The role offers insight into the biggest and most exciting deals companies
pursue, and the most scandalous exposés when they fail.
With that power comes responsibility – to objectively apply financial
reporting and internal control principles, and for maintaining an appropriate
relationship with the auditors.
But the latest private gathering of NEDs, organised by E&Y, shows that
these wise men and women are finding their jobs have become more onerous and
more risky than ever before.
Apart from the requirement of being up to speed on every new piece of
legislation, rule and consultation document, organised crime and manslaughter
issues are now keeping NEDs up at night. Such problems are a far cry from the
traditional issues we’d have expected NEDs to worry about.
Yet during E&Y’s roundtable, the word ‘risk’ was consistently repeated,
whether referring to organised crime, pension deficits or the high turnover of
transaction-based staff at the coalface of where mistakes are made.
It’s disconcerting that these men and women, from whom we already demand
expertise and knowledge ranging from accounting to law, must bear the burden of
all these additional risks like over-laden pack animals.
It suggests that Plcs could be facing an NED crisis. Greater financial reward
and a better grooming of successive NEDs could help improve the situation.
Whatever happens, something needs to be done to make NED roles more attractive.
Penny Sukhraj is a reporter on Accountancy
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