Board Composition and Sucession Planning

Question 1

Board size: How big should the Board of Directors be?

Answer 1

The UK Corporate Governance Code (2018) makes no recommendation on the size of the Board of Directors. It depends on the size of the company, the complexity of the business and the industry or sector in which it operates. Unless a company’s Articles of Association specifies the min/max. number of Directors, it is left to the Board to decide how big it should be.

Question 2

Board size: What should the Board consider in determining the size of its Board?

Answer 2

1. B = The requirements for a Balanced board;
2. U = The requirements of the UK Code on the composition of the board;
3. S = The need to Service board committees; and
4. A = The Ability of the board to hold productive, constructive discussions and make prompt rational decisions.

Question 3

What are the requirements for a ‘balanced’ board?

Answer 3

1. Separation of the roles of Chair and CEO;
2. An appropriate balance of executive, non-executive and independent directors;
3. Appropriate skills, experience and knowledge (e.g. referring to a skills matrix);
4. Gender balance; and
5. Diversity (including social and ethnic backgrounds, cognitive and personal strengths).