Less than half of non-executive directors (NEDs) are protected by personal indemnity insurance. Yet NEDs could soon take on further responsibilities and be held accountable for their work under revised corporate governance rules, putting businesses and individuals at risk, warns accountants and business advisors PKF.
Only 43% of NEDs had personal indemnity insurance, according to The Non-Executive Director Survey 2003, a study of 1,000 NEDs by PKF in association with the Quoted Companies Alliance, Top Pay Research Group and Longbridge International.
However, smaller quoted companies are most likely to be at risk. Last year's survey found that 98% of respondents had personal indemnity insurance, but this year the figure dropped dramatically following the inclusion of significantly more smaller-companies in a larger sample. NEDs in smaller companies were also found to have more directorships than those in larger companies, further increasing the need for insurance...
