‘Channel Islands lack qualified directors’
Channel Islands domiciled captives lack people qualified to be independent non-executive directors who are also willing to live in the domiciles, industry figures have said.
Guernsey and Isle of Man regulators allow a certain amount of captive non-executive directors to live locally. The same people may sit on several boards which can be problematic, said Jonathan Bates, managing director of Institutional Design.
In addition, increasing pressure through corporate governance legislation, like Ireland’s corporate governance code, and an onslaught of new legislation such as Solvency II, is raising the bar for directors on captive boards.
“Many independent non-executive directors rarely know what’s going on in the multinational group. These guys rely on information passed down to them by the shareholders,” said Bates.
“Directors are subject to increasing amounts of transparency in their role which heightens pressure on them to make the right decisions.”
Alan Fleming, captive chair of the Association of Insurance and Risk Managers in Industry and Commerce (AIRMIC), sits on two captive boards.
“One of the biggest problems for board members is checking captive managers are satisfying all of the requirements and ensuring the captive is working with the right people.
“Board members are more involved with the captive manager than the risk manager or parent company,” said Fleming.