UK - The NAPF is calling for non-executive directors' pay to include shares to bring their interests closer to those of pension funds.
The recommendation comes in the NAPF's new guide to independent non-executives which will be unveiled at its annual conference in Brighton today.
Trade and industry secretary Patricia Hewitt has already described the guide as a “valuable contribution to the existing guidance in this field”.
The guide also recommends that any non-executives who hold a full-time directorship elsewhere should hand over the salary from their non-executive post to their full-time employer.
The NAPF says individuals should be limited to one non-executive post if they are already an executive elsewhere, while others should only hold a maximum of five non-executive positions.
In order to achieve a balance on company boards, the NAPF believes that a third of board members should be non-executives, of which at least three should be independent. This would enable non-executives to challenge and influence board decision-making.
The NAPF investment council hinted that the guide may be updated next year as it was prepared to “revisit” the document 12 months from now.
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