The Governance Library curated by Matthew Doyle
Board Room · Executive Sessions
Case study · NatWest Group
00:00
Board Room · Practice · Meeting Architecture
Executive Sessions — When & Why
When the board meets without management.
Case · NatWest Group · 25 July 2023
Between 19:00 and 01:34
At some point that afternoon, the independent directors had to decide whether to meet without their chief executive in the room.
19:00 → 01:34
Three different meetings, three different rooms
Terminology first — three overlapping concepts.
I
Closed session
Board without observers. No advisers. No non-executives outside the board.
II
Executive session
Non-executive directors without executive directors.
III
Private session
Independent NEDs only. Excludes the chair if not independent.
UK Code · comply-or-explain
The Code's treatment — one sentence each.
Provision 13
The chair should hold meetings with the NEDs without the executive directors present.
Provision 12
The SID should meet the other NEDs without the chair present — at least annually.
Comparison
US NYSE 303A.03: must. UK: should. King IV: principle.
The UK leaves when and how often to the chair's judgement.
Bovens 2007 · the deeper distinction
Two kinds of accountability.
Deliberative
Bovens · 2007 · European Law Journal
How a decision was arrived at.
What was considered, what was challenged, what alternatives were tabled. This is what executive sessions protect.
vs
Decisional
The resolved position
What was decided, by whom.
The board's formal resolution. Minuted. Disclosed. Reported to shareholders.
The NatWest window
What changed in the room between 19:00 and 01:34.
The reconstructed timeline from Treasury Select Committee and Travers Smith.
Four circumstances · when the session earns its place
Four times the board must meet without management.
I
CEO performance
Any genuine appraisal requires time without the CEO in the room.
II
Succession
The incumbent cannot be present for the succession conversation.
III
Contested judgement
When the board's view diverges from the CEO's. (The NatWest archetype.)
IV
Regulatory / legal
Privileged advice; FCA or PRA matters concerning the executive.
Cadence · short and regular, plus ad hoc
FTSE pattern: 10–15 minutes every formal board meeting, plus ad hoc for crises. Too rare — a red flag. Too often — a parallel board.
Executive sessions connect to every other Note.
Executive sessions
Note 01
The chair calls it. Frames it. Minutes it.
Note 02
Committee ToR imply them.
Note 04
Must be scheduled in the agenda.
Note 05
Crucible of chair-CEO.
Note 06
Succession lives here.
Note 07
Jurisdictional variance.
Three honest qualifications
Where the executive session starts to fray.
I
Minute-taking problem
Deliberative vs decisional: different records needed. UK has no settled convention; chairs call it.
II
Exclusion risk
Systematic exclusion of executive directors drifts toward a two-tier board (Tricker).
III
Cultural transposition
German two-tier · Japanese consensus norms · legal information-sharing limits. (Note 07 returns.)
Three things to carry forward.
A reading
FRC 2024 Code, Provisions 12 & 13. Paired with Bovens 2007 European Law Journal — on the typology of accountability mechanisms.
A question
Between 19:00 and 01:34 on 25 July 2023 — could your own board reconstruct the reasoning behind the decision it took?
The wider library
Note 01 Chair convenes · Note 02 Committees depend · Note 04 Agenda protects time · Note 05 Board-CEO shapes the session · Note 07 Jurisdictions render it differently. Outside the Board Room — Ethics Room Note 05, the company secretary as gatekeeper of the minute book.
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