Corporate Governance is how well the board are looking after the
business. There are a number of rules on how this should be carried out. In
2004 the annual report showed eight areas of concern these are shown
here. The 2005 report has some points of
interest too, these are shown below. When the full 2006 report is released
any comments made will be reported here
The board of NUFC views its role as
being to "provide entrepreneurial leadership of the Group within a framework
of prudent and effective controls, which enable risk to be assessed and
managed. It set's the Group's strategic aims, ensures that the necessary
financial and human resources are in place for the Group to meet its
objectives, and reviews management performance."
The areas the NUFC board are out of line with the approved code of
practice are
- the role of the Chairman and Chief Executive are held by one person.
- the club do not have the recommended minimum number of of two
independent directors
- the remuneration and audit committees
These match up with some of the items listed a year ago. The board
acknowledges these issue may cause some concern, but "remain confident
that they .... provide and adequate an effective system of leadership
and control".
They also acknowledge that there is no formal annual evaluation of
the performance of the board, or of the individual directors.
Wonderfully they
consider 'that it is easier to recognise effective performance than to
measure it".
In the year ended July 31st 2005 there were 8 (eight) full board
meetings that all the directors attended. Apart from Douglas Hall who
managed to get to 6 of them. Salaries for the directors are shown
here.
In the accounts published in July 2004
the club commented on how it was doing against the standards. There were 8
issues raised where NUFC were non-compliant, amongst these were
The areas where the club are not in line are
- There is only one person on the board of
directors who can be viewed as independent. The board is made up
of Freddy Shepherd, his brother Bruce, Douglas Hall and his sister
Alison. The single independent voice is Timothy Revill an accountant
based in Gibraltar.
- Freddy Shepherd is both Chairman and
Executive Director, which means he is responsible for who is on the
board, and for the day to day decision making. The Best Practice is that
these two roles are not held by the same person. This is to ensure that
someone is checking on the standard of work being done by the person
running the business. The way it is with Freddy Shepherd is that no one
can question how well he is doing.
- The club does not have someone who can
suggest appointments to the board, a "Nominations Committee". This means that Shepherd can
appoint who ever he wants into any position without any checking that
they are the right person for the job.
- The Remuneration committee who decide
how much to pay board members is made up of only two people Bruce
Shepherd and Tim Revill. As Bruce Shepherd is Freddy's brother he is not
viewed as being independent. Tim Revill an accountant based in Gibraltar
is viewed as independent.
- The money paid to Freddy Shepherd and
Douglas Hall is not dependent on how well the club performs, nor on any
individual targets that should be set for them in. The Code says pay
should be performance related.
- Freddy Shepherd and Douglas Hall are on
two years notice. So if NUFC wished to sack them they would have to pay
two years salary to them. Freddy Shepherd was paid £500,000 in 2004,
Douglas Hall £450,000 per year, so it would cost £1m and £900,000
respectively to sack each of them. The standard is for directors to have
contracts of no more than 12 months.
- The club have an Audit Committee which
reviews how well the business looks after its accounts and financial
policy. As with the Remuneration Committee this committee is made up of
Bruce Shepherd and Tim Revill. Only Mr Revill an accountant based in
Gibraltar is viewed as independent.
