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10 May 2010
The president of ICAS has called for non-executive directors to ask tough questions of management in efforts to ensure good corporate governance.
Speaking to CA magazine, Alan Thomson said the tone from the top had to be established by NEDs challenging the management.
"The important thing in governance is the 'tone from the top," said Thomson. "Non-executives need to go in and ask uncomfortable questions of the management.
"The days of the chairman surrounding himself with his chums on the board have come to an end.
"Boards can't behave like that any more."
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Visitor comments Add your comment
So what have they been doing exactly?
If the NEDs have not been doing this up to now, then what exactly are we, the sharholders, paying them for? And can we have our money back please?
Sometimes I despair of this profession.
(Retiring audit partners please note, by the way.)
Posted by: Duncan, 10 May 2010 | 00:00
Non Executive Directors
This is very true and important. so many companies have gone under because non executive directors have not played their role. while they see things not going in the right directing, they have failed to interogate and help the Executive directors manage effectively. Executive directors may either have their own interests at hand or may not see what mistakes they may be making in the way they manage the affairs of the company. Non executive directors must wake up because they are equally important and thats the reason why they have been appointed to the board. They need to take keen interest in all what is happening in the companies they sit on the board and question the systems, procedures, decisions and that way all the risks of failure are avoided. At the same time it also helps them professionary because when people appoint them to the board, they have trust in them possibly from their background from the companies they are managing or may have managed and for them to just sit on the board without contributing towards the well being of the company puts them in a much weaker position.
Posted by: Davies Muntanga, 10 May 2010 | 00:00
Enough said Alan !
"The days of the chairman surrounding himself with his chums on the board have come to an end.
Boards can't behave like that any more"
One quick glance at the Smiths Group website shows:
Chairman: formerly Amersham / Allied Domecq / Scottish Power
Audit Committee Chair: formerly Amersham
Chief Executive: formerly Allied Domecq / Scottish Power
Need I go on..........
Posted by: james, 01 Jun 2010 | 00:00