The Board is collectively responsible for an issuer’s management, operations and decisions. All directors (executive directors (EDs), non-executive directors (NEDs) and independent non-executive directors (INEDs)) are subject to the same duties under the law and the Rules.

Directors must in accordance with their duties set out in Listing Rule 3.08:

• Act honestly and in good faith in the interests of the company as a whole.
• Act for proper purpose.
• Be answerable to the issuer for the application or misapplication of its assets.
• Avoid actual and potential conflicts of interest and duty.
• Disclose fully and fairly his interests in contracts with the issuer.
• Apply such degree of skill, care and diligence as may reasonably be expected of a person of his knowledge and experience and holding his office within the issuer.

The Board’s Chairman has to set clear expectations concerning the style and tone of Board discussions, ensuring the Board has effective decision-making processes. The chairman should ensure all directors are aware of their responsibilities, and hold periodic meetings with the NEDs and INEDs to facilitate a full and frank airing of views.

EDs are involved in the day-to-day operations of an issuer’s business and have the same duties as other members of the Board. These duties extend to the whole of the business and not just the part covered by their individual executive roles.

EDs should ensure that the management is accountable to the Board and, ultimately, to the shareholders. EDs should demonstrate willingness to listen to and work closely with NEDs and INEDs.

Non-executive directors such as NEDs and INEDs have the same duties of care and skill and fiduciary duties as executive directors. In addition, they fulfil important roles on the Board including:

• Participating in Board meetings to bring an independent judgement to bear on issues of strategy, policy, performance, accountability, resources, key appointments and standards of conduct.
• Taking the lead where potential conflicts of interests arise.
• Supervising risk management and internal controls.
• Serving on the audit, remuneration, nomination and other governance committees (if invited).
• Scrutinising the issuer’s performance in achieving agreed corporate goals and objectives, and monitoring performance reporting.

To learn more about the important role INEDs play in issuers.