiring sufficient knowledge Ways and Means as a NED: Getting What you need Total access to business facts Vigorous and uninhibited discussion on business matters Independence from the company Information on the company’s true performance Information about how decisions are made Forging and Asking the Right Questions What to do if you can’t get the information you need Day 3 Is your board operating properly? Understanding good corporate governance Independence Tenure Remuneration Number of Posts Internal control Training Senior NEDs Committees Challenges and Scenarios involving NEDs Lack of Consensus—about mission, about vision, about role of the board of directors (BoDs) Lack of understanding—about duties of board members, financial statements, risk management High turnover of the BoDs and CEO Unresolved conflicts between board members or between the BoD and CEO Practice of the board not fitting by-laws or best-practice Confusion over conflicts of interest Decision paralysis Information improperly or inaccurately presented to directors BoD that runs well but focuses on wrong issues Poorly Chaired meetings Poor relationships with stakeholders Superfluous number of committees Concluding Exercises and Discussion