"Updated ICSA guidance seeks to supply directors with information to become as effective as possible in their role"
ICSA has updated its guidance on the induction of directors. The guidance was previously appended to the Higgs Suggestion for Good Practice published in 2003, which has now been replaced by the Financial Reporting Council's ("FRC") Guidance on Board Effectiveness. The FRC's Guidance in turn supports the UK Corporate Governance Code 2010 which applies to all premium listed companies and states that all directors should receive induction on joining the Board, and that the chairman is responsible for ensuring this is delivered.
The new guidance reaffirms the three aims of the Higgs guidance which remain relevant today, namely building:
- an understanding of the nature of the company, its business and the markets in which it operates
- a link with the company's people
- an understanding of the company's main relationships
The objective is to supply the director with information needed 'to become as effective as possible in their role within the shortest practicable time.' The ICSA updated guidance draws out two further elements, ensuring an understanding of:
- the role of a director
- the framework within which the board operates
The guidance note provides a checklist of documents and topics to consider covering in an induction programme, in addition to suggestions for programme design.