science

Review of the role and effectiveness of non-executive directors

Review of the role and effectiveness of non-executive directors is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Review of the role and effectiveness of non-executive directors rather than just read about it. In short: Review of the role and effectiveness of non-executive directors (or the "Higgs review") was a report chaired by Derek Higgs on corporate governance commissioned by the UK government, published on 20 January 2003. It reviewed the role and effectiveness of non-executive directors and of the audit committee, aiming at improving and strengthening the existing Combined Code.

Key takeaways

Review of the role and effectiveness of non-executive directors belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Review of the role and effectiveness of non-executive directors to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Review of the role and effectiveness of non-executive directors from memory before moving on to harder problems.

Reference excerpt

Review of the role and effectiveness of non-executive directors (or the "Higgs review") was a report chaired by Derek Higgs on corporate governance commissioned by the UK government, published on 20 January 2003. It reviewed the role and effectiveness of non-executive directors and of the audit committee, aiming at improving and strengthening the existing Combined Code. There was widespread unrest after the scandals in the US, involving Enron, WorldCom, and Tyco. The US opted for legislation under the Sarbanes–Oxley Act. Higgs strongly backed the existing non-prescriptive approach to corporate governance: "comply or explain". Yet he advocated more provisions with more stringent criteria for the board composition and evaluation of independent directors. He wanted to remove some of the discretion that the Code allowed. Higgs viewed the earlier scandals, which led to the Cadbury Report could have been avoided had a Code been in place. The Robert Maxwell debacle could have been avoided in his view because many firms already refused to deal with him, and disclosure of his company's governance practices would have led to more pressure for change. In December 2009, the Financial Reporting Council commissioned the Institute of Chartered Secretaries and Administrators to update the Higgs guidance with the assistance of a Steering Group. In July 2010, ICSA launched draft guidance ['Improving board effectiveness'] as part of this process. The Financial Reporting Council published the final guidance in March 2011, and it is available here: http://www.frc.org.uk/getattachment/c9ce2814-2806-4bca-a179-e390ecbed841/Guidance-on-Board-Effectiveness.aspx

See also Combined Code Cadbury Report (1992) Greenbury Report (1995) Hampel Report (1998) Turnbull Report (1999) Smith Report (2003)

References

External links The Higgs report DBERR website and pdf Full text of the combined code 2006 Full text of the combined code 2003 The Financial Services Authority Listing Rules online Archived 23 February 2009 at the Wayback Machine and in pdf format Archived 23 February 2009 at the Wayback Machine, under which there is an obligation to comply with the Combined Code, or explain why it is not complied with, under LR 9.8.6(6). The Financial Reporting Council's website

Worked examples

Example 1 — a first encounter with Review of the role and effectiveness of non-executive directors

Start with the simplest possible case. Write down what Review of the role and effectiveness of non-executive directors claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Review of the role and effectiveness of non-executive directors before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Review of the role and effectiveness of non-executive directors ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Review of the role and effectiveness of non-executive directors

In research: Review of the role and effectiveness of non-executive directors appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Review of the role and effectiveness of non-executive directors in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Review of the role and effectiveness of non-executive directors is common in secondary-school and first-year university syllabi. It links to neighbouring topics 2003 documents, 2003 in the United Kingdom, Corporate governance in the United Kingdom, so understanding it makes those chapters shorter.
In everyday life: Look for Review of the role and effectiveness of non-executive directors outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Review of the role and effectiveness of non-executive directors in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Review of the role and effectiveness of non-executive directors means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
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Frequently asked questions

What is Review of the role and effectiveness of non-executive directors in simple terms?

Why does Review of the role and effectiveness of non-executive directors matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Review of the role and effectiveness of non-executive directors?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Review of the role and effectiveness of non-executive directors.