ICSA publishes updated version of Guidance Note on joining the right board
Published on Thursday 12, May 2011
12 May 2011: The Institute of Chartered Secretaries (ICSA) has today published an updated version of its guidance note entitled ‘Joining the right board - due diligence for prospective directors’. The revised guidance is designed to advise prospective directors on the due diligence process they should undertake prior to joining a company.
ICSA is currently updating its suite of guidance notes which were previously appended to the Higgs guidance and this is the first of a number of notes to be published in the coming months. The recently published Financial Reporting Council’s ‘Guidance on Board Effectiveness’, which replaced the Higgs guidance, was drafted by ICSA with the help of a Steering Group.
Key recommendations in the note published today include:
- Having pre-appointment meetings with a number of board members and the company secretary as well as certain external advisers, especially if the individual is taking on the role of the chairman of the company or chair of the audit or remuneration committee
- Discussing with the board the outcome of the last board evaluation process, and the plans to tackle any areas which were considered to be in need of development.
One of the most useful aspects of the guidance note is the set of due diligence questions which prospective directors can draw on to help them assess the company in a number of areas. There is an increased focus on governance, the operation and behaviour of the board and the role of a non-executive director.
Seamus Gillen, ICSA’s Director of Policy, said:
‘Although the original guidance was intended for non-executive directors, we believe this updated version can help all directors reduce the risk of unwelcome surprises once they join a board, and increase the likelihood of finding themselves in an environment in which they can contribute and add significant value.’
ICSA would like to thank a working group of the ICSA Company Secretaries Forum for their assistance in the update of this note. The members of the working group were:
Susan Henderson, Company Secretary, Smith & Nephew plc
Mark Peters, Head of Secretariat, Balfour Beatty plc
Malcolm Wood, Company Secretary and General Counsel, Standard Life plc
Derek Woodward, Group Company Secretary, Thomas Cook Group plc
For further information please contact Rosie Hamilton on 020 7612 7062 or pressoffice@icsaglobal.com
Notes to Editors:
ICSA was commissioned by the FRC in December 2009 to lead a steering group to review the Higgs Guidance.
A full list of members of the Steering Group is as follows:
Nilufer von Bismarck, Partner, Slaughter and May
Andrew Campbell, Director, Strategic Management Centre, Ashridge Business School
John Coombe, Chairman, Hogg Robinson Group plc
Sir John Egan, Chairman, Severn Trent Plc (Chair)
Philippa Foster Back OBE, Director, Institute of Business Ethics
Chris Hodge, Head of Corporate Governance, FRC
Simon Lowe, Partner, Grant Thornton UK LLP
Ben Mathews, Company Secretary, Rio Tinto plc
Peter Montagnon, Senior Investment Adviser, FRC
David Paterson, Head of Corporate Governance, NAPF
David Wilson, Chief Executive, ICSA
A link to the FRC's final Guidance on board effectiveness can be found here.
The Institute of Chartered Secretaries and Administrators (ICSA) is the professional body for Chartered Secretaries and a leading authority on corporate governance. Chartered Secretaries are high-ranking professionals with a broad base of skills unique among the professions. Trained in law, finance and accounting, strategy, governance and ethics, Chartered Secretaries provide a focal point for independent advice and guidance about the conduct of business, governance and compliance.
Through its thought leadership in the areas of boardroom behaviour, reporting and risk management, its influence with government and regulators, and the work of its members, ICSA is helping to shape the governance agenda and promote the best practice essential to achieve enhanced board performance.