PracticeConsultingNon-exec controls to hit directors.

Non-exec controls to hit directors.

UK company directors are facing growing restrictions on the number of non-executive directorships they can hold as corporate governance pressures mount on British business.

Non-executive directors are being urged to limit their work commitments and concentrate on fewer directorships due to increasing corporate governance requirements and mounting shareholder pressure for improved accountability.

British Telecom, whose management is under pressure from shareholders over its debts, this week said it did not rule out the possibility of imposing restrictions in a year’s time, although a spokeswoman said there were no current plans to do so.

Its chairman, Sir Iain Vallance, and chief executive Sir Peter Bonfield, both sit on other company boards. Both are facing pressure from some quarters to resign over their management of BT, and this week cancelled a meeting with leading investors.

Daniel Somerfield, corporate governance executive of the Institute of Directors, said: ‘On the strategic side, non-executive directors are now being valued more. They are not just strictly policemen. People are realising their value, wider knowledge, detachment and independence.’

Peter Waine, director of Hanson Green, a British search firm that recruits NEDs for boards of about a third of FTSE-250 companies, said: ‘Previously people took them (NEDs) for status and money, but it’s changed now. You have to be a great strategist and confidant. The greater demands on the role also mean board colleagues don’t want you away (from the board) so much.’

US companies have taken the lead in realising the value, in economic terms, of independent NEDs dedicated to one or two company boards, instead of the traditional six or seven.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer