We welcome the limitation on mandates, which reinforces our business model
The question of the maximum number of mandates one person may receive has been debated for quite some time now. Initial indications from the regulator were that the limit could be set at 12. It is good that a significantly higher level (20) was eventually agreed.
It is even better news that the regulator did explicitly codify the principle of proportionality with respect to mandates. This goes in both directions: downwards if mandates are particularly complex and require a considerable commitment from the director in question; upwards if economies of scale can be achieved by pooling support resources and expertise.
Creating synergies by attracting experts in their fields is in the best interests of clients, as explained by our chief executive officer Eric Chinchon in this video: https://www.mebs.lu/videos.
Independent directors bring more to boardrooms
Independence in governance adds value to board meetings and organisations in several ways:
- Independent directors offer unbiased views as they are not tied to any particular stakeholder or service provider, as our chairman Michael Lange explains here: https://www.mebs.lu/videos
- As they are exposed to a wide variety of organisations, corporate cultures and operational structures, independent directors provide boardrooms with insights into best practice in the field of operational efficiency.
- Independent directors offer experience as well as knowledge and have a duty to continually share these with their peers.
- Independent directors are in a position to challenge the decision-making process in a positive way.
- Independent directors bring their own networks of specialists, suppliers and clients.
Independent directors allow boards to focus on their core roles
Bringing technical expertise to boardrooms helps boards focus on their core roles: defining strategy and monitoring its implementation and determining the remuneration of top executives.
Grouping experts and sharing knowledge and experience obviously allows for greater efficiency when reading or analysing regulatory texts and provisions. Also, best practice in one particular area may be transferred into another area. We create synergies that benefit everyone.
A prime example of this is the fact that we have developed a proprietary tool to identify potential conflicts of interest. We have shared this tool with our clients and also applied it to ourselves.
In large-scale international organisations, independent governance adds local expertise in business practice to local market knowledge.
Emmanuel Begat, Partner & COO (ME Business Solutions)
Someone to say ‘NO’
Independent governance is a necessity in many organisations. Start-ups, which often have a mere handful of initial shareholders – founder(s), family and friends – pose particular challenges of their own. These include the pre-eminence of founder(s) with no real counterweight, and the higher level of personal involvement required from independent director(s) due to limited internal resources.
In large-scale international organisations, independent governance adds local expertise in business practice to local market knowledge. A professional will also ask the right questions at the right time (see: https://docs.wixstatic.com/ugd/6eab5e_90740bdecf4a4027827b1d418d30a94f.pdf).
Overall, in most cases, independence is a necessity. This is why we have an independent director sitting on our board.