Independence of directors

•  The first aspect of independence addresses a state of mind of a Director.

• All directors (Executive, Non-Executive and Independent Non-Executive) must be in a position to take independent decisions when dealing with affairs of the company

• One writer says a director must be willing to walk away from the company (in cases in which powerful and influential people are giving instructions that are contrary to good corporate governance.

• A close relationship with company management might create doubts about a director’s independence

• The claims by some former SOE directors that meetings were taking place outside of the confines on the approved structures in which important decisions about those SOEs were taken is a direct violation of the need to be independent

• The board appearance fees are also cited as a reason which makes people ignore the independence requirement

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