Now in its 23rd year, “Life in the Boardroom” is the most comprehensive study of its kind with more responses this year than ever before.The 502 directors – 316 chairmen and 186 non-executive directors – who have contributed to the survey provided data on 1,328 appointments on FTSE main market, AIM and private company boards, including private equity-backed businesses, across all sectors.
In summary, the role of the chairman and NED has never been more important nor more challenging and, whilst the financial rewards are generally not comparable to those for executive roles, the ideal non-executive is one who does not need the position for money and has chosen the company as much as vice-versa. 2013 is bringing its own challenges, but overwhelmingly the conclusion in this study is that the UK corporate governance model is still the clear favourite choice of most global firms and this, in no small measure, is down to the quality of its chairmen and NEDs.
Some key points are:
- 82% of NEDs did not have a pay increase last year (2012) and 84% do not expect one this year.
- Shares & options form an important part of remuneration for a small % of chairmen & NEDs in the UK; but more than 50% of NEDs in the US
- Increasingly, NEDs think the existing executive reward model is broken (too short term, not enough equity & too much reward for failure).
- NEDs’’ rank their most important role as Strategy, with the main NED contribution being to challenge & help to develop strategy proposals
The 3 Graces is most grateful to Directorbank Group for permission to share the whole report, which can be downloaded by clicking on the link here:
In mid-2012, KPMG and Directorbank commissioned independent research consultancy Private Equity Research Limited to undertake a comprehensive survey of more than 300 non-executive directors and senior management who had experience of working with private equity firms.
The purpose was to look in depth at how private equity executives interact with their portfolio companies and reveal the strengths of the private equity approach, as well as the weaknesses.
The aim in carrying out this research is to contribute to the development of best practice in this key area, through increasing our private equity clients’ understanding of the issues that arise when working with senior management and the board.
The research reveals that private equity directors are generally highly regarded for their deal-making and financing skills. However, according to participants in the survey, their effectiveness when interacting with portfolio companies is more variable. The most effective make a real effort to build a relationship of trust with management and actively use their skills, knowledge and network of contacts. The least effective are perceived to add limited value beyond providing capital.
The whole report can be found by following the link below. The 3 Graces is most grateful to Directorbank for permission to use the work.
In 1776, Adam Smith published his ‘Wealth of Nations’, arguing that commerce and production were the source of wealth. Government began to seem like an obstruction and a largely unnecessary cost. Its beneficial role was limited, said Smith, to enforcing contracts and protecting property.
The school of laissez-faire economics maintained that government was a ‘necessary evil’, to be restrained as much as possible. The “government that governs best”, as Jefferson put it, “is the one that governs least”. This is, of course, another way of saying that government – like every other natural phenomenon – is subject to the law of declining marginal utility. A little government is probably a good thing. The energy put into a system of public order, dispute resolution, and certain minimal public services may give a positive return on investment. But the point of diminishing returns is reached quickly. For reference, the table below is the ‘take’ by modern governments today:Read More»