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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Non-executetive director
Hi Sir!
The chairman who is appointed should ideally be an independent non- executive director (NEDs). Is it right?
The remunderation of directors is determined by NEDs. Who will determine the remuneration of NEDs?
Thanks for help! 🙂
The chairman does not have to be a NED and can be a full time executive director (but can’t be the CEO).
The remuneration of directors is determined by the Remuneration Committee which is composed of NEDs ( but not necessarily all of them).
The governance code states:
“The board itself or, where required by the Articles of Association, the shareholders should determine the remuneration of the non-executive directors within the limits set in the Articles of Association.”
Where permitted by the Articles, the board may however delegate this responsibility to a committee,which might include the chief executive.
The remuneration committee (NEDs) should not determine NED remuneration.