Companies should use the new economic substance legislation as a springboard to review corporate governance policies and procedures to determine if boards are effective, according to the Bermuda branch of the Institute of Directors.

It has compiled its own manifesto of directorial good practice after its annual conference.

Sara Schroter Ross, chairwoman of the inaugural IoD Bermuda Corporate Governance Conference, “A New Era of Board Excellence”, said: “The manifesto speaks about what it really means to be a high-functioning board. This means that complying with regulation is not the finish line but the starting line, as effective director service requires so much more.

“In Bermuda, this will be particularly relevant to those companies with significant local presence such as BSX-listed companies, regulated entities and the larger local and exempt companies.

“However, organisations of all sizes can incorporate points from the manifesto and, the recent Economic Substance Act, presents a great opportunity for the executive and the board to review corporate governance policies and procedures and to set the conditions for their board to be truly effective.”

The document is called A New Era of Board Excellence Manifesto, and captures key messages delivered by conference panellists who highlighted attributes and skills that directors and 21st-century business leaders should possess and be developing in order to advance their companies and teams in environments that are fast moving and evolving.

It recommends that directors should be people who have learnt from, but are not constrained by the past; who understand that good governance and diversity are directly tied to business performance and sustainability; who take personal and collective accountability for their decisions and indecisions; and who are actively planning for their own succession by identifying highly qualified and skilled men and women candidates of all ages from diverse racial, gender, geographical and experiential backgrounds, but most importantly harnessing diverse intellectual capacity.

In addition, the manifesto suggests that the best directors are innovative and adaptive; maintaining shareholder value whilst giving consideration to the needs and opinions of all key stakeholders; utilise self-evaluation, 360 feedback and external validation tools to make changes and improvements to board composition and who do not wait for a future crisis or new regulations “but who are futureproofing against threats and, identifying opportunities, to ensure the competitive relevance of their company”.

Rochelle Simons, IoD Bermuda branch chairwoman said: “The conference exposed a cross-section of corporate Bermuda professionals to subjects that were not necessarily top of mind in some director circles.

“Certainly, good corporate governance is a key phrase that all directors use, and understanding the implications of risk and financial management, and even the implications of technology are all subjects that most company directors address during board meetings.

“However, the feedback that we received from delegates indicated that the subjects identified for the conference agenda and the depth of panellists knowledge highlighted potential gaps in board focuses and the need for directors to stay abreast of evolving board room accountability.

“We want the branch manifesto to be a reminder to directors that their responsibilities and accountabilities are under increased scrutiny, therefore, all participants must be aware and prepared for the role.”

A total of 110 people attended the conference, from Bermuda and overseas and from the profit and non-profit sectors. There were 26 speakers, 14 based in Bermuda and 12 from the US, UK, Trinidad and Australia. The event was sponsored by the Bermuda Business Development Agency, Meritus Trust Company Limited, Washington Properties, Estera, Walkers and Freisenbruch-Meyer Insurance Services Ltd.

• For information about the Bermuda branch of the IoD, contact Rochelle Simons at chair.bermuda@iod.net or 336 2447