Non-executive directors of companies can and often do add real value to businesses. They are there to give an independent perspective, using their particular skills, experience, and knowledge. They have a prime role in appointing (and removing) board members. They must also operate within a framework of prudent and effective controls, which enable risks to be assessed and managed.
That is the theory. What of the practice?
Events at the Cooperative Bank may yet be another example of what can go horribly wrong for Board Members. We are told that the regulator approved the appointment of Paul Flowers as Chairman, despite his limited banking experience. But what did the non-executive directors think? What due diligence was done and what discussions took place? Or was the appointment rubber-stamped because of the regulator’s approval?