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?
Tracy Houston
Tracy E. Houston, M.A., is the president of Board Resources Services, LLC. She is a refined specialist in board consulting and executive coaching with a heartfelt passion for rethinking performance, teams and the boardroom. Her company, Board Resource Services, LLC, is online at www.eboardmember.com and www.eboardguru.com. You can follow Tracy on Twitter @BoardGuru. Headquartered in the Denver, Colorado area, Tracy is an avid hiker.
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