Can the Non‐executive Director be an Effective Gatekeeper? The Possible Development of a Legal Framework of Accountability

Abstract

In the UK there has been a recent debate over the role of the independent non‐executive director, with that debate resulting in changes to a revised Code applicable to companies reporting after 1 November, 2003. This article reflects on an aspect of the proposed changes that was ignored, namely changes to the legal duties and liabilities of non‐executive directors. This appears to have been a missed opportunity in seeking to enhance the effectiveness of independent non‐executives and their contributions to enhancing corporate governance. This paper considers enhancing the governance role of non‐executive directors by introducing “gatekeeper liability”.