Non-executive director(s) (NEDs) meaning

Quoted companies (other than investment companies) This checklist sets out the UK Corporate Governance Code expectations on the composition of quoted company boards, together with best-practice guidance from leading institutional investor representative bodies. It also draws on guidance from the Quoted Companies Alliance for small and mid-size quoted companies, and from the Association of Investment Companies for investment companies. UK Listing Rules Companies listed in the equity shares (commercial companies) category should confirm in their annual report, on a ‘comply or explain’ basis and by reference to a chosen date within the accounting period, whether they meet the following board diversity targets on gender and ethnicity: a minimum of 40% of the board should be women at least one senior role—chair, CEO, senior independent director (SID) or CFO—should be held by a woman at least one director should be from a minority ethnic background Reference: UKLR 6.6.6. 2018 UKCG Code No less than half of the board,...

Meaning of ‘non-executive director’ The broad definition of ‘director’ is not closed. Under the Companies Act 2006 (CA 2006), a director is any person who occupies the office of director, whatever title they hold. Accordingly, this covers both executive and non-executive directors (NEDs). Executive directors are typically authorised, either by the company’s constitution or by authority delegated from the board, to manage the company’s day-to-day affairs, and they usually have a full-time service contract. NEDs generally: have no executive powers play a pivotal role in the company’s corporate governance are not employees of the company There are a number of challenges around granting shares to NEDs. This Practice Note considers the issues to assess when offering shares or share-based remuneration to NEDs, including: the potential impact on the NED’s independence the share dealing provisions of Assimilated Regulation (EU) 596/2014 for the UK, and the Market Abuse Regulation (Regulation (EU) 596/2014) previously and for the EU ...

This Practice Note outlines links to principal precedents in Lexis+UK Employment Practical Guidance, covering employment contracts, executive service agreements, and additional appointments, such as non-executive positions. Offer of employment See: Letter—offer letter for an employee Employment contracts See: Employment contract—basic version Employment contract for senior...

This Practice Note reviews best practice guidance on relations and engagement between listed companies and their shareholders. It provides coverage and interpretation of the UK Corporate Governance Code (UKCG Code), overseen and maintained by the Financial Reporting Council (FRC), together with: the FRC’s Stewardship Code the FRC’s 2018 Guidance on Board Effectiveness the guidance on enhancing stewardship dialogue issued by the Chartered Governance Institute (CGI) the Stewardship and Voting Guidelines 2023 published by the Pensions and Lifetime Savings Association (PLSA) the Shareholder Voting Guidelines (available to purchase from PIRC website) (PIRC Guidelines) issued by Pensions & Investment Research Consultants Ltd (PIRC) the 2024 Benchmark Policy Guidelines published by Glass Lewis This Practice Note also assesses the particular role each of the Chair, the senior independent director (SID) and the non-executive directors (NEDs) should play in shareholder relations and engagement. It additionally considers guidance for the convening and conduct of general meetings (including the AGM), electronic communications and the annual...

The general definition of ‘director’ is not exhaustive. Under the Companies Act 2006 (CA 2006), the term ‘director’ covers any person who holds the office of director, whatever title they go by. As a result, it spans both executive directors and non-executive directors (NEDs)...