The One-Tier Board (IVOR nr. 85) 2012/3.5.1:3.5.1 Introduction on role of board members

The One-Tier Board (IVOR nr. 85) 2012/3.5.1

3.5.1 Introduction on role of board members

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

As described above at 2.4.1, 2.5.1 and 3.4.1, boards of companies in each of the three countries, which are subject of this study, must develop, implement and monitor all the elements: purpose, strategy, policies, risk management, succession, evaluation and communication. The question is how should these roles be divided. Which board member should have which role? And how can these roles best be promoted?

Main differences in the division of roles between a one-tier board in the US and the average two-tier board in the Netherlands are that in the US independent directors have on-site and operational information, receive more and earlier information and are more involved with the company than Dutch supervisory directors. This is because US directors are or can be directly involved in making the decisions and are actively involved in challenging the strategy developed by management and discussing alternatives, whereas Dutch supervisory directors merely say "yes" or "no" to the management's proposals. This is a slightly different nuance from the position in the UK, where NEDs are involved in developing strategy but not in hands on management. By contrast, the role of Dutch supervisory directors in most companies and according to the law is confined to monitoring strategy development.1

There are also similarities between US independent directors and Dutch supervisory directors. Neither represent the company. Only the officers (in the US) and managing directors (in the Netherlands) can represent the company.

In this section 3.5 the role of US board members, the officers and the independent directors will be discussed under the following headings: first, the defmition of the roles of the board and its members (3.5.2); the active role of challenging and debating strategy by independent directors (3.5.3); a description of US Enterprise Risk Management (3.5.4); a description of the discussion in the US about non-CEO chairmen and what roles the non-CEO chairman has and, in the altemative, the lead director (3.5.5); a description of elements of best practice, early and on-site information, time commitment, evaluation and continuing education, team work, payment and committees (3.5.6); CEO succession (3.5.7); and a comment on US corporate governance at banks (3.5.8). The section will be closed by a summary on the role of US board members (3.5.9).

Deze functie is alleen te gebruiken als je bent ingelogd.