How does an independent director contribute to sustaining enterprise performance?
Because governance is about the balance of power, a company’s Supervisory or Management Board needs independence of viewpoint.
What is an independent director? An independent director is a Board member who (a) has no competing interest with the company (b) who makes a real contribution in terms of competency and freedom of judgment, to help the Board better exercise its responsibilities. The independent Director does not bow to outside pressure or influence, and has no conflict of interest, actual or potential. The Afep-Medef code of good practice specifies that the independent director is more than merely non-executive (i.e. has no direct management role), but has no special interests (i.e. is not a major shareholder, an employee or other direct stakeholder).
The independent director brings the company a different vision, sourced from a wealth of personal experience. Hence open-minded assessment of the real issues. Problems are seen in a new light.
The independent director guarantees the company’s true interests and those of all the stakeholders who contribute to value creation. An independent director brings fresh and more objective insight. The independent director stands back from the current thinking of the Board and Management Team.
Last but not least, the independent director’s role requires special competencies and experience. It is supported by behavioral knowhow. At stake here are a broad range of skills, fostered by TIDO knowledge and posture-based training.The independent director, as member of the Board or Strategy Committee, has a vital role to play. Rather than echo received opinion, the independent director defends the long term interests of all stakeholders, especially the shareholders.