Why Directors Are Accountable To Their Shareholders.Non-executive directors govern the company on behalf of shareholders by whom they are elected. Whilst non-executive directors are not appointed for a specified term, all directors are subject to re-election by shareholders following appointment and subsequently at intervals of not more than three years. Executive
On the whole, non-executive directors are the custodians of the governance process. Performance: Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitoring, and where necessary removing, senior management and in succession planning. They are differentiated from inside directors, who are members of the board also serving as executive managers of the company (most often as corporate officers). The number of Non-Executive Directors is increasing, and generally companies have a ratio of one independent director to every executive director, irrespective of turnover. A non-executive director can add value to a board by:Bringing an independent and fresh perspective to decision-making Demonstrating relevant competency, experience, legitimacy and ethical behaviour Challenging, questioning and monitoring the CEO and senior management when appropriate Supporting and mentoring the CEO. It should be noted that having a majority of non-executive directors is no guarantee against corporate failure, as recent corporate collapses have demonstrated. Independent If the chair of the Board is to be an independent director, the question arises how the chair should be elected or appointed. All directors have written contracts and in the case of non-executive directors these specify those corporate matters that are reserved for decision by the full Board, together with the rights of individual directors to seek independent professional advice and services paid for by the Company. Remuneration Details of policy and directors remuneration, including share options and contract terms, are set out in the Directors Remuneration Report. The non-executive directors are entitled to fees as agreed at Harmony's annual general meeting (AGM) from time to time, reimbursement of out-of-pocket expenses incurred on Harmony's behalf and remuneration for other services, such as serving on committees. The Directors and the Board as a whole consider that these factors do not impinge upon their objectivityor independence and so, all Non Executive Directors are considered to be independent from the Group and management. The Non Executive Directors have each considered their independence in light of the above interests and other businessrelationships as laid out in note 22. |