After all, what role do non-executive directors represent? – The Economic Journal

After all, what role do non-executive directors represent? - The Economic Journal


Let us start with the OECD, which, in its Corporate Governance Principles, states that "the management body must have the capacity to carry out, objectively and independently, the evaluation of the company's business, and that, therefore, sufficient number of its members to enjoy independence from management ". What, in other words, is non-executive. Let's narrow the focus and see what the Code of Corporate Governance of the IPCG on the matter establishes. In its Chapter III, it points out, as a principle to be adopted by the issuing companies, that "members of the corporate bodies with non-executive management and supervisory functions must exercise, in an effective and judicious manner, a supervisory function and challenge the executive management for the full realization of the social purpose ".
These are only two underlining, but they give us an idea of ​​the importance, in the calculation of corporate governance, of the role that non-executive directors must play and of the capacity they must meet in order to fulfill their mission.
Take again, in reference to the IPCG Code and highlight the words "in an effective and judicious way" and "of challenge". And for what? Precisely to confront the requirement of the components rigor and responsibility with minimal training indispensable on a vast array of management tools. But not only. The non-executive director also has the duty to challenge the management body that integrates, presents and bases diverse solutions on the table for discussion, formulates and raises the discussion about alternatives to those that are being pursued, in a word, the non-executive director is decisive in improving the quality and, in particular, the effectiveness of corporate governance systems. It is obvious that the principle of diversity that should govern the constitution of the administrative body, as a collective entity, mitigates this multiplicity of knowledge, but it is not obvious that it is available, for the adequate fulfillment of the functions it performs on the board, in addition to other requirements , of a consistent level of training.
This is the objective pursued by the IPCG with the organization of the Advanced Program for Non-Executive Directors, whose 4th edition was concluded days ago and again with high levels of satisfaction demonstrated by the thirty participants who joined this training. Of the 93% who rated it "excellent" and "very good", it is worth highlighting the opportunity of this initiative and giving solid arguments to the IPCG to continue to follow this path.

Manuel Maria Agria, Executive Vice President of the IPCG.

This article was produced in collaboration with the IPCG.



Source link