What makes a good Non-Executive Director?


Ability to take the wider perspective.



Contacts and network across the industry.



Understanding of the importance of Corporate Governance.



Ability to work with a diverse group of individuals, and to persuade them towards your view.

Comments

Post a Comment

Popular posts from this blog

Why Standard Deviation is important to businesses, and what it means

Image
Standard Deviation (SD) is often mentioned in the financial press with regards to stock returns and valuations, and also internally at companies when talking about risk and the quality of products. It is therefore an important concept for Executives to understand; but what is it? In essence, SD is a measure of how spread out a group of values are - it is a standard way of knowing what is a small spread and what is a large spread. Why is this important? If you want to know how typical the current valuation of a company is, how risky a new product or business line can be, or how accurate your manufacturing machines are, then these can all be measured with SD. Conversely, it also gives you a measure to use when looking to reduce the risk of your business or increase the accuracy of your machines. For example, if something is normally distributed (many things are - eg most machine errors, people's heights, often stock returns, etc…), then we can say that a value (eg measurement, busin...
Read more

ESG - What matters to investors?

For investors, the main benefits from ESG are to; 1) maximise risk-adjusted returns, 2) lower funding costs (eg lower beta), and 3) attract new sources of capital. Their main challenges are 1) confusing terminology, and 2) unclear expectations. There are three main ways that investors use ESG while investing: 1) Exclusion (eg exclude stocks), 2) Integration (include stocks), and 3) Impact (green investments for projects): Exclusion = Excluding companies or industries from portfolios where they are not aligned with an investors values. Integration = Integrating ESG factors into traditional investment processes to improve portfolio risk/return. Impact Investing = Investing with the intention to generate measurable environmental and social impact alongside a financial return. In terms of including ESG metrics in their models, analysts often think about issues such as: 1) Stranded assets; 2) onerous contracts; 3) potential fines/litigatio...
Read more