Non Executive Life in the Boardroom

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:

Directorbank 2013-Life-in-the-Boardroom-Survey

 

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