In a speech at the IoD’s annual convention in London, Lord Young of Graffham said the role non-executive directors are expected to perform in a company is ‘the biggest and most dangerous nonsense’ in the current code of corporate governance.
He said outside directors did not and could know enough about the business they supervised.
Young explained that the only time he worked as non-executive director, he found out about the business in a way no outside director could know.
‘I realised over those few months that, as outside directors, we knew little about the business we were supposed to direct and, in truth, were directors in name only.’
He defended non-executive directors saying they could only judge what management told them adding that ‘if management is not too forthcoming, they can never know until it’s far too late.
Furthermore he said all information about remunerations should be transparent, making it a criminal offence if necessary, when a board withholds this information from shareholders.