Terms of Appointment

Duration of appointment

Directors are appointed for terms of up to three years.

Directors may be reappointed for a second term of up to three years and, in response to a particular need, a director may be appointed for further periods. Second and third terms are not automatic, and Ministers will make their decisions based on the company’s business needs, the availability of candidates for the role (including the incumbent), the incumbent’s performance and the make-up of the board.

A director appointed to the position of chair in the course of his or her term may be appointed for a further period.

Unlike typical private sector companies where boards appoint their own chair, Ministers appoint the chair and deputy chair (where there is one) on Crown company boards.

Time commitment

Before applying for a position as a Crown company director, you should be sure that you have the time available to commit fully to such an important role.

Although specific requirements vary from board to board, a good rule of thumb is that you will require a minimum commitment of two to three days per month. One of those days will involve attendance at the board meeting, and there will generally be an additional component for sub-committee or subsidiary company attendance.

The chair’s commitment is generally estimated to be twice that of an ‘ordinary’ director.

Attendance at meetings is a critical part of the role and appointees are expected to make every effort to attend all meetings, or to make arrangements to contribute, if unable to attend a particular meeting.

Remuneration

CCMAU advises Ministers on appropriate remuneration. The amounts paid vary on the size and scale of the company concerned, and its associated risk profile.

The base rate used to calculate remuneration for directorships ranges from $18,000 to $49,000 per annum. The actual rate will depend on a number of factors including the size and complexity of the company and the diversity of its operations and markets.

Performance evaluation

Chairs, deputy chairs, and directors are reviewed annually. These reviews are primarily a tool to help boards analyse their performance, and identify and remedy any areas where performance could be improved.

Evaluations are also used to help Ministers in their deliberations regarding the appointment or replacement of directors (in particular maintaining an appropriate skills balance around the board table). The reviews help to give input into the chair’s succession planning and identification of director training needs.

Boards as a whole are also reviewed on an on-going basis through a set of performance measures.

Director development

CCMAU conducts sector-specific induction programmes for all new directors. Chairs then provide new directors with a formal induction into all aspects of a company. CCMAU also has a role in providing general governance training to aspiring directors and runs a range of training activities targeted to meet the needs of current boards.

Once appointed, all directors are responsible for ensuring that they remain up-to-date in their knowledge of the legal and professional duties of board members. On-going professional development is typically agreed between directors and chairs as part of the annual performance review cycle.