The implementation of the senior insurance managers’ regime (SIMR) in March 2016, in response to the financial crisis, might have caused angst amongst some directors. However, for well-run companies such as Asta, the regime simply brought together the reporting of activities that were already standard practice into one place and was in fact a helpful development.
SIMR’s aim is to make insurance company directors more accountable. Although, in my experience, board members have always taken their duties as directors very seriously.
Whilst there is no doubt that the additional rules did make some in the industry feel nervous, and even led some to decide that now might be the time to leave a board, or not to join one, the majority of directors already complied and the new regime merely provided clarification.
One of a company secretary’s more important roles is to ensure that any new director is properly briefed and supported with the appropriate tools to perform their duties and many of the best run insurance entities offer director training to help newly appointed board members comply. However, for any director to be truly effective, it is necessary to have an effectively managed board.
Efficiently run board meetings are key and achieving this can be as simple as keeping the pack of information to a manageable size and running the agenda to time. The latter point is of particular importance in an organisation like Asta, where each client is an independent entity in its own right and needs sufficient agenda time and consideration. In this instance, a strong chairman with the ability to manage the agenda and simply keep the meeting to schedule, whilst ensuring that all matters are given sufficient time for deliberation, is a vital component to success.
One of the results of SIMR and the greater focus on the roles of directors is that at board meetings, directors are keen to be seen to have made a contribution and have their input recorded in the minutes. This ensures that there is a strong culture of challenge and questioning.
In addition, I believe that asking the board to rate its effectiveness at the end of each meeting can be very helpful in ensuring that board meetings achieve their aims. This is a technique we have been using for a few months at Asta and it is proving useful in ensuring that each meeting delivers what is needed and that any required improvements are immediately implemented.
Culture is the key
However, director selection, training, board management and regular feedback can only take things so far. Rules are a useful guideline, although it is vital not to just pay them lip service but to ensure that the board is operating an open governance culture and setting an appropriate “tone from the top”.
For a business like Asta, we not only need to be certain that our own directors live up to our corporate governance culture, but that our managed clients do as well. In fact, Asta would not wish to work with a client that did not subscribe to this. It is not a coincidence therefore that our clients have a similar attitude to governance and culture as we have at Asta.
While a greater regulatory focus on board management can have an administrative downside and perhaps reduce the pool of people available, it does mean that more qualified and committed people are taking up director roles and that boards are working ever more effectively in the insurance sector.
Charmaine Chow is a qualified solicitor and chartered secretary. She joined Asta as Company Secretary in February 2012.
Charmaine previously practised as a solicitor and then as company secretary at both FTSE and AIM listed companies. As an alumni of the Lloyd’s leadership programme conducted at the London Business School in 2013, she remains an active member in the Lloyd’s community.