Ensuring General Wisdom: The critical role non-executive directors and trustees play in executive performance.

by J.A. Sutherland

Returning to what Higgs said in 2003. He described the NED role encompassing four elements: Strategy, Performance, Risk and People: Strategy: Non-executive directors should constructively challenge and contribute to the development of strategy. Performance: Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. Risk: Non-executive directors should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible. People: Non-executive directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning.