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Corporate Governance – Top Ten Tips for Nomads

08/07/2015

At a glance

In May 2015, Memery Crystal held a successful Corporate Governance Conference for Nomads.

During the evening, it became clear that there are a number of areas of concern in the Nomad community in relation to their corporate governance supervisory obligations and the ability to fully discharge these. Nomads recognised the need to make changes in both documentation and practices to keep up with  the changing landscape.

With this in mind, we have put together the Top Ten Tips for all Nomads to consider on how best to approach and implement good Corporate Governance.

1. In assessing a company’s corporate governance Nomads must be proactive and not reactive.

2. It is not a case of one size fits all. A Nomad should consider, with the directors of a company, the adoption of appropriate corporate governance measures depending on the size, business sector, jurisdiction and stage of development of the company.

3. Policies should be reviewed by the Nomad in conjunction with the company at least annually. This review should take into account not just changes in guidance and the company size and business but also broader trends and issues in the investor community.

4. Nomads should be more than regulators, offering wider advice on the interaction between good corporate governance and a company’s business. Nomads should play a role that is more than just a tick-box exercise.

5. Good corporate governance is not simply the adoption of specific policies but the total sum of many smaller elements that all add up to the effective governance of a company.

6. AIM does not have strict guidelines or prescriptive regulation. The corporate governance checks and balances are not engrained in the rules but are the responsibility of the Nomads and Company by reference to a wider set of guidelines.

7. Regular dialogue is essential and Nomads should ensure that a company maintains good communication between the entire board and its shareholders as well as with the Nomad.

8. Nomads should insist that they are not kept at arm’s length from the company. Closer ties should be formed in order to better implement the ‘spirit’ of the guidance.

9. With increasing transparency and with more and more sophisticated investors, Nomads can be the victims of adverse publicity in respect to corporate governance issues as well as the company. Nomads are often publically scrutinised and criticised if/when a company “breaches” guidelines.

10. Nomads are ultimately responsible with the Board of their client companies for ensuring the implementation of good corporate governance.

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Nick Davis

Nick Davis Senior Partner, Corporate Partner

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