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60 N. Ir. Legal Q. 51 (2009)
Non-Executive Directors and Corporate Governance

handle is hein.journals/nilq60 and id is 53 raw text is: NILQ 60(1): 51-62 Non-executive directors and corporate governance SALLY WHEELER Queen's University Belfast he focus of this contribution is on corporate governance and corporate boards in the public, for profit, sector, in particular the role of non-executive or outsider directors, and the ideas of accountability under which it is presumed they operate. However, the message of the paper is wider than this. Given the nature of corporate power in the global context, ensuring accurate and trustworthy corporate governance is a broader issue than simply one that concerns individual shareholders or nation-state-level economic policy.1 The world's largest corporations have turnovers in excess of the GDP of many individual states and have a transworld presence in the sense that their market listing is not confined to one nationally based exchange. At the domestic level, there is an argument to be made that corporations are not any longer private actors. They are public actors in terms of power and influence in areas such as environmental impact, location and relocation decisions, and corporate social responsibility The most popular and pervasive model of corporate regulation sees the shareholders of the corporation as those most in need of the protection of good governance. This model naturally emphasises the private nature of the corporation and its governance structure. Its dominance means that it makes sense to accept this model for the purposes of this paper, although it is possible to find vigorous condemnation of it among UK and US commentators2 for its concentration on financial performance, short-term profits and its neglect of wider interests. Taking just two points of qualification should make it clear that governance failure has consequences wider than the official model would lead us to believe. The first is that the rise of defined contribution pension plans in the UK and the US makes many employees interested parties in corporate governance through the medium of institutional investment. They are literally arms-length investors, for their financial wellbeing post-retirement depends on favourable market returns on their personal retirement investment plan. The second is that a key function of boards of directors is the monitoring of the strategic direction of the corporation's business model and its risk management contingency. Should these functions and the monitoring of them not be exercised properh; it is likely that the pool of those looking for accountability will be wider than simply shareholders. Fannie Mae and Freddie Mac in a US context and Northern Rock in a UK I MI HuLc Rccwing management and governance: new paradigms of govcrnancc?' (2003) 7 J of .\ik. and Gov 211-21. 2 1. Mitchell, Progressive Corporate Lan (Boulder, Colorado: \Vcsrview Prc.s 1995).

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