CODE OF PRACTICE
FOR BOARD REVIEWERS
We apply the 2023 Code of Practice for board reviewers published by the Chartered Governance Institute.
While the Code of Practice relates to FTSE 350 companies only, we believe all boards will benefit from the Code's provisions.
OUR COMMITMENTS UNDER THE CODE OF PRACTICE
OUR AIM AND FOCUS
Our ultimate aim is to help top leadership evolve the most fit, agile and relational ways of working, which drive creative innovation and effective stewardship in an increasingly complex and challenging business environment.
We focus on specific desired outcomes agreed at the outset, making practical and deliverable progress through and after the evaluation.
While we will report to clients on how their board meets general best practice expectations appropriate to their governance framework, scale and complexity, it is team performance and developing readiness for future challenges that drives our work.
COMPETENCE AND CAPACITY
We will only accept an engagement where we are satisfied that we have competence and capacity to carry it out with sufficient skill and care.
Our evaluators are skilled and experienced. They are drawn from disciplines that encompass board and organisational governance, human performance and dynamics.
INDEPENDENCE AND INTEGRITY
We undertake to act impartially and with integrity throughout all our evaluations. This imposes on us an obligation to ‘speak truth to power’ should that be necessary.
Prior to any engagement, we carry out due enquiries to ensure that there are no actual or potential conflicts of interest , nor any other circumstances that we believe may impair our independent judgement.
In the event that a client requests us to carry out further training or consulting work that is not directly related or consequential to an evaluation, we assess the value of this work against the value of the evaluation (typically measured in fees). If the value of any such additional work undertaken exceeds 70% of the value of the evaluation, we will consider excluding ourselves from leading any future evaluations for that board. We also maintain a blacklist of prohibited services we cannot carry out, such as playing any part in the management of a client.
We will follow the principles and supporting guidance of the client's chosen governance code, which is usually either the UK Corporate Governance Code, the QCA Corporate Governance Code or the Charity Governance Code.
Our engagement letters provide clear terms for our engagement and agree a clear scope of work. We are also required to maintain confidentiality. The Code of Practice recommends that a full review should cover the areas listed below. Our full external evaluations will include the areas listed below, plus other areas we believe have a material bearing on board performance.
assess the degree to which the board and its directors display rigorous thought processes leading to breadth, depth and independence of thinking, in addition to attributes such as skill, experience, knowledge, diversity and capability;
assess the behavioural dynamics of the board and its members;
conduct deep-dive observations and reviews across the board and its committees;
assess the contribution of the chair and of individual directors;
assess wider succession issues, such as those of the senior executive team, as well as the board itself;
analyse the effectiveness of the board’s decision-making processes, for example by reviewing specific decisions which are/were critical to the success of the business;
review board and committee documentation, such as the list of matters reserved for the board, terms of reference for board committees, and a sample of board and committee papers;
solicit and understand external stakeholder perspectives on the board’s performance, as appropriate;
advise the board on how to address the issues identified by the review; and
provide and present a full report and recommended actions to the board.
Our engagement letters require us to review and agree any details clients disclose about a board evaluation, made either publicly or to a regulator. This includes any description of the process followed and any statement that purports to represent our opinions.
REVIEW AND EXPLAIN
At the beginning of each calendar year, we will review how we have applied the Code of Practice, and we will explain below how we have delivered on our commitments.
In 2022, we are pleased to confirm that we applied the Code of Practice in full.
When pitching for new evaluations, and before all engagements, we carried out checks of our competence, capacity, independence and integrity in accordance with the Code of Practice, and confirmed the position to each client Throughout the course of our engagements, we monitored each area to ensure we continued to meet our obligations. We gave particular attention to our ongoing independence. During an evaluation, because we build strong , trusting relationships with our clients (particularly with chairs and SIDs), we must continually watch our readiness to deliver hard and unpalatable messages. We are pleased that we did so during the period under review.
The engagement letters we agreed with our clients were clear in their terms and scope of work, and they exceeded the requirements of the Code of Practice. Occasionally, the scope of work evolved during the course of an evaluation. Where this occurred, it was agreed at the time with the relevant client and positively affected the quality of the evaluation.
During 2022, we had no concerns about client disclosures.
HOW WE HAVE APPLIED THE CODE
As 2022 will be our first full year of applying the Code of Practice,
we will explain in January 2023 how we have delivered on our commitments.