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Jackson Taylor in the Financial Times on 25 January 2003 wrote:
“The direction of businesses has for far too long been a clubbable relationship between the Chairman and “old boy” co-opted Non-Executive Directors. As the Sunday Times once put it: “The average Non-Executive Director is scarcely more than a tame pensioner, sometimes a lap-dog, contributing to the atmosphere of complaisance and non-enquiry characteristic of many boardrooms.”
It is essential that modern Non-Executive Directors be financially independent so that they may aggressively challenge boardroom decisions. Nominated Directors from financial institutions cannot be considered independent, nor do they represent shareholders as a whole.
The problem facing many Non-Executive Directors is that they do not have at their disposal a detailed operational knowledge of the business. However, this is not important since their prime role is that of a strategist rather than a tactician.
The so-called “cosy” auditor relationships must end. So many annual reports are often deliberately designed to be obverse and conceal the actual status of the business. Directors must be held accountable, as must the auditors, if they co-operate in this regard. An annual report must be a document of clarity.”
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