Independent profiles sought

Having a Board of Directors (BoD) is an obligation for certain structures and certain sizes of company. And there are many of them in Luxembourg. A good board of directors is a guarantee that the business is well managed, that wise people are watching over it and making good decisions in the interests of the company. "The law incorporates this notion of management 'in good stead' when you are a member of a board of directors. It's a bit vague, but it means that you have to have a good attitude, " explains Spyros Binias, a specialist and adviser on governance and boards of directors. This summer, he launched a petition, which failed to win the necessary votes, to "introduce the obligation to include an appropriate number of independent directors on the board of directors (as well as on board committees) of Luxembourg resident companies."

Although the subject didn't stir the crowds, the specialist believes that his initiative can be used to start a conversation on the subject of boards of directors: "When you can't vote as a foreigner, submitting a petition is a bit like taking back power. What interested me about this petition was having a framework in case of conflict of interest, for example, because you can be excluded from a vote at the discretion of the board. The law does not cover such cases."

The paradox of the sector is that you have to manage to find competent, motivated people with integrity to help in the good governance of a company where they are not employees. A step back is necessary, but what about unfortunate decisions that lead to irremediable losses for the company? If the risks are too great, no one will want to take on the responsibility of such a position. "There are discussions going on, but only on social networks at the moment. The liability of board members should be three times the amount of their allowances, and these rules should be put in place from the outset. There are a lot of rules to mitigate the risks, both for companies and for board members."