Role of the Board Member

Transcription

1 Role of the Board Member Key duties Advance the purpose of the organisation Proper administration of the organisation The buck stops with you (ultimate responsibility) Act reasonably and prudently Protect the assets - Collectively act in the best interest of the company Avoid conflicts of interest

2 Role of the Board member So: Concentrate on strategy, vision and mission of the organisation Know what is in your constitution especially the objects Be sensible Risk aware Have an appropriate board

3 Codes of governance The history Corporate failures: Enron, Polly Peck, Maxwell etc Number of codes arising from them: Cadbury - overall good corporate governance Greenbury remuneration of NEDs Hampel consolidation of Cadbury and Greenbury Higgs role and effectiveness of NEDs Smith role of audit committee Myners report shareholder voting

4 Codes of governance The history Combined Code NHF Code 1995, 2000, 2004, 2009 and 2010

5 NHF Code 2004 Code the big change pay and churn 2010 format change

6 A Constitution and composition of the board B Essential functions of the board C Board induction and information D Board recruitment, renewal and review E Responsibilities of the Chair F Conduct of the board s business G The chief executive officer H Committees of the board I Openness, transparency and accountability J Diversity and inclusion K Audit and risk L Conduct and probity

7 Why have a code? Consolidating principles of good governance into practice Allows you to comply or explain Sets a good minimum standard to work to Excellent flexible framework

8 NHF Code 2010 Separated into main principles and provisions. Also attaches good practice which is not part of the code Principles are the must dos

9 NHF Code 2010 A Constitution and composition of the board The board must be effective in leading and controlling the organisation and acting wholly in its best interest. Board members must ensure that the interests of the organisation are placed before any personal interests. B Essential functions of the board Each board must be clear about its duties and responsibilities. These must be set out and made available for all existing and potential board members.

10 NHF Code 2010 C Board induction and information All board members must receive induction on joining the board and should regularly refresh and update skills. The board must be supplied in a timely manner with information in a form and quality appropriate to enable it to discharge its duties. D Board recruitment, renewal and review Recruitment to board vacancies must be open and transparent, based on merit and objective selection and assessment techniques. The board must undertake a formal and rigorous annual appraisal of its members and of the board as a whole.

11 NHF Code 2010 C Board induction and information All board members must receive induction on joining the board and should regularly refresh and update skills. The board must be supplied in a timely manner with information in a form and quality appropriate to enable it to discharge its duties. F Conduct of the board s business The board must act effectively, making clear decisions based on timely and accurate information.

12 NHF Code 2010 G The chief executive There must be clear working arrangements between the board and the chief executive and clear delegation of authority. H Committees of the board Committees of the board may be established where the board determines that they will provide expertise and enable it to scrutinise and deliver effective corporate governance and manage risk.

13 NHF Code 2010 I Openness, transparency and accountability Boards must provide leadership in operating in an open and transparent manner, having satisfactory dialogue with key stakeholders including tenants. Boards must demonstrate accountability to shareholders and other key stakeholders. J Diversity and inclusion Boards must demonstrate leadership and commitment to equality, diversity and inclusion as outlined in the Equality Act 2010, across the organisation s activities.

14 NHF Code 2010 K Audit and risk The board must establish a formal and transparent arrangement for considering how the organisation ensures financial viability, maintains a sound system of internal controls, manages risk and maintains an appropriate relationship with external auditors. L Conduct and probity Organisations must maintain the highest standards of probity and conduct.

15 NHF Code 2010 Provisions underpin each principle. Designed to give some flexibility eg C1 Yet provide some stretch for boards - eg D1 Associated good practice and other documents etc to refer to.

16 How have members found it? Regulatory requirement to adopt a good code of governance (and is flexing its muscles on some parts) It s been around a long time and members comfortable with it Few have adopted the FRC Corporate code

17 Lessons learned (and some tips if CHCymru were to produce a code) Don t start from scratch Try to avoid decisions by committee Do consult Certain areas will be contentious Emphasise the principle around comply or explain and the need to stand back and see the big picture

18 What would I change if I was reviewing the code? Term of office Board size Equality and Diversity section Risk Code of conduct Probity section VFM New structures

19 AOB Things on my radar Board pay Term and churn Risk Role of the chair Skill and competencies on the board

20 Thanks for listening! Stephen Bull Head of Governance and Company Secretary