Now I’m going to take a wild guess here, that the least favourite part of a typical NED role is setting executive remuneration. To the media, and now even the government, it appears that NEDs love nothing more than awarding large pay increases, bonuses and pay-offs to executives. It often seems that investors share this … Continue reading What’s your favourite part of being a non-executive director?
People are only human. Occasionally they fall in love with other people. Ideally, the 'other person' works elsewhere, but sometimes the two work together. Many executives will have come across co-workers, who are in a relationship. This knowledge can vary from being a matter of mild interest to one of real discomfort. I had a … Continue reading Someone getting emotional?
A series of articles looking at practical issues and problems that arise on boards. Becoming a non-executive director What you need to know for your first NED interviewHow to choose your first NED roleHow to assess your NED Offer LetterUsing the annual report for your due diligence (the Carillion example) Learning to be a non-executive … Continue reading Notes from a non-executive director
The company was in financial difficulties, as changing market conditions had seriously exposed the misplaced strategy. There was however no suggestion that anything improper had gone on. The external auditors were high quality, and there was a competent internal audit team with appropriate risk models. Yet something didn’t feel right. Whilst the strategy had failings, … Continue reading Is management telling the whole story?
In previous articles, I covered how a board should react to an unsolicited approach or offer for the company, how it would value it, valuing shares versus cash offers, whether it’s friendly, unfriendly or hostile, and irrevocable commitments. Here, I am going to look at the different sorts of offers that you might receive … Continue reading Just say ‘No’ – assessing an offer for your company
My earlier article talked about how a board should respond to an unsolicited approach for the company. This looked at a straight-forward offer that the board has to review and accept or reject. However it’s not always so easy, as much depends on the attitude and tactics of the offeror. The chairman of one of … Continue reading An unsolicited approach: Let battle commence
I was having a good day, sitting in my office sorting a few things out. Then, late afternoon, the phone rang. It was the Chairman of one of our competitors. I hadn’t spoken to him before, but this was no comfort, as he revealed that they were about to make an offer for my company. … Continue reading What if you get an unsolicited approach for the company?
The board is contemplating an equity raise. The brokers and CFO talk in respectful terms about preserving pre-emption rights and what this means for how they raise the new capital. Maybe you, as a new non-exec, are sitting there wondering what is this all about and why is it so important? However all directors should … Continue reading What are pre-emption rights and why do they matter?
Companies differ very much in their attitude to the importance of cash. If a business is private equity owned, highly geared (ie has a lot of debt) or has not a lot of headroom against its overdraft or debt covenants, it is likely to be very focussed on cash. Others, especially subsidiary boards, may look … Continue reading What’s all the fuss about cash?
One mistake that non-financial people often make is to assume that financial people both know what they are talking about and understand all the financial issues. Once you realise that neither of these may be true, you will feel less cowed by financial jargon and able to participate more freely. I have twice in my … Continue reading What if you join a board, but have no financial experience?