Reserved Powers of the Board
As part of an annual review I have just participated in setting out again the reserved powers of the Board of Directors of a Fund Company I participate on.
It is I feel an invaluable document and sets annually how the Board interacts in performing its duties of oversight. It needs to be simple and transparent and set out so all participants under stand their role either individually or collectively.
Its sets out the basis the Board operates on including frequency of meeting, it main purposes. These include Statutory Obligations, Strategic and Financial Matters, Personell Matters, reporting and Control Responsibilities and other matters.
Through a further agreed document it sets out Delegated Authority from the Board to the Manager and Advisor on day to day operational aspects of the underlying Funds.
This has become all the more relevant as various authorities have set out their own guidance on what they wish to see practised as far as Corporate Governance and Substance by the Board. Interestingly the Central Bank of Ireland this year is moving on from the instigation of CP86 for Directors to evaluating and interviewing those involved in the role. The CSSF in Luxembourg is following suit commencing its one year implementation in August 2018.
Independently the FCA is introducing Independent Non Executive Directors to the domestic fund managers of domestic Fund structures from later on this year.Setting out the Reserved Powers of the Board is a great way to introduce Best Practice.