Categories
Non-Executive Director Opinion

10 things Non-Executive Directors can do to satisfy their legal responsibilities

Falling foul of the law can have serious consequences for Non-Executive Directors – here are 10 steps you can take to avoid it happeningNED3

The 2006 UK Companies Act, which sets out the legal duties and responsibilities of Company Directors, is one of the longest pieces of legislation ever written. Falling foul of the law can have serious consequences for directors including personal and potential criminal liability yet many directors, particularly NEDs, take on their roles in blissful ignorance of the law.

Before becoming a company director you should have a basic understanding of your legal duties and responsibilities and you should check for indemnity provisions in the company articles of association and your Directors’ and Officers’ (D&O) insurance arrangements.

Once in post, here are 10 things you can do to avoid the potential pitfalls:

  1. Remember that compliance is the responsibility of all directors – not just the Company Secretary, Chair, CEO or other Executives.
    Whilst individual directors may have particular responsibility for the day-to-day mechanics of compliance, it is the board’s responsibility, collectively, to ensure that the statutory requirements are met. Filing annual returns and accounts may be the job of the Finance Director or Company Secretary but persistent failure to file on time can lead to penalties being imposed on all the other directors, including the NEDs. Make sure that the board receives regular assurance on compliance matters and do not assume it is being taken care of by the other directors.
  2. Check your status as a Company Director.
    Many Non-Executives start working with boards as advisors or consultants before they are formally appointed as NEDs and assume that as they are not registered as a company director at Companies House then the law does not apply to them. If you actively take part in board meetings or hold yourself out to be a director then you run the risk of being classified as a “shadow’ or “de facto’ director and thus share the same legal duties, responsibilities and liabilities as the other board members. Make sure that your legal status and that of the other board attenders is clear.
  3. Keep accurate records of board meetings.
    Every board meeting agenda should contain an item which gives directors the opportunity to review the minutes of the previous meeting. Make sure that you use this opportunity to make any corrections that are required to ensure that the minutes accurately record the discussions that took place together with any resolutions and actions. Pay particular attention to items where your personal contribution is mentioned. Keep your own copy of board minutes for at least six years after you have ceased to be a member of the board..
  4. Be aware of key statutory filing requirements.
    Make sure that you know when key documents such as the annual accounts and annual returns need to be filed. You can use the Companies House web-check facility to check that the business is up to date with its filing requirements. Also be aware of other matters such as certain shareholders’ resolutions, allotments of shares and the appointment of new directors, which need to be notified to Companies House within specified time limits.
  5. Familiarise yourself with the Articles of Association and other constitutional documents.
    One of the prime duties of a company director, as set out in the 2006 Companies Act, is to ‘act within powers’. These powers can be found in the company’s Articles of Association together with any shareholder agreements or contracts which form the constitutional documents for the business. As soon as you are appointed to a board you should read these documents and familiarise yourself with the specific requirements for the calling of a shareholders’ meeting or provisions relating to directors’ meetings and remuneration. The board should review the Articles on a regular basis to ensure that they are still relevant to the operation of the business
  6. Take all reasonable steps to avoid conflicts of interest.
    ‘Declaration of interest’ should be a standing agenda item for a board meeting, giving directors the opportunity to declare a personal interest in an item to be discussed at that meeting. There should also be a register of interests, reviewed annually, which records the external interests of board members and their immediate families. These are both particularly important for NEDs who are more likely to have external interests than the executives. However, simply declaring an interest is not necessarily all that a director has to do to avoid a conflict of interest. It may be appropriate to physically absent yourself from the board meeting for the duration of the discussion of a matter where you are conflicted and have this absence clearly recorded in the minutes. In some cases directors resign their posts and re-join the board once a conflicted matter has been resolved.
  7. Avoid accepting benefits from third parties.
    Taking a bribe from a potential supplier is clearly wrong but what about corporate hospitality? As with conflicts of interest, many boards keep a register to record gifts or hospitality given to directors or senior managers, usually above a set amount. They also have specific policies and procedures that directors should adhere to. The best advice though is not to accept anything, even a sandwich or cup of coffee if it could be interpreted as an inducement by a third party.
  8. Watch out for insolvency.
    After failing to file your statutory documents on time, the next most heinous crime a director can commit is ‘trading whilst insolvent’. A company is insolvent if it cannot pay its debts when they are due to be paid. Many businesses, especially start-ups or those with high growth can sail near to or actually become technically insolvent. They can then only continue to trade if they have a reasonable belief that they can trade out of their insolvent position. It is vital therefore, for the board to seek external advice from an insolvency practitioner as soon as possible in order that there is independent confirmation of the reasonableness of their position. Failure to act promptly and responsibly can leave directors open to unlimited personal liabilities.
  9. Speak out – do not ignore warning signs.
    If you have concerns about any company decisions, or the content of any documents such as accounts or board papers, make your views known. It is your duty to act with reasonable skill, care and diligence. The 2006 Companies Act does not differentiate between executive and non-executive directors – as a board member you are jointly and severally liable for all board decisions and can become personally liable if the board knowingly does something illegal.
  10. Get trained to become a company director.
    A Non-Executive Director appointment can be a very rewarding career move but it is not something that should be entered into lightly. In addition to performing due diligence on the business, a prospective NED should fully understand the duties and responsibilities of a company director.
    Excellencia provide a 1-day course for prospective NEDs (How to become a Non-Executive Director) for £330 (ex VAT)
Categories
Non-Executive Director Training

How to become a Non-Executive Director – Bristol 24 February 2015

Are you thinking of becoming a Non-Executive Director as part of a Portfolio Career or to develop your boardroom skills prior to taking up an executive director role?

How to become a Non-Executive Director

Join us on Tuesday, February 24 2015 to find out how you can become a Non-Executive Director

“Unlike many courses I have attended in the past, How to become a Non-Executive Director went beyond just the technical aspects of being a ‘Non-Exec’, and reflected on the differences in the approach required compared to being an Exec Director.
It allows you to make a fully informed decision on whether a Non Exec role is right for you, and if it is, how to go about finding opportunities.
An invaluable day of learning!”

Alastair Lewis Director at Smaointe Ltd

The How to become a Non-Executive Director course helps you to plan and prepare for your first NED position. It instils a real sense of what is expected of NEDs, and how you can meet the challenge.

This one-day interactive course is aimed at aspiring NEDs and covers essential knowledge about roles, responsibilities, strategy and corporate governance that are key foundations for a Non-Executive board role. It also considers up to date thinking on corporate governance and the responsibilities of owners, the board and employees.

This is followed by practical sessions on identifying NED opportunities, the process of obtaining a first appointment and performing due diligence before any position is accepted. There is emphasis on the importance of presenting your experiences with clarity and relevance.

This course identifies the various ways and circumstances in which non-executive directors can make an effective contribution to a board’s work. It also examines methods for their selection and reviews their motivation, induction and reward.

Who should attend?
Individuals who are currently a non-executive director; those seeking appointment as a non-executive director and those looking to appoint a non-executive director.

What to expect?

  • Clarifies how and why non-executive directors can strengthen a board
  • Provides practical guidance on how best to secure an appointment as a non-executive director

Course objectives
Participation on this course will provide you with the knowledge to:

  • Clarify the board’s role, purpose and key tasks
  • Appreciate the contributions that non-executive directors can make to the board in different types of company and situations
  • Recognise the qualities and experience needed to fulfil a non-executive director appointment
  • Appreciate appropriate methods for finding, selecting, appointing and rewarding non-executive directors
  • Understand the preparation required to interview for or be interviewed for the post of non-executive director

Course Leader: David Doughty CDir FIoD

David Doughty - Chartered DirectorThe course is delivered by David Doughty, a Chartered Director and highly experienced Non-Executive, Chief Executive, Chair, Entrepreneur and Business Mentor. David has extensive executive and non-executive experience in small and medium enterprises in private and public sectors. He is also a board level consultant to multi-national organisations and a Chartered Director Ambassador for the Institute of Directors. See his LinkedIn profile here: (http://uk.linkedin.com/in/daviddoughty)

Key Details
Duration: 1 day
Location:

Orchard Street Business Centre
14 Orchard Street
Bristol BS1 5EH

Price

£330.00 (ex VAT)
Payment with Booking Price
£300.00 (ex VAT)
Tier1 Member Price
£280.00 (ex VAT)

Book Now

To see course dates and to book your place now follow this link:
Course Registration
The fee includes lunch, refreshments and a copy of the course handbook

Attendance counts as 6 CPD hours of structured learning


 

Discounts on Excellencia course fees are available for:

Categories
Non-Executive Director Training

How to become a Non-Executive Director – Bristol 20 January 2015

Are you thinking of becoming a Non-Executive Director as part of a Portfolio Career or to develop your boardroom skills prior to taking up an executive director role?

How to become a Non-Executive Director

Join us on Tuesday, January 20 2015 to find out how you can become a Non-Executive Director

“Unlike many courses I have attended in the past, How to become a Non-Executive Director went beyond just the technical aspects of being a ‘Non-Exec’, and reflected on the differences in the approach required compared to being an Exec Director.
It allows you to make a fully informed decision on whether a Non Exec role is right for you, and if it is, how to go about finding opportunities.
An invaluable day of learning!”

Alastair Lewis Director at Smaointe Ltd

The How to become a Non-Executive Director course helps you to plan and prepare for your first NED position. It instils a real sense of what is expected of NEDs, and how you can meet the challenge.

This one-day interactive course is aimed at aspiring NEDs and covers essential knowledge about roles, responsibilities, strategy and corporate governance that are key foundations for a Non-Executive board role. It also considers up to date thinking on corporate governance and the responsibilities of owners, the board and employees.

This is followed by practical sessions on identifying NED opportunities, the process of obtaining a first appointment and performing due diligence before any position is accepted. There is emphasis on the importance of presenting your experiences with clarity and relevance.

This course identifies the various ways and circumstances in which non-executive directors can make an effective contribution to a board’s work. It also examines methods for their selection and reviews their motivation, induction and reward.

Who should attend?
Individuals who are currently a non-executive director; those seeking appointment as a non-executive director and those looking to appoint a non-executive director.

What to expect?

  • Clarifies how and why non-executive directors can strengthen a board
  • Provides practical guidance on how best to secure an appointment as a non-executive director

Course objectives
Participation on this course will provide you with the knowledge to:

  • Clarify the board’s role, purpose and key tasks
  • Appreciate the contributions that non-executive directors can make to the board in different types of company and situations
  • Recognise the qualities and experience needed to fulfil a non-executive director appointment
  • Appreciate appropriate methods for finding, selecting, appointing and rewarding non-executive directors
  • Understand the preparation required to interview for or be interviewed for the post of non-executive director

Course Leader: David Doughty CDir FIoD

David Doughty - Chartered DirectorThe course is delivered by David Doughty, a Chartered Director and highly experienced Non-Executive, Chief Executive, Chair, Entrepreneur and Business Mentor. David has extensive executive and non-executive experience in small and medium enterprises in private and public sectors. He is also a board level consultant to multi-national organisations and a Chartered Director Ambassador for the Institute of Directors. See his LinkedIn profile here: (http://uk.linkedin.com/in/daviddoughty)

Key Details
Duration: 1 day
Location:

Orchard Street Business Centre
14 Orchard Street
Bristol BS1 5EH

Price

£330.00 (ex VAT)
Payment with Booking Price
£300.00 (ex VAT)
Tier1 Member Price
£280.00 (ex VAT)

Book Now

To see course dates and to book your place now follow this link:
Course Registration
The fee includes lunch, refreshments and a copy of the course handbook

Attendance counts as 6 CPD hours of structured learning


 

Discounts on Excellencia course fees are available for:

Categories
NHS Non-Executive Opinion

What makes a good NHS Non-Executive Director?

The Francis and Keogh reports highlight the need for good governance and effective Non-Executive Directors in the NHS

Both Francis and Keogh reports have highlighted the crucial role played by Non-executive directors in the NHS.

Questions about standards of nursing care, above average mortality rates and low staff morale are continually being asked by the media – increasingly turning the spotlight on the governance of the NHS.

Patients, carers, doctors, nurses and managers are concerned and anxious about the level of care they can either expect to receive or that they are able to deliver. The Care Quality Commission, the body which is supposed to provide an independent assessment of quality in NHS trusts, has been discredited over its failure to spot departures from acceptable standards of care in several high-profile cases and there is a degree of confusion in other regulatory bodies as they struggle to find their way in the newly transformed NHS.

NHS staff, already feeling the pressure of having to deliver more services and reduce costs, are now having to deal with the added burden of having to reassure patients and carers that theirs is not a failing trust.

NHS Non-Executive Directors are the eyes and ears of the outsider with privileged access to the inside of the Hospital, Mental Health or Community Health services upon whose board they sit. Together with the Governors (in a Foundation Trust) or the Staff Council (in a Social Enterprise) they are responsible for ensuring that the trust is governed effectively.

Speaking on Quality governance the Keogh report says:

“Too often our reviews found quality issues of which the board were unaware. whilst many boards could point to improvements in quality governance processes (e.g. undertaking walkabouts in the hospitals), review teams were concerned that boards could too easily accept the assurances they were receiving and were not really listening to contradictory evidence or seeking more robust assurance. in some cases, the non-executive directors and chairs of the trusts were not providing appropriate critical challenge to the management team.”

One of the recommended actions from the report is that:

Monitor and the NHS Trust Development Authority should consider the support, development and training needed for Non-Executive Directors and Community, Patient and Lay Governors to help them in their role bringing a powerful patient voice to Boards.

So what makes a good NHS Non-Executive director?

Critical qualities

  • NHS Non-Executive Directors must have a clear understanding of their role and how they can most effectively serve their trust.
  • They must ensure the trust is governed properly: that it complies with the right laws and regulations, that its strategies are robust, its business plans achieved and that stakeholder and patient interests are protected.
  • Non-Executive Directors must be independent minded, have integrity and gain the respect of other board members. Despite their personal liability, they need to step back from the detail (having satisfied themselves that there is a robust management, information flow and performance management structure in place at executive level) and be prepared to look at the trust’s business from a “big picture” perspective.
  • Time is an important factor. Most advertisements for NHS Non-Executive Director vacancies talk of a commitment of two to three days a month – the reality is often double that number. Especially now, with the spotlight on NHS governance, Non-Executive Directors should be prepared to spend enough time on the job to ensure that they are effective and well informed on the key issues faced by the trust.
  • Non-Executives also need the ability to wade through papers and other statistics and elicit the knowledge they need to perform their role effectively without being overwhelmed by detail. In fact, detail is often the enemy of the Non-Executive Director.
  • Chemistry with fellow board members is also vital. That does not mean bending over backwards so everyone gets along but rather conducting themselves in a mature and professional manner and being prepared to monitor the activities of the trust and challenge the performance of the organisation and its executive.
  • Non-Executive Directors should keep in touch with fellow Non-Executive Directors to share best practice between meetings, as well as immerse themselves in the trust’s business in the early days, asking lots of questions before forming opinions.
  • Assertive judgements or challenges based on ignorance or misinformation will not enhance the image of a Non-Executive Director and only damage their credibility.
  • In terms of the board and particularly the executive team, the role of a Non-Executive Director is to offer advice, challenge and apply sound governance. The challenge is to do that as part of the team rather than appear as someone standing outside and criticising without an appreciation of the tough job the executive team has to do. The executive team must also be open and keen to take on board advice from Non-Executive Directors.
  • The best Non-Executive Directors are those with strong influencing skills, good powers of judgement, insight and vision, and good listening skills. It is also important to be committed and enthusiastic about the trust and to inspire confidence. Showing that you are level headed will help boost credibility and respect.
  • Good training is important in developing Non-Executive Directors – there should be a training programme in place together with personal development plans. This will help to identify each board member’s particular skills, how they can be used and developed and which skills are missing across the board.

Assuming you have all of the above critical qualities how do you then make sure that you are an effective member of the board?

The keyword is assurance – how do you know that what is being said at board meetings is the whole picture?

You need to triangulate the information you are receiving from a number of sources to give you a feeling of how the trust is performing – much of this triangulation happens outside the boardroom, which is why being a Non-Executive Director is so much more than just attending board meetings or reading the board pack.

As an NHS Non-Executive Director you should make it your business to visit every area of the organisation – hospital wards, clinics, departments and anywhere that services are delivered. Try to visit at different times of day and night and on different days of the week – especially at weekends. Introduce yourself to the staff on arrival and then, quietly and unobtrusively, observe what is happening. You may think this is impossible: that managers will resent you and feel undermined, that staff will behave differently because you are there, that you ought not to disturb patients. Remind yourself, when you need to, that your role is different from the managers’, because you are not compelled to take action. You have a right and a responsibility to use your eyes and ears: sit or stand quietly to one side, for only a few minutes and you will be surprised at how quickly people forget you are there.

When you do so, you will see for yourself the welcome patients receive; whether they can see the name of the person dealing with them; whether and how staff introduce themselves. You will see if you can tell from the uniforms who is who, and what their role is. You can look for the written information for patients that is available to staff on the wards; you can see the quality of the physical environment and feel the atmosphere.

Introduce yourself to patients and relatives – find out if they know who is in charge of their care and how they can contact that person should they need to. Talk to the staff – find out what they think of their area of work and of the hospital. What do they like and what frustrates them? What would they like to change and why, and what do they feel they can do about it?

Make sure that the trust executives are aware of and supportive of these visits. If you find that you are a member of a board which is uncomfortable with Non-Executives talking to staff, patients and carers then raise this as an important board matter. It is impossible for you to effectively discharge your duties as a director if you are not encouraged to find out about the culture of the organisation at first-hand.

For the most part, what makes a good NHS Non-Executive Director is pretty much the same as what makes any Non-Executive Director effective. The difference is that the NHS has the power to dramatically effect people’s lives much more than probably any other organisation in the country.

What makes a good NHS Non-Executive Director is the realisation that along with your fellow board members you are responsible for ensuring that the trust delivers the highest standards of patient care.

Categories
Non-Executive Director Training

How to become a Non-Executive Director – Bristol 20 May 2014

Are you thinking of becoming a Non-Executive Director as part of a Portfolio Career or to develop your boardroom skills prior to taking up an executive director role?

How to become a Non-Executive Director

Join us on Tuesday, May 20 2014 to find out how you can become a Non-Executive Director.

“Excellent course giving a clear picture of the role, the skills and characteristics required, the range of NED opportunities and the various routes to secure such positions. As a bonus you also meet interesting people and useful contacts. A good career investment.”

Mark Lambert, Non-Executive Director

The How to become a Non-Executive Director course helps you to plan and prepare for your first NED position. It instils a real sense of what is expected of NEDs, and how you can meet the challenge.

This one-day interactive course is aimed at aspiring NEDs and covers essential knowledge about roles, responsibilities, strategy and corporate governance that are key foundations for a Non-Executive board role. It also considers up to date thinking on corporate governance and the responsibilities of owners, the board and employees.

This is followed by practical sessions on identifying NED opportunities, the process of obtaining a first appointment and performing due diligence before any position is accepted. There is emphasis on the importance of presenting your experiences with clarity and relevance.

This course identifies the various ways and circumstances in which non-executive directors can make an effective contribution to a board’s work. It also examines methods for their selection and reviews their motivation, induction and reward.

Who should attend?
Individuals who are currently a non-executive director; those seeking appointment as a non-executive director and those looking to appoint a non-executive director.

What to expect?

  • Clarifies how and why non-executive directors can strengthen a board
  • Provides practical guidance on how best to secure an appointment as a non-executive director

Course objectives
Participation on this course will provide you with the knowledge to:

  • Clarify the board’s role, purpose and key tasks
  • Appreciate the contributions that non-executive directors can make to the board in different types of company and situations
  • Recognise the qualities and experience needed to fulfil a non-executive director appointment
  • Appreciate appropriate methods for finding, selecting, appointing and rewarding non-executive directors
  • Understand the preparation required to interview for or be interviewed for the post of non-executive director

Course Leader: David Doughty CDir FIoD

David Doughty - Chartered DirectorThe course is delivered by David Doughty, a Chartered Director and highly experienced Non-Executive, Chief Executive, Chair, Entrepreneur and Business Mentor. David has extensive executive and non-executive experience in small and medium enterprises in private and public sectors. He is also a board level consultant to multi-national organisations and a Chartered Director Ambassador for the Institute of Directors. See his LinkedIn profile here: (http://uk.linkedin.com/in/daviddoughty)

Key Details
Duration: 1 day
Location:

Orchard Street Business Centre Bristol
14 Orchard Street
Bristol BS1 5EH 

Price

£330.00 (ex VAT)

Early Bird Discount Price
£300.00 (ex VAT)

Book Now
To see course dates and to book your place now follow this link:
Course Registration
The fee includes lunch, refreshments and a copy of the course handbook

Attendance counts as 6 CPD hours of structured learning