The company’s Board comprises a balance of executive and non-executive directors, with a majority of non-executive directors. Independent non-executive directors are at least one third of the total number of Board members. The company’s board is also of a sufficient number, which enables the requirements of the company’s business to be met. The size of the Board is not too large to undermine an interactive discussion during board meetings or too small such that the inclusion of wider expertise and skills to improve the effectiveness of the Board and the formation of its committees is compromised.
In the new Corporate Governance code, the boards directors are barred from holding similar positions in more than three publicly listed companies at a time. This is a shift from the previous position where a director was precluded from holding such a position in more than five (5) listed companies at any one time. This is to ensure effective participation by such directors in the Board. This has been reduced by one. Similarly, a chairperson of a public listed company is precluded from holding such a position in more than two public listed companies at any one time. Again, the significance of this, is to enable the individual occupants of the aforementioned offices devote sufficient time to the various boards they sit on. It is noteworthy that any executive director of a listed company shall now be restricted to one other directorship of another listed company. This requirement ought to be read in tandem with the provisions of the Companies Act, 2015 on directorships.
Another important highlight is the fact that the Code distinguishes the functions of the Chairperson and the Chief Executive Officer of a Company. The implication of this is that the functions of the Chairperson and those of the Chief Executive Officer cannot be exercised by the same individual; this is a mandatory requirement. Additionally, the boards of companies issuing any securities to members of the public will now be required to conduct a performance appraisal of all its board members, including the Chief Executive Officer and the Company Secretary. This is shift from the previous position where the board was only tasked with reporting requirements on the activities of the board in a given financial year.
The companys’ board directors also do not have any alternate directors (nominated by the substantive director but subject to vetting by the nominations committee) in the company thus runs no risk of multiple directorship. Terms of office of the board members are also organized in such a manner that they end at different times. This ensures retention of institutional memory and makes it easier to induct new Board members. At no single time does a number greater that one