Effectiveness of Non-Executive Directors Essay -- Senior Management, N

The metier of non-executive directors is becoming to be seen as critical for the contribution to the military strength of corporate governance in providing investor protection.Relevant situational and sectoral experience enhances the effectiveness of non-executive directors. Jebb (1998) cited in Ahwireng-Obeng, Mariano and Viedge (2005) suggests that it is a better strategy to hire non-executive directors who have experience in similar as well as other sectors and situations that the company is promising to face than search for a particular expertise in a director. According to Pincombe (2000), this enables the utilisation of specialist skills in different fields and the broadening of experience (Ahwireng-Obeng, Mariano and Viedge, 2005).To a certain extent, the tenure of service also has intrusion on the effectiveness of non-executive directors. Feldman (1992) is of the view that a board that services a business well today may not be drug-addicted to lead it five years from no w as markets and products evolve. Therefore, the appointments of non-executive directors should be for a specific term and modernistic elements should be appointed as and when needed. virtuoso suggestion is that by serving for more than ten years, the board member tends to become in like manner close to senior management to provide documental oversight (Ahwireng-Obeng, Mariano and Viedge, 2005). However, this could provide the in-depth knowledge and institutional memory that a new board member has to work hard to acquire (Fleming, 1998 cited in Ahwireng-Obeng, Mariano and Viedge, 2005).As for the selection and appointment, good boards do not just happen they are carefully constructed working teams (Vennat, 1995). In other words, it is by selecting and developing enamor indiv... ...m their duties, particularly those sitting on the Nominations mission, Remuneration Committee and Audit Committee on an irregular basis, meeting only a few propagation a year (Pass, 2008). Due to limited time of involvement, non-executive directors could be too remote from internal decision-making processes to make an effective contribution and lack of information. The effectiveness of non-executive directors would be undermining when they are uninformed about the challenges they face. Hurley (2000) cited in Ahwireng-Obeng, Mariano and Viedge (2005) suggests that making the avocation list of information available to non-executive directors can contribute to their focus and productiveness board policies, committee guidelines, board minutes, authority annotations, contract summaries, organisational charts, member surveys and analyses, and plan or project analyses.