Objective Board Representation

Objective Board Representation is when a member of the board of directors of a company who does not form part of the executive management team. They are not employees of the company or affiliated with it in any other way and are differentiated from inside directors, who are members of the board who also serve or previously served as executive managers of the company (most often as corporate officers).

Objective Board Representatives are sometimes considered the same as an independent or non-executive director, while other sources distinguish them from independent directors saying non-executive directors are allowed to hold shares in the company while independent directors are not.

According to the Higgs Report published by the British government in 2003: Objective Board Representatives have responsibilities in the following areas: 

• Strategy: Objective Board Representatives should constructively challenge and contribute to the development of strategy.

• Performance: Objective Board Representatives should scrutinise the performance of management in meeting agreed goals and objectives and monitoring and where necessary removing senior management, and in succession planning.

• Risk: Objective Board Representatives should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible.

• People: Objective Board Representatives are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing and where necessary removing senior management, and in succession planning.

Objective Board Representatives should also provide independent views on:

• Resources
• Appointments
• Standards of conduct

Objective Board Representatives are the custodians of the governance process. They are not involved in the day-to-day running of business but monitor the executive activity and contribute to the development of strategy.

Karl has worked effectively as an independent and objective voice on many boards that have required significant shifts in strategic thinking to deliver higher levels of business performance.

If you would like to inquire about the value that having an objective and independent view represented on your Board of Directors please click here