An article by Dina Medland for The Financial Times
External evaluation of board strength has become a lucrative business, with many participants and growing concerns about standards.
To address these, a proposed code of practice was launched last week, along with a framework enabling companies and boardroom advisers to work more effectively together.
Helen Pitcher, board effectiveness consultant and chairman of Advanced Boardroom Excellence, a new firm behind the launch, says
“The market suffers a lack of clarity as to what chairmen and company secretaries can expect from a board evaluation. Many chairmen also lack information on who the key players are, or they have had variable experience of evaluations and are unclear as to what represents value, with fees ranging from £20,000 to £250,000 in some instances”
Key features of the proposed code from AB Excellence would include advisers not pursuing more than two consecutive assignments in order to remain independent, clarity on conflicts of interest, safeguards against potential insider trading, the creation of an independent oversight body and an overall emphasis on communication between the client and adviser at all stages of the process.