An investigation into the role, effectiveness and future of non-executive directors

Abstract

Non-executive directors are faced with increasing expectations of their role; this paper investigates both their role and their effectiveness and determines that there is universal support for the continuation of non-executive directors. The role is confirmed as that described by Cadbury and Hampel with recognition that corporate governance practices can never result in a ‘no failure’ environment. Independence is assessed as a key characteristic and changes needed to secure the future of the non-executive director are examined. The research identifies over-burdensome legislation and personal liability as key concerns and concludes that the UK should continue with a policy of best practice guidelines rather than legal prescription.