How often do Directors assess themselves?
Directors rightly expend huge efforts on reviewing company procedures, financials, HR, management, etc but, how many Directors spend time thinking about the individual Directors of the Board?
It is trite but, true to say the more effective the Board the more effective the Company.
Individual Directors should consider how issues such as those outlined below may impact on them personally, and the Company professionally. They should ensure there are checks in place to monitor and react should such issues be triggered for any person during their tenure as Director.
o Longevity – have Directors been in place so long their thinking has become staid? Are individuals continuing to add value in their personal capacity as Director?
o Attendance – do individual Directors have a good attendance record at Board Meetings? S.148 Companies Act 2014 states that the office of director shall be vacated where “the director is for more than 6 months absent, without the permission of the directors, from meetings of the directors held during that period”.
o Number of directorships – a person may not be a director of more than 25 companies. Directors of Groups should not panic, S.142 Companies Act 2014 outlines circumstances of how a Director of a number of companies within a Group may count such directorships as one.
o New Directors – are they checked out before appointment? The Companies Act 2014 imposes various restrictions on individuals including individuals serving bankruptcy terms, disqualification or restriction. What catches people out here is that such restrictions for the most part apply regardless of jurisdiction.
Register of Disqualified / Restricted persons – average figures for disqualification are around 3,500 individuals with average figures for restriction around 940 individual Directors. The Register of Disqualified and Restricted persons in Ireland can be accessed for free on the Companies Registration Office website