Can the Non-executive Director be an Effective Gatekeeper? The Possible Development of a Legal Framework of Accountability

In the UK there has been a recent debate over the role of the independent non-executive director, with that debate resulting in changes to a revised Code applicable to companies reporting after 1 November, 2003. This article reflects on an aspect of the proposed changes that was ignored, namely changes to the legal duties and liabilities of non-executive directors. This appears to have been a missed opportunity in seeking to enhance the effectiveness of independent non-executives and their contributions to enhancing corporate governance. This paper considers enhancing the governance role of non-executive directors by introducing "gatekeeper liability". Copyright Blackwell Publishing Ltd 2005.