A FTSE100 Company Secretary writes...
What process do companies follow in approving and monitoring external appointments for all employees?
We currently have an approval system in place requiring all employees to seek approval before accepting an external appointment. The definition of external appointment is not restricted to board positions.
We would like to know what process other companies follow.
We do not have a formal process for approving and monitoring external appointments for all employees. We require that employees avoid conflicts and this is explained in our employee handbook. There are more formal processes and requirements for senior levels.
Our process is largely for very senior executives (exec directors and exec committee members) and each is only permitted (and encouraged to have) one such appointment. As such, the execs are highly selective (they want a listed company in the FTSE 250 or above) and tend to discuss their options with the CEO who will vet the companies, early on, from a conflict of interest perspective.
What we are increasingly finding is that younger execs, at recruitment, disclose several appointments to start-up boards of friends where they provide informal advice. We don’t permit anyone to have two employments so discuss each case on its specific merits and are minded to permit these “informal” relationships where they do not encroach on their commitment to our company.
Please see the document that the link below leads to:
https://www.axa.com/en/newsroom/publications/compliance-ethics-guide
Section 2.2 of the guide may help.
We don’t have any formal process applicable to all employees. The requirements as regards external appointments are there in the employee’s employment contract (or the relevant employee manual) and the onus is on the employee to notify any appointments, and seek permission if it is required