ILA Governance Desk
answers your questions
ILA members can now receive market-based, practical, no added cost, friendly advice
from some of the most knowledgeable professionals in Luxembourg. When faced
with a tricky corporate governance-related question or concern, members can
contact the new ILA Governance Desk, which features five people with several decades
of practical experience between them.
Advice on best practice
The five members of the Desk discussed their methods and some case studies at the official launch event of the Governance Desk, held on 26th March at Quintet Private Bank’s HQ in Luxembourg City. The panel features three of the most well-known non-executives in the country: Carine Feipel, John Li and Gary Pieters, with legal advice provided by Aisling Murphy of Allen & Overy, and a view from current senior management given by Enrico Turchi, the MD at Amundi Luxembourg.
The Desk does not seek to provide legal, accounting, tax, regulatory, and other advice, but it offers an insight to best practice. Ms Murphy characterised it as “the equivalent of the ‘phone a friend’ option in the Who Wants To Be A Millionaire TV show.” It offers well-informed advice that seeks to help the ILA member, but the questioner has the ultimate decision on whether to go further and seek a formal professional opinion.
“When we give our opinions, we don't have the context nor a full set of facts, so we do not seek to offer the same level of advice you would receive when working in-depth with professional service providers,” Ms Murphy added. Sometimes the question posed goes fully beyond the Governance Desk’s remit, and the panel will politely decline to offer an opinion.
Quick, easy process
Asking a question is a simple process. The service is available to members who just need to log onto ila.lu/the-ila-governance-desk, complete some personal details, choose a question category, and then write their query in the box provided. Topics covered include questions about board governance, dispute issues, accounting and auditing, the process of discharging responsibility, relationships with regulators, conflicts of interest, shareholder questions, and any other issue within a director’s remit.
An answer will be forthcoming within at least 10 working days and often much more quickly. There might be consensus on the panel, or there might be clear or nuanced differences of opinion, all of which will be communicated to the questioner, and added to the ILA members-only access website’s FAQ section. Members should check there first to see if their question can be answered before writing to the Governance Desk.
Case studies
The panel then discussed how they approached some questions they have already received.
Is there a conflict of interest for a non-executive to be an investment fund shareholder? Whatever the philosophical nature of the question, the panel agreed that each company should have clear rules and procedures for managing these potential risks. A panellist spoke of a past employer’s strict no-equity policy, adding that he saw this as probably an over cautious stance for most organisations. It was noted that professional advice could be sought to check if a personal portfolio is potentially in conflict with regulations or company rules.
Should there be formal indexation procedures for director fees? The panel agreed that to preserve trust, fee structures should be fair, but there was a general preference for a more informal process, perhaps with clearly defined dates when fees should be reviewed. However, asked about the application of withholding tax to a contract between a fund and a firm providing directorship services, the panel did not offer an opinion. They suggested that professional advice should be sought.
Should directors agree to return all information to the organisation when they leave the board? The panel said this would make life difficult for the ex-director if the regulator had questions after the expiry of the mandate. One panellist said they had refused to accept a board position after the company insisted on such arrangements.
Should all directors (other than the chair) have the same remuneration? Some panellists felt that maintaining team cohesion was often a more important factor than the special expertise that comes with paying extra. Others noted that a 15-20% fee premium should not be sufficient to upset team spirit and were sometimes required to attract desired specialist profiles.