eGuide to CG Code

Non-executive directors and/or independent directors, led by the independent Chairman or other independent director as appropriate, meet regularly without the presence of Management. The chairman of such meetings provides feedback to the Board and/or Chairman as appropriate.


A. Explanation

This Provision discusses the need for IDs and Non-Executive Directors (NEDs) to have private sessions.

NEDs are separate from management, though some management members are on the Board (as Executive Directors or EDs). Some matters are best discussed among NEDs without the presence of management and even the EDs. These include the performance and remuneration of management, dynamics of the Board-management relationship, and objective assessments of management’s ideas and proposals. Most of these matters will, in fact, be brought to the EDs’ attention in due course, usually in the full Board meeting. However, it could be more candid and productive for them to be discussed beforehand in private sessions without management’s presence.

While this Provision supports having these private NED sessions on a regular basis, it does not mean they should occur without the knowledge of the EDs. It is also preferable if they are held regularly as a matter of routine as that will help ameliorate any concerns on what the specific situations may be when they are scheduled on an ad hoc basis.

There are two types of NEDs – Independent Directors (IDs) and Non-Independent Non-Executive Directors (NI-NEDs). Where particular issues relate to independence or IDs, the private session should then involve only IDs.

The Provision indicates that private sessions of NEDs and/or IDs should be led by the Lead Independent Director (Lead ID), whose role is described in Provision 3.3 of the Code.


B. Practice Guidance


C. Related Rules and Regulations
  • Section 157(1) of the Companies Act: As to the Duty and Liability of Officers.


D. CG Guides
  • Board Guide 5.2: General Duties of Directors [Director Duties].
  • Board Guide 5.8: Types of Directors [Director Duties].
  • Board Guide 5.10: The Non-Executive Director [Director Duties].
  • Board Guide Appendix 1J: “Comply or Explain” – Examples of Non-Compliance: 2. Separation of the Chairman and CEO [Corporate Governance].
  • NC Guide 3.2: Types of Directors [Nomination and Appointment Process].
  • NC Guide Appendix 3C: Types of Directors [Nomination and Appointment Process].
  • NC Guide 4.6: The Lead Independent Director [Director Independence].
  • NC Guide Appendix 3C: Types of Directors [Nomination and Appointment Process].
  • NC Guide Appendix 4D: Sample Terms of Reference for Lead Independent Director [Director Independence].


E. Related Articles




eGuide to CG Code
Definition of Corporate Governance
History and Structure of the Code
Role of the Board
Role of the Chair
Focus on Long Term and Sustainability
Revised Code Structure and Approach
Mandatory Principles
Provisions and Variations
Thoughtful and Meaningful Application
Board Matters
Principle 1
Provision 1.1
Provision 1.2
Provision 1.3
Provision 1.4
Provision 1.5
Provision 1.6
Provision 1.7
Principle 2
Provision 2.1
Provision 2.2
Provision 2.3
Provision 2.4
Provision 2.5
Principle 3
Provision 3.1
Provision 3.2
Provision 3.3
Principle 4
Provision 4.1
Provision 4.2
Provision 4.3
Provision 4.4
Provision 4.5
Principle 5
Provision 5.1
Provision 5.2
Provision 5.3
Remuneration Matters
Principle 6
Provision 6.1
Provision 6.2
Provision 6.3
Provision 6.4
Principle 7
Provision 7.1
Provision 7.2
Provision 7.3
Principle 8
Provision 8.1
Provision 8.2
Provision 8.3
Accountability and Audit
Principle 9
Provision 9.1
Provision 9.2
Principle 10
Provision 10.1
Provision 10.2
Provision 10.3
Provision 10.4
Provision 10.5
Shareholder Rights and Responsibilities
Principle 11
Provision 11.1
Provision 11.2
Provision 11.3
Provision 11.4
Provision 11.5
Provision 11.6
Principle 12
Provision 12.1
Provision 12.2
Provision 12.3
Managing Stakeholder Relationships
Principle 13
Provision 13.1
Provision 13.2
Provision 13.3
Practice Guidance
Board Roles and Director Duties
Board Composition and Guidance
Chairman and CEO
Board Membership
Board Performance
Procedures for Developing Remuneration Policies
Level and Mix of Remuneration
Disclosure on Remuneration
Risk Management and Internal Controls
Audit Committee
Shareholder Rights and Engagement
Engagement with Shareholders
Managing Stakeholder Relationships
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