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Q. What is an independent director?

A. An independent director is a non-executive director free of any relationship with the corporation or its management that may impair the director's ability to make independent judgment.

These include family, employment, business and personal relationships.
The independent director should not have been employed by the company or group in an executive capacity for the preceding three years, nor be a family member of anyone so employed.

He or she will not be a significant supplier to the company or group nor a professional advisor other than as an independent director and will have no other significant contractual relationship with the company or group.

The independent director will not represent any shareholder who has the ability to control or influence management significantly.

• Mission
• Role
• Duties
• Responsibilities

Specific items:

• The fiduciary responsibilities of directors
• Leadership of the Board
• Induction of new directors
• Director evaluation
• Directors' right of access to company records
• Relationship of the Board with employees
• Relationship of the Board with advisors
• Board and Board Committee meetings
• Board procedures and protocols

Director Evaluation:

• Collective evaluation of directors
• Individual evaluation of directors
• Evaluation of CEO and senior executives

New Director Appointment:

• Subject to shareholder approval and with recommendations from appropriate committees such as Nominations, Remuneration and Human Resources Committees. The above is a very basic outline of a Board charter. There is no universal charter which can be used. Different boards have different requirements of their governance systems.

For more information, see the Corporate Governance section of this website.

A.
Discipline
Corporate discipline is a commitment by a company's senior management to adhere to behaviour that is universally recognised and accepted to be correct and proper.

Transparency
Transparency is concerned with the ease and speed with which an outsider is able to make meaningful analysis of a company's actions, its economic fundamentals and the non-financial aspects pertinent to that business.

Independence
Independence is the extent to which mechanisms have been put in place to minimise or avoid conflicts of interest. These mechanisms range from the composition of the board to external parties such as the auditors.

Accountability
Individuals or groups in a company, who make decisions and take actions on specific issues, are required to be accountable for their decisions and actions.

Responsibility
Responsibility pertains to behaviour that allows for corrective action and for penalising mismanagement. While the board is accountable to the company, it must act responsively to and with responsibility towards all stakeholders of the company.

Social responsibility
A well-managed company will be aware of, and respond to, social issues, placing a high priority on ethical standards. A good corporate citizen is increasingly seen as one that is non-discriminatory, non-exploitative, and responsible with regard to environmental and human rights issues.

Fairness
The systems that exist within the company must be balanced in taking into account all those that have an interest in the company and its future. The rights of various groups have to be acknowledged and respected. We expect to be treated with respect and we should grant others the same privilege.