Independent director

Independent directors improving corporate governance

Why have an independent director?

Almost all Organisation for Economic Co-operation and Development (OECD) jurisdiction require the presence of independent directors at the level of the Board of Directors for:

  • Investments
  • ManCos
  • Unregulated commercial companies
  • Asset management

Independent director duties:

  • Comply with laws and regulations
  • Duty of care for management – business judgment rule
  • Act at all-time in the corporate interest of the company
  • The interest of the company as a whole – not the sole interest of one or several shareholders
  • Violation of duties = potential directors liability

What is independence?

Independent can be defined as:

  • Absence of conflict of interest
  • Having the courage, conviction and strength to effectively assess and challenge the proposed decisions of other members of the management body
  • Being able to ask questions to the members of the management body in its management function
  • Being able to ask questions to resist « group-think »

It is required for each member of the board regardless of whether or not the member is considered as « being independent »

The role of independent directors

In practice independent director should be:

  • A source of inspiration
  • A substance over a form of approach
  • An assessment to be carried out by the board itself

Undertaking to :

  • Maintain in all circumstances independence of analysis, decision, and action
  • Not to seek or accept any unreasonable advantages that could be considered as compromising the independence
  • Clearly express opposition when of the opinion that a decision of the board could harm the company and draw all appropriate consequences in case of serious reservations against a decision
  • Allow for hybridizing competences

Objective and unbiased outspoken outsider:

  • Ensure a robust open debate and sound decision making
  • Ensure a robust open debate and sound decision making
  • Allow for hybridizing competences

What else?

  • Participation on board committee for matters sensitive to conflicts of interest (audit/remuneration/nomination committee)
  • Mission in committees limited to preparing recommendations and advice (Ultimate responsibility remains with the board)
  • Any independent director is first and foremost a director, who is a part of a collegial body
  • No personal and individual power within the company

Ready to start? 

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Why Esperia to embody your directorship?

  • To be compliant with the regulations
  • To have multilingual experts by your side
  • To have your unique tailor-made service

Don’t hesitate to contact us on for any demand concerning directorship services.

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