The Institute of Chartered Secretaries and Administrators (ICSA) has published a guidance note on liability of non-executive directors (NEDs) in respect of care, skill and diligence. The guidance proposes ways through which NEDs can approach their work so as to allow them to demonstrate to a regulator, or in a court of law, that they had taken appropriate steps in order to exercise care, skill and diligence when executing their roles and responsibilities.

The document provides guidance to NEDs on issues to consider before joining a board, on appointment to a board, and includes relevant sections of the UK Corporate Governance Code in an appendix.

Some areas of best practice highlighted are that NEDs should:

• recognise that part of a NEDs’ role is to uphold high standards of integrity, probity, and to support the chairman and executive directors in instilling the appropriate culture, values and behaviours in the boardroom and beyond;
• ensure they make all decisions objectively in the interests of the company; and
• act in such a way so as to avoid conflicts of interest.