Anti-money laundering: equipping the NED

A non-executive director role is no longer the sinecure it once was: real duties are attended by personal legal liability. Sue Grossey considers the anti-money laundering demands on those who should be best placed to influence the CEO and the Board.

Susan Grossey may be contacted on +44 (0)1223 563636, susan@thinkingaboutcrime.com, www.thinkingaboutcrime.com

Once upon a time, being a non-executive director was a cushy number: turn up a couple of times a year for a generous lunch, well-lubricated and followed by a nice cigar, show your hand at the moments indicated by the chairman, and toddle off home with a nice fee and a warm feeling that all is rather fine with the world. Then came Enron, WorldCom and – finally – the Higgs Review. An independent assessment of the role and effectiveness of non-executive directors (NEDs), the Higgs Review was unimpressed with what it saw, and produced numerous recommendations, most of which found their way into first the Combined Code of Corporate Governance, in 2003, and now its successor, the UK Corporate Governance Code. In short, no distinction is drawn between directors and their non-executive colleagues, and all are held responsible for “ensuring the company’s prosperity by collectively directing the company’s affairs, while meeting the appropriate interests of its shareholders and relevant stakeholders”. [1] And one of the major elements of ensuring prosperity is managing risk – including the risk of money laundering and terrorist financing. So it is a foolish NED who does not want the latest anti-money laundering/ counter financing of terrorism (AML/CFT) information to assist him in making decisions about the appropriateness and proportionality of his company’s regime, as he will be held legally responsible for signing off on that regime, and it will be assumed (by professional bodies, regulators and courts) that his decisions were informed rather than random.