Directors Information

Directors' information serves many purposes-the most important of which is gaining an understanding of a company. The board of directors reflect the character of a company.

A director on the board of a company performs important duties such as determining the strategic direction, hiring senior managers, monitoring the performance, serving as the public face and interacting with shareholders. An executive director such as a chief executive is directly involved in the affairs of a company while a non-executive director or an independent director provides guidance on a regular basis.

The composition of a board, a basic part of directors' information, provides an understanding of the company. In the past, most companies paid little attention to the composition of their boards. Most boards were packed with associates of the owner or senior officers. The rising incidence of accounting scandals and the resultant public outcry are forcing companies to induct more independent directors on to their boards.

Director information shows that good companies have diversified boards that include several independent directors, who besides providing guidance, have little patience for corporate shenanigans. In short, independent directors serve as the conscience keepers of a company. They are not afraid to sound an alarm if the company drifts away from its goal or indulges in accounting tricks.

The number of non-executive directors on the board will reveal if a company is serious about corporate governance. The non-executive directors' information such as age, current designation and work experience if correlated with the company's core business will yield important insights into the governance of a company. Good corporations pick non-executive directors on the basis of the value that they can add to their business.

The executive directors' information will also help in understanding a company. For one, the list of executive directors on the board will reveal the key officers in the corporation. In addition, the executive directors' information will also reveal if a company has a succession plan in place. Some of the executive directors figure on the board not only because they are good at their job, but also because they have the potential to lead the organisation at some stage. Star performers in the senior management are inducted on to the board to provide them with boardroom exposure.

The directors' information will also provide insights into the character of senior officers. According to the Directors Remuneration Report Regulations 2002, companies are required to provide remuneration details of directors. The remuneration of the executive directors correlated with the performance of the company and the industry-average remuneration will help in forming value judgements about senior officers.

The directors' information is also used extensively by executive search firms. The executive search firms track the board of directors of all major companies on a regular basis to identify potential recruits. If an executive search firm is hired to find a chief executive for a company, the first place it will look at is the board of its client's rivals, which can found in directors' information.

The directors' information is also useful in avoiding individuals, who are disqualified under the Company Directors Disqualification Act 1986 for a specified period. Companies House maintains a Register of Disqualified Directors. Both Companies House and the Insolvency Service provide an online disqualified directors search facility. The online Individual Insolvency Register of the Insolvency Service, meanwhile, helps in ascertaining if a potential director is bankrupt or not. Although directors' information serves many purposes, the most important one remains the weeding out of bad ones.