Due diligence questions to help a prospective director assess a company
The Institute of Chartered Secretaries and Administrators (ICSA) has today published an updated version of its guidance note titled “Joining the right board – due diligence for prospective directors”. The updated guidance note can be downloaded at the ICSA website here.
The ICSA press release issued along with the guidance note says:
“Key recommendations in the note published today include:
- Having pre-appointment meetings with a number of board members and the company secretary as well as certain external advisers, especially if the individual is taking on the role of the chairman of the company or chair of the audit or remuneration committee
- Discussing with the board the outcome of the last board evaluation process, and the plans to tackle any areas which were considered to be in need of development.
One of the most useful aspects of the guidance note is the set of due diligence questions which prospective directors can draw on to help them assess the company in a number of areas. There is an increased focus on governance, the operation and behaviour of the board and the role of a non-executive director.”
ICSA states that this updated guidance note is one of a series to be published over the next few months. ICSA also drafted the recent Financial Reporting Council “Guidance on Board Effectiveness”, which we covered in this post.
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