When is a board director independent? This question is on the minds of many in the corporate governance arena.
The world’s two biggest and most powerful proxy firms, ISS and CGI Glass Lewis, are weighing in for no votes on directors they feel are not independent.
Here are a few thoughts as to when a director may be deemed as not independent from the Australian Securities Exchange. They include if a director is or has been:
- Employed in an executive capacity in the company, or a related company, within three years of joining the board
- A consultant or advisor, or has a commercial relationship with the company, or a related company, within three years of joining the board
- A substantial shareholder
- A person with close personal ties with any of the above
- A director of the company for more than nine years
Opinions vary on this topic. The larger question is if competitive advantage is improved with thoughtful off- and on-boarding. What are your thoughts and experiences?