Director residency rule reform?

Is it time to reform director residency rules? If so, in which way? Should they be applied more or abolished? They are wildly inconsistent at present. For example, Ireland requires two local directors, Cayman and Luxembourg none. That does not make sense.

The travel restrictions brought in as a result of the coronavirus crisis is either going to show the fund governance world that you must have local, resident directors or that they are unnecessary. It has to be one or the other: it cannot be both. Which is it likely to be?

The argument in favour of local resident directors was made by Iain Cullen, a partner at Simmons & Simmons, during The NED’s recent e-event. He said that he thinks residency rules are good because it is a good idea to have a local director that is subject to the regulator’s reach. Speaking at the same event Chris Addy, CEO of Castle Hall, suggested that it is helpful to have a local director on the board who knows the jurisdiction.

To read more on this story see the May issue of The NED.

shadow