How not to be a non-exec — Newcastle International Airport v Eversheds
In Gateley’s last post, Frank Lewis explained the qualities and attributes of a good company chair and non-executive. Sadly not everyone manages to live up to these standards and the consequences for both the company and individual concerned can be significant — as vividly demonstrated in a case last year.
The case involved amendments to the service contracts of two executive directors of Newcastle Airport, in particular the addition of provisions entitling them to bonuses on a refinancing. Although the company had a remuneration committee made up of its five non-executive directors, the solicitors engaged to carry out the necessary work took their instructions from the executives themselves on the basis that the chair of the remuneration committee had authorised them to instruct the solicitors.
The final drafts of the amended contracts were sent to the chair for review, although it was not clear on the face of those documents exactly what amendments had in fact been made. The chair said she reviewed the contracts and signed them on the basis that they were in accordance with the principles agreed by the remuneration committee…
Click on the link below to read the rest of the Gateley briefing.
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