Higgs Review on the Effectiveness of Non-Executive Directors

In 2003, the UK Government commissioned Derek Higgs to write a report reviewing the role and effectiveness of non-executive directors. The report made many observations and recommendations, amongst them, that the role of the non-executive director should be outlined in The Combined Code on Corporate Governance, and also that non-execs in general should meet independently of the board at least once a year. He also addressed issues such as the recruitment of non-execs, their liability when on the board, their general responsibilities, remuneration of non-execs and even correct practice for their resignation.

In short, the report concluded that there is a positive role for non-executive directors to play in good corporate governance, but that a number of issues must be addressed for them to them to be truly effective.