Corporate secretaries or general counsels are more often than not the facilitators of monitoring director independence and conflicts of interest.
Corporate secretaries or general counsels are more often than not the facilitators of monitoring director independence and conflicts of interest.
Equally, they frequently play a key role in managing current peer and competitor lists and, as a consequence, can assist the board to navigate the complex landscape. Maximizing all resources at the board’s disposal for scanning competitors, not only for strategic intelligence but also for considering boardroom independence, is key to identifying potential conflicts before they arise.
Questions for the board to consider
- What are the methods and how frequently are board members assessing their own status in terms of conflicts of interest and independence, and is their analysis sufficiently detailed and evidenced?
- Who is conducting an analysis of the competitive landscape to monitor the organizations’ movements across sectors and how often? Does the board challenge the analysis to ensure it is accurate and complete?
- Are board members keeping up-to-date with their organizations’ related policies and utilizing the tools available to ensure they are sufficiently aware of their director duties and responsibilities in relation to disclosing potential conflicts of interest? If not, how will this be remedied?
- How proactively does the board engage with their corporate secretary or general counsel and how effective is the engagement?
Summary
In today’s constantly changing landscape, board directors must be diligent in assessing and declaring their conflicts of interest while maintaining their independence.
