Did corporate governance permit non-executive directors to engage in share options schemes?

In the context of corporate governance, non-executive directors typically have a different role and compensation structure compared to executive directors. Corporate governance principles emphasize accountability, transparency, and the safeguarding of shareholders' interests.

Engagement in share option schemes by non-executive directors can create potential conflicts of interest. Since non-executive directors are intended to provide independent oversight and strategic guidance without being involved in the daily management of the company, participating in share option schemes could compromise their objectivity. This raises concerns about their ability to make impartial decisions that are in the best interests of the shareholders.

Moreover, many corporate governance codes recommend that non-executive directors receive fixed fees rather than performance-based incentives linked to share prices, further ensuring their independence and aligning their motives with the long-term interests of the company rather than short-term gains.

This framework is designed to reinforce the existing ethical standards and responsibilities of non-executive directors, making it generally accepted that corporate governance does not support their involvement in share option schemes.