In the boardroom: user’s guide for non-executive directors in regulated entities
After two years as a non-executive director in a regulated entity, and a 25-year career in financial services, Tony McPoland offers a user’s guide.
Reputation is key. Your reputation is critical and you should not join any board where you do not think the proper controls, processes and procedures are in place. Do your due diligence before you join a board to make sure you share the same culture.
Use networks to keep informed. The major accounting, consulting and law firms (as well as the IoD) all have non-executive director networks and hold regular seminars on current regulatory, reporting and legal topics of concern to non-executive directors. These represent an invaluable source of up to date information.
Insure yourself. The IoD arranges personal directors and officers insurance through Glennons and AIG. My advice is to make this policy your priority each year as it protects you.
Be prepared. Ensure board packs are dispatched to you at least a couple of days in advance of the board meeting to allow you to review the papers, ask for clarification of any issues and be properly prepared for the meeting.
Use your expertise and experience. As a chartered accountant with responsibility for finance and operations during my executive career I find that I can apply my expertise to each non-executive director role. Experience will also help to ensure decisions are taken, timelines are agreed and the people responsible for taking actions are identified.
Use the Central Bank website. The Central Bank publishes information on thematic examinations and enforcement actions. Both these should form part of regular board discussions and help ensure that the company is keeping up to date with best practice in the sector.
Do not take on too many roles. In banking there is a strict limit on the number of other directorships an individual can hold. There is a higher limit for fund directorships but ensure you have sufficient capacity to effectively exercise your onerous role as a non-executive director.
Tony McPoland is a non-executive director of a number of regulated companies. He is also chairman of the board of Platinum World Funds. He is a member of the IoD.