The ABI and NAPF joint guidance on directors' contracts and severance pay has been revised. The revised guidance contains eight principles and it is interesting to note here what is said with regard to notice periods:
"The Combined Code states that under normal circumstances directors should be retained on contracts of one year or less. However we believe that a one year notice period should not be seen as a floor, and we strongly encourage boards to consider contracts with shorter notice periods. Compensation for risks run by executive directors is already implicit in the absolute level of remuneration, which mitigates the need for substantial contractual protection"..
The guidance is available here.
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