duties and to the attitudes and activities of their boards.

"Strong corporate governance means more profits,'' Dana Kopper, senior vice president of Marsh & McLennan's consultancy service BoardWorks, told an audience of around 180 people at the Hamilton Princess on Thursday evening.

Mr. Kopper, who is based in Los Angeles, was speaking at a seminar organised jointly by Marsh & McLennan and law firm Conyers, Dill & Pearman. John Collis, partner at CD&P, was the other speaker.

The seminar, entitled The Changing Boardroom - New Trends and Challenges, dealt with the various legislative and perception changes internationally that affect the role of a director.

Mr. Collis explained: "The pressure to change has not come about from changes to legislation, but from changes in standards and expectations. The courts and the public at large now view matters very differently. This topic is not going to go away and we expect there will be increased legislation.'' As the first speaker Mr. Collis stressed that directors' duty must always be to determine that what they do is in the best interest of the company and not the shareholders, and they must avoid conflicts of interest.

However he explained that directors' may have a duty to shareholders where it does not conflict with their duty to the company and added: "I see that is a trend that will continue and could develop.'' He said that what constitutes a conflict of interest in most cases involves money, "any financial conflict or free access, free holidays, etc.'' In short, anything that might pitch the director's own interests against that of the company, such as an opportunity presented to a director that might interest the company or the use of company confidential information.

"There is a notion that large dollar figures may distort a director's judgment and this can taint the perception of the courts and others.

Management Directors required to be more attentive now Reacting to a conflict of interest by disclosure doesn't necessarily cure the conflict -- the director still has to ensure the decision is in the best interest of the company.'' Directors will have to develop an increasing level of expertise in the business of the company and can no longer say they didn't understand the decisions they made on behalf of the company. On a day to day basis they can appoint advisors and rely on them for advice, providing they have ensured the advisor is competent and has the relevant knowledge, qualifications and experience. But they can only rely on advisers for advice, and they must understand the advice. The decision they make based on advice is their own responsibility.

Mr. Kopper reiterated this and said: "The board today is no longer made up of the golfing buddies of the CEO -- it is independent. The level of liability for a board has increased and, in the US, the average life expectancy of a CEO is about 18 months.'' He said today's boards are more actively involved in managing the company and they should give consideration to a charter of their expectations. Nominating, recruiting and evaluating board members are critical and all need balance.

He said there had been a 70 percent increase in a two year period in the use of formal board evaluation. Some areas a board should assess its performance in include mission, strategic planning, leadership, composition and structure, information and reports and committee effectiveness.

"On the selling side good governance really does matter for a company. For example if a purchaser is looking at three companies that are similar in terms of profit, governance is the filter they will use.'' Mr. Kopper also said that social agendas had been the domain of European corporate governance but were now gaining ground in the US and people interested in the company want to know there is a social component. Companies were finding ways, such as the Internet, to gain shareholder support for their policies and activities.

He said directors are coming under scrutiny from many bodies internationally, both formal and informal bodies, and are more likely to be involved in litigation than they were some years ago. This is leading to reforms which are already underway such as limiting the number of boards directors may serve on simultaneously, nominating compensation and audit committees composed of independent directors and more use of corporate governance committees.

Company first: John Collis