A sample non-executive director's appointment letter

Published on Thursday 15, December 2011

15 December 2011: The Institute of Chartered Secretaries (ICSA) has today published an updated version of its sample non-executive director’s appointment letter. The revised guidance note is designed to provide an initial checklist of elements a company may wish to cover in its non-executive director appointment letters.

Various sections have been expanded, notably appointment, time commitment and the duties. There is a new clause on training, and a number of new standard clauses, commonly found in this type of appointment letter.

One of the areas highlighted in the Financial Reporting Council’s (FRC) ‘Guidance on Board Effectiveness’ was the importance of non-executive directors having sufficient time to carry out their role. The sample letter reflects the need for non-executive directors to be aware that there is no maximum time commitment, particularly during times of increased activity.

Seamus Gillen, ICSA’s Director of Policy, said: 'We shouldn't underestimate the importance of clarity in the terms on which a non-executive director is appointed. Both the board and the director will benefit, and shareholders' interests will be better protected. This is more than a simple piece of housekeeping.’

ICSA would like to thank a working group of the ICSA Company Secretaries Forum, and Slaughter and May for their assistance in the update of this note. The working group members were:

Katherine Flower, Associate, Slaughter and May
Susan Henderson, Company Secretary, Smith & Nephew plc
Charles Pender, Director, Corporate Affairs, Amlin plc
Mark Peters, Head of Secretariat, Balfour Beatty plc
Malcolm Wood, Group Company Secretary and General Counsel, Standard Life plc
Derek Woodward, Group Company Secretary, Thomas Cook Group plc

ICSA is in the process of updating its suite of guidance notes which were previously appended to the Higgs guidance and this is the second in the suite to be updated and published. The FRC’s ‘Guidance on Board Effectiveness’, which replaced the Higgs guidance, was drafted by ICSA with the help of a Steering Group.

To download the guidance note, please click here. To access all ICSA’s guidance notes, please click here.

For further information please contact Rosie Hamilton on 020 7612 7062 or pressoffice@icsaglobal.com