The
head of the Institute of Directors has called for non-executive directorships
to be scrapped.
Lord
Young told the Institute’s convention in London that allowing part-timers to
police boardrooms was naive.
He
said government attempts to regulate non-executives were dangerous, and that
investors needed to hold management directly accountable.
"The
idea has come about that in some manner non-executives can second guess the
executives. Of course they can’t. If management is not too forthcoming, they
can never even know, until it is far too late."
Belinda
Hudson, European Partner in the field of executive remuneration/corporate
governance at Mercer Human Resource Consulting, disagreed.
"Lord
Young’s comments about non-executive directors are wide of the mark," she
said. Among our clients, we have seen just how effective many non-executives
can be – the good ones. They are there to ensure executives create value for
shareholders, and do not need to second-guess the executives’ implementation of
strategy in doing so.
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"We
do recognise, however, there is a shortage of effective, suitably-qualified
non-executives, and have also concerns that some of them do stretch themselves
too thinly."
