Long Serving Members of the Governing Body
People build companies. People intend for companies to last a long time. Hence, people expect to stay with companies for a long time. What about members of the governing board?
The Comair board has received some attention in the news, lately:
The Comair AGM (29th of October 2019) resolved to amend the Memorandum of Incorporation to follow the recommendation of the King IV report, which reads as follows:
“A non-executive member of the governing body may continue to serve, in an independent capacity, for longer than nine years if, upon an assessment by the governing body conducted every year after nine years, it is concluded that the member exercises objective judgement and there is no interest, position, association or relationship which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision-making.”
The IoDSA published a “General Guidance Note on Board Composition” and discussed many of the issues that Comair is improving.
The Comair “Integrated Annual report 2019” follows many King IV recommendations. One missing disclosure, as recommended by King IV, is the member’s period of service on the governing body. (The aim is not to critique the Annual Report in its totality. Hence I don’t know all the deviations from King IV — nor should we expect 100 % compliance with the letter of King IV.)
The shareholders at the AGM elect board members. The annual report includes resolutions to re-elect several members.
Comair has taken the planned action to govern well. The shareholders have held the board accountable as is reasonable and proper.