9 July 2012 Press Release: “The Institute of Chartered Secretaries (ICSA) has today published an updated version of its guidance note on the induction of directors. The revised guidance is designed to advise organisations on the topics and documents they should consider when designing an induction programme for newly appointed directors.
ICSA is currently updating its suite of guidance notes which were previously appended to the Higgs guidance. The Financial Reporting Council’s ‘Guidance on Board Effectiveness’, which replaced the Higgs guidance, was drafted by ICSA with the help of a Steering Group.
The Higgs Suggestions for Good Practice’ published in 2003 stated that the induction process should aim to achieve three things and these remain relevant today:
a) Build an understanding of the nature of the company, its business and the markets in which it operates
b) Build a link with the company’s people
c) Build an understanding of the company’s main relationships
This note draws out two further elements: ensuring an understanding of (i) the role of the director and (ii) the framework within which the board operates. Particular attention is paid to the way the induction programme is designed because the way in which it is delivered is considered to be essential to its success.
Seamus Gillen, ICSA’s Director of Policy, said:
‘The publication of this guidance note is timely, given the continuing demands – not least from the regulators, the FSA and the FRC – for directors to carry out due diligence to ensure their boards function properly. Directors who are fully prepared to carry out their role are more likely to make good decisions and maximise the opportunities for the company’s success in the long term.’ “’
The guidance note can be downloaded here:
Guidance on Induction of Directors
A link to the FRC's final Guidance on Board Effectiveness can be found here.