NED-only meetings and board dynamics
Non-executives should meet by themselves from time to time without the executives. It doesn’t matter what the type of Board – the principle applies whether you’re a FTSE 100 plc, a trustee board of a charity or a private company. For some boards, it’s a routine discussion that has no negative effect on board dynamics, but a large number of boards struggle with the concept – and the practice.
NED-only sessions are something the Code refers to specifically (Provision 13) but that’s not the main reason your Board should be doing it. Do it because the non-executive directors are holding the executives to account and they can do that better if they have a little space for a frank exchange of views amongst themselves without having to think about how the executives will react.
So why do many boards find it difficult? We look in this month’s bulletin at some of the good – and not-so-good – practices which we see when we’re evaluating boards.