Best Practice and recent guidelines issued by the Financial Stability Forum have not only focused on Incentive Instruments and the position of Management, but also on the processes leading to their formulation and control. Boards of Directors have been asked, among others, to provide a better presidium.
Active Value Advisors believes that the new regulations and trends can be an opportunity to rethink some of the aspects related to the role actually played by Directors, thus allowing greater latitude as far as issues involving possible conflict of interests with management.
The Structure Board of Directors Practice, in particular, provides independent specialized consulting service as far Capital Allocation, Target Setting, Redefining optimal mix of Financial Resources and Incentive Mechanisms.
These services are intended to respond to a series of different questions, including:
- Is the Industrial Plan set by management consistent with share- implied expectations ?
- Which Capital Allocation maximizes Enterprise value most?
- How can I define Development Objectives regardless of the Budget/Plan set by management?
- How can I tailor the Bonus for the management according to the level of challenge implied in the Goals?
- Which dividend policy is consistent with the purpose of optimizing financial risk and maximizing enterprise value?
