Cross-directorship
A cross-directorship involves reciprocal board connections, commonly where directors from two companies sit on each other’s boards. Such links can raise concerns about independence, mutual influence and conflicts when directors assess one another’s performance or remuneration. The significance depends on the actual relationships and the applicable governance framework. Merely holding more than one directorship is not the same as a reciprocal cross-directorship.
Worked example
The chief executive of A is a non-executive director of B, while B’s chief executive sits on A’s board. Each may be less willing to challenge the other’s remuneration, so the companies examine independence and conflict safeguards.
Common mistake
Do not label every person with multiple board appointments as a cross-director, or assume that a reciprocal relationship proves misconduct.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBL | Supporting | September 2026–June 2027 |